Guide
VA Funding Fee 2026: Rates, Exemptions and How It Is Paid
VA loans skip monthly mortgage insurance. Most borrowers pay a one-time funding fee instead, and many are exempt.
What changed
- : First published.
On this page
What the funding fee is
The VA funding fee is a one-time charge on most VA-backed and VA direct home loans. The VA says the fee helps lower the cost of the loan for U.S. taxpayers, since the program doesn't require down payments or monthly mortgage insurance. It is figured as a percentage of the loan amount. You pay it at closing, either in cash or by adding it to the loan.
Current rates
These are the VA's published rates for Veterans, active-duty service members, and National Guard and Reserve members.
Purchase and construction loans
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Other VA loans
| Loan type | Fee |
|---|---|
| Cash-out refinance | 2.15% first use; 3.3% after first use |
| Interest Rate Reduction Refinance Loan (IRRRL) | 0.5% |
| Manufactured home loan (not permanently affixed) | 1% |
| Native American Direct Loan: purchase / refinance | 1.25% / 0.5% |
The VA notes that if you previously used the benefit only for a manufactured home, you still pay the first-use rate.
Example: $350,000 home
With no down payment on first use, the fee is 2.15% × $350,000 = $7,525. Financed at 6.5% over 30 years, the loan is $357,525 and principal and interest is $2,259.80. With 5% down ($17,500), the fee drops to 1.5% of $332,500 = $4,987.50. With 10% down, it is 1.25% of $315,000 = $3,937.50. On a later use with no down payment, it would be 3.3%, or $11,550.
Who is exempt
According to the VA, you don't pay the funding fee if any of these is true:
- You receive VA compensation for a service-connected disability.
- You are eligible for that compensation but receive retirement or active-duty pay instead.
- You receive Dependency and Indemnity Compensation (DIC) as the surviving spouse of a Veteran.
- You are a service member with a proposed or memorandum rating, before closing, saying you are eligible for compensation from a pre-discharge claim.
- You are on active duty and, on or before closing, show evidence that you received the Purple Heart.
Ask your lender to confirm your exemption status before closing. If you are later awarded compensation retroactive to before your closing date, you may be eligible for a refund.
VA versus mortgage insurance
The VA's purchase loan page lists "no need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP)" among the benefits. Compare that with the alternatives:
- A conventional loan with less than 20% down usually carries monthly PMI until the balance reaches 78% to 80% of the original value.
- An FHA loan has a 1.75% upfront premium and, with less than 10% down, an annual premium for the life of the loan.
So a 2.15% one-time fee with no monthly insurance often compares well, especially if you keep the loan for many years. Use our payment calculator and switch the loan type between VA, FHA and conventional to see the monthly difference for your numbers.
Closing costs and seller concessions
VA loans still have closing costs, such as the appraisal, title and recording fees. The VA says it does not limit credits for a loan's closing costs, but it limits seller's concessions to no more than 4% of the home's reasonable value. Seller's concessions are anything of value added to the transaction at no extra cost to the buyer. See our closing costs guide for what to expect on the Loan Estimate.
Checking your numbers
Fees in this guide match the VA's funding fee page as checked on the date shown at the top. The VA has changed the rates before, so confirm the current table with your lender and on your Loan Estimate, where the funding fee appears with other loan costs.
This guide is educational. Your lender and the VA determine your eligibility and fee.
Common questions
Can I get the funding fee refunded?
The VA says you may be eligible for a refund if you are later awarded compensation for a service-connected disability with an effective date before your loan closed. Contact your VA regional loan center.
Does the funding fee depend on my credit score?
No. The VA's table depends on the loan type, your down payment and whether you have used the benefit before.
Do I have to finance the fee?
No. The VA says you can pay it at closing or roll it into the loan. Financing it means paying interest on it.
Sources
- VA, VA funding fee and loan closing costs
- VA, Purchase loan
- CFPB, What is mortgage insurance and how does it work?
Checked Nov 11, 2026. Spot an error? Tell us.