VA Funding Fee 2026:How Much It Costs and Who Is Exempt
The VA funding fee is the one-time cost of using your VA home loan benefit — and for many veterans it is the biggest line item they did not expect at closing. In this guide we break down the 2026 rates by down payment and loan use, show what the fee actually costs on a real loan, explain who is exempt, and cover the exemptions, financing and refund rules borrowers ask about most.
Saman Khanian
Author & Mortgage Professional
First use, 0% down
2.15% of the loan
Commonly cited basic VA funding fee rate for 2026
What Is the 2026 VA Funding Fee?
For most borrowers using a VA loan for the first time with no down payment, the VA funding fee is 2.15% of the loan amount. On a $400,000 loan that is about $8,600. The exact amount depends on three things: your down payment, whether you have used a VA loan before, and the service category you qualify under.
Not every veteran pays it. Borrowers who receive VA compensation for a service-connected disability are generally exempt, as are some surviving spouses and borrowers with certain disability ratings. Your lender can confirm whether an exemption applies before closing.
Basic rate
2.15%
First use, no down payment (commonly published rate)
Later use, 0% down
3.30%
Applies when you have used your VA entitlement before
Paid at closing
One time
Can usually be financed into the loan instead of paid in cash
Six Things That Set Your VA Funding Fee
The fee is not one flat number. Before you compare loan offers, make sure you know where you land on each of these six points.
Know your loan amount
The fee is a percentage of your base VA loan amount — the figure changes with every $10,000 of loan.
First use or later use
Using your entitlement a second time typically more than doubles the fee at 0% down.
How much you put down
Putting 5% or 10% down drops the rate to 1.50% or 1.25% for most borrowers.
Your service category
National Guard and Reserve borrowers with certain service history pay a different rate table.
Exemption status
VA disability compensation recipients and some surviving spouses may owe no fee at all.
Cash or financed
Decide whether to pay the fee in cash at closing or roll it into the loan before you compare offers.
What Is the VA Funding Fee?
It is a one-time charge the Department of Veterans Affairs assesses on most VA-guaranteed home loans. It is how the program pays for itself: because VA loans generally require no down payment and no monthly mortgage insurance, Congress created the funding fee to keep the VA loan guarantee funded for future veterans.
Unlike private mortgage insurance, the VA funding fee is paid once at closing — it does not appear on your monthly statement. And unlike most closing costs, it can often be financed into the loan, which means buyers frequently roll it into the balance and pay it off over time rather than bringing it as cash.
Funding fee vs. loan origination fee: they are two different costs. The origination fee is charged by your lender; the funding fee is charged by the VA program. Both may appear on your closing disclosure, and both can often be financed.
No monthly mortgage insurance — the funding fee is a one-time trade-off.
A one-time closing cost
It is charged once when the loan is funded — not a monthly fee, and not mortgage insurance.
A percentage of the loan
The rate ranges from 1.25% to 3.30% for most borrowers and is applied to your base loan amount.
Insurance for the program
The fee helps fund the VA home loan program so it can keep offering no-down-payment loans to veterans.
Often rolled into the loan
Many buyers finance the fee instead of paying cash, so the cash needed at closing stays lower.
How the Fee Is Calculated
The calculation itself is simple — the part that matters is knowing which rate applies to you. Three steps get you there.
Start with your base loan amount
This is the purchase price minus your down payment and any seller credits — before the funding fee is added.
Find your rate in the chart
The percentage depends on your down payment, first-time or subsequent use, and service category.
Multiply and add
Base loan × funding fee rate = your fee. If you finance it, the fee is added to the loan balance.
What Financing the Fee Actually Costs
Financing the fee keeps cash in your pocket at closing, but you pay interest on it for the life of the loan. The table shows a basic 2.15% fee on loans of different sizes, at an illustrative 6.50% rate over 30 years.
It is a trade-off worth understanding: on a $400,000 loan the fee is about $6,000 financed, which adds roughly $38 a month and about $13,650 in interest over 30 years if you never pay extra.
Paying the fee in cash avoids that interest entirely. Which is better depends on how long you plan to keep the loan and whether the cash is better used elsewhere.
| Loan Amount | Fee (2.15%) | Extra / Month | 30-Yr Interest |
|---|---|---|---|
| $300,000 | $4,500 | $28.44 | $10,238 |
| $400,000 | $6,000 | $37.92 | $13,651 |
| $500,000 | $7,500 | $47.41 | $17,064 |
| $600,000 | $9,000 | $56.89 | $20,480 |
Illustrative only. Assumes a 360-month amortization at 6.50% with no extra payments and a fee financed into the loan. Your rate, loan amount and term will differ.
VA Funding Fee Rates in 2026
These are the commonly published VA funding fee percentages for the standard service category. Purchase loans use your down payment; cash-out refinances use your loan-to-value instead.
Purchase Loans
| Scenario | First Use | Subsequent Use |
|---|---|---|
| 0% down | 2.15% | 3.30% |
| 5% down | 1.50% | 1.50% |
| 10% or more down | 1.25% | 1.25% |
Rates apply to the base loan amount. Confirm the current figure with your lender before closing — VA fee schedules can change.
Cash-Out Refinance
| Scenario | First Use | Subsequent Use |
|---|---|---|
| Loan at or below 90% LTV | 2.15% | 3.30% |
| Loan above 90% LTV | 2.15% | 3.30% |
On a cash-out refinance the LTV threshold applies to first-time use. Borrowers using the loan more than once generally pay 3.30% of the loan amount in the cash-out scenario.
VA Streamline (IRRRL) refinance: 0.50% — or 0%
A VA Interest Rate Reduction Refinance Loan carries a much lower funding fee of 0.50% of the loan amount. Borrowers receiving VA disability compensation, and certain surviving spouses, pay no fee at all on an IRRRL.
Tell us whether this is your first VA loan — it directly affects your funding fee.
What the Funding Fee Costs on a Real Loan
Percentages are abstract until you see dollar amounts. Here is the same $500,000 purchase priced three different ways.
$500,000 home, 0% down
- Purchase price
- $500,000
- Down payment
- $0
- Base loan amount
- $500,000
- Funding fee (2.15%)
- $10,750
Financed loan: $510,750
No cash down. The fee is financed into the loan, so the buyer brings only closing costs and prepaid items.
$500,000 home, 0% down, second VA loan
- Purchase price
- $500,000
- Down payment
- $0
- Base loan amount
- $500,000
- Funding fee (3.30%)
- $16,500
Financed loan: $516,500
Using entitlement again with no down payment nearly doubles the fee — which is why some borrowers save 5% to bring it down.
$500,000 home, 10% down, later use
- Purchase price
- $500,000
- Down payment
- $50,000
- Base loan amount
- $450,000
- Funding fee (1.25%)
- $5,625
Financed loan: $455,625
Putting 10% down drops the fee to 1.25% even on a subsequent-use loan — a common strategy for repeat buyers.
Does Putting Money Down Save on the Fee?
Yes — on a purchase, a down payment of at least 5% typically drops the funding fee from 2.15% to 1.50%, and 10% or more drops it to 1.25%. For repeat buyers, that is the difference between 3.30% and 1.25%.
On a $500,000 home, putting 10% down saves about $5,125 in funding fee compared with 0% down — on top of a smaller loan and a smaller monthly payment.
The catch: the cash you put down could stay invested or available for emergencies. Run the numbers both ways — a loan officer can model both scenarios for you.
| Scenario | Down | Base Loan | Fee |
|---|---|---|---|
| 0% down · first use | $0 | $500,000 | $10,750 (2.15%) |
| 5% down · first use | $25,000 | $475,000 | $7,125 (1.50%) |
| 10% down · first use | $50,000 | $450,000 | $5,625 (1.25%) |
All three examples assume a $500,000 purchase price and first use of VA entitlement. The fee is applied to the base loan amount before it is financed.
Who Is Exempt From the VA Funding Fee?
Congress exempted veterans with service-connected disabilities from the fee. If you fall into one of these categories, your VA loan may carry no funding fee at all.
VA disability compensation recipients
Veterans who receive VA compensation for a service-connected disability are exempt — including borrowers who receive compensation in lieu of retirement pay.
Veterans rated eligible to receive compensation
Borrowers who are rated by the VA as eligible to receive compensation because of a status change (such as a pre-discharge disability determination) are treated the same way.
Surviving spouses of certain veterans
Unmarried surviving spouses of veterans who died in service or from a service-connected disability are generally exempt. Some other surviving-spouse categories may also apply — eligibility depends on the specific circumstances.
Active duty service members with disabilities
Active duty service members who provide evidence of a pre-discharge rating or eligibility may be exempt. Bring your documentation to your loan officer early.
Tell your loan officer up front
Mention any service-connected disability rating or survivor status in the first conversation — it changes the numbers on your loan estimate.
Provide proof
Your lender will need documentation, such as a VA benefits letter showing compensation, to apply the exemption.
Confirm on the closing disclosure
Before you sign, check that the funding fee line shows zero or the exempt amount you expect.
Think you may be exempt?
Send us a note about your disability rating or survivor status. We will confirm the exemption, document it properly, and make sure it is reflected on your loan — no fee if you qualify.
National Guard & Reserve Funding Fees
National Guard and Reserve members who qualify for VA home loan benefits through certain service history use a separate funding fee table. The rates are slightly different from the standard table, and — unlike the standard table — the fee does not increase based on prior loan use.
If your service was activated under qualifying orders, you may also qualify for standard rates instead. The right table depends on your individual service history, so it is worth having a loan officer review it with you.
Eligible surviving spouses generally use the same rates as the table that applies to the veteran's service, unless an exemption applies.
National Guard & Reserve Rates
| Down Payment | First Use | Subsequent |
|---|---|---|
| 0% down | 2.40% | 2.40% |
| 5% down | 1.75% | 1.75% |
| 10% or more down | 1.50% | 1.50% |
Commonly published Guard and Reserve fee percentages. Confirm the applicable rate with your lender based on your service history.
Pay the VA Funding Fee in Cash or Finance It?
You have two ways to handle the fee. Neither is automatically wrong — the better choice depends on your cash position and how long you expect to keep the loan.
Pay it in cash at closing
- No interest is ever paid on the fee
- Lower loan balance and monthly payment
- Cleaner long-term cost
- More cash needed at closing
- Reduces your post-closing reserves
Best if you have the cash and plan to keep the loan long-term.
Finance it into the loan
- Keeps cash at closing low
- Preserves savings for reserves and repairs
- Simple — nothing extra to bring
- You pay interest on the fee over the loan term
- Slightly higher monthly payment
Best if cash is tight or you would rather keep your savings liquid.
Can the Funding Fee Be Financed or Added to the Loan?
Usually, yes. VA guidelines allow the funding fee to be added to the loan balance, and many borrowers choose to finance it. When it is financed, the loan becomes the base loan plus the fee — for example, a $400,000 base loan with a 2.15% fee becomes a $408,600 loan.
A seller can also pay certain closing costs on a VA loan within program limits — and in some cases seller concessions may help cover the fee or other closing costs. Confirm what is allowed with your lender and real estate agent.
Keep your closing-day cash separate from your reserves — lenders look at both.
Refinance Funding Fees & Refunds
Every new VA loan can carry its own funding fee — including a refinance. Here is what to expect, and how refunds work if you later become exempt.
VA Streamline (IRRRL)
0.50%
A lower-rate refinance with no cash out. First-time and repeat users both pay 0.50%, and exempt borrowers pay nothing.
VA Cash-Out Refinance
2.15%–3.30%
Refinancing to take equity out is priced like a new loan. Repeat users and higher LTVs typically pay more.
Exempt borrowers
0%
Veterans receiving VA disability compensation and eligible surviving spouses pay no funding fee on any of these loans.
Can you get a funding fee refund?
In some cases, yes. If you paid the fee and later become eligible for exemption — for example, because the VA awards you disability compensation after your loan closed — you may be able to request a refund of the fee you paid.
Refunds are handled through the VA, not your lender. Gather your award letter and loan documents, and confirm current procedures with the VA or your loan officer before submitting a request.
Does refinancing trigger the fee again?
Often, yes. A cash-out refinance into a new VA loan is treated like a new loan and can carry a full funding fee. A VA streamline (IRRRL) carries the much lower 0.50% rate — or nothing, if you are exempt.
Because of this, it is worth comparing a VA refinance with conventional options, especially if you want cash out but are not exempt.
VA Funding Fee Calculator
Estimate your funding fee using the commonly published rates. Your lender's figures on the loan estimate are the final word — but this gives you a solid planning number.
Estimated funding fee
$10,750
2.15% of a $500,000 base loan
- Down payment
- $0
- Base loan amount
- $500,000
- Loan if fee financed
- $510,750
Estimate only, using commonly published 2026 rates. Loan amount capped at VA loan limits may affect your figure. Confirm with a licensed loan officer.
Five Mistakes Borrowers Make With the Funding Fee
These are the issues that show up most often in VA loan files. Avoiding them keeps more money in your pocket and fewer surprises at closing.
Assuming the fee is 2.15% for everyone
Repeat buyers with no down payment commonly pay 3.30%. Guard and Reserve members use a different table. Check your own scenario before budgeting.
Forgetting to mention a disability rating
An exemption you do not claim is money you do not get back at closing. Tell your loan officer on day one and provide documentation.
Not comparing cash vs. financed
Financing the fee adds interest for the full term. Ask for both loan estimates side by side — the difference in monthly payment and total interest is easy to see.
Skipping the IRRRL fee comparison
A streamline refinance carries 0.50% instead of a full fee. If you are refinancing for a lower rate, the loan type can save thousands.
Using up reserve cash to pay the fee
Lenders verify you have cash left after closing. Paying the fee in cash may solve one problem and create another — plan both numbers together.
Run the numbers early
Use the calculator above to estimate your fee before you start house hunting, so your budget reflects the real number.
Get pre-approved with the fee in view
A pre-approval that accounts for a financed fee shows your true buying power, not a number that shrinks later.
Review your loan estimate
The funding fee appears in your closing costs. Compare lenders on the same loan amount and the same fee scenario.
Keep Reading
Related VA Loan Guides
VA Loan Requirements in 2026
Eligibility, credit score, down payment and income rules that decide approval.
Read the guide
FHA & VA Loan Options
Compare government-backed programs and see which fits your goals.
Read the guideVA Streamline Refinance Explained
How the IRRRL works and why its funding fee is only 0.50%.
Read the guideVA Funding Fee: Frequently Asked Questions
The questions veterans and their families ask us most often.
It is a one-time fee charged on most VA-guaranteed loans, calculated as a percentage of the loan amount. For most first-time users with no down payment the commonly published rate is 2.15%; repeat users with no down payment typically pay 3.30%.
Saman Khanian
Saman Khanian is the CEO of Equitable Lending, a Los Angeles mortgage lender helping veterans, first-time buyers, homeowners and investors finance their homes. He writes about VA, FHA, conventional and Non-QM lending, with a focus on explaining costs and eligibility in practical terms.
View Full ProfileDisclosure: This article is for informational purposes only and does not constitute a loan commitment, rate quote, or financial, legal or tax advice. VA loan eligibility and approval depend on VA guidelines, lender guidelines and overlays, and your individual qualifications — meeting a stated requirement does not guarantee approval, and funding fee rates and program rules can change. Figures shown are illustrative and based on commonly published VA rates; confirm the current fee with your lender. All loans are subject to credit approval and underwriting. Equal Housing Opportunity. Equitable Lending — NMLS #1124483, DRE #01941713. See our Licensing Information and speak with a licensed loan officer about your situation.
Know Your Number Before You Close
We will calculate your exact VA funding fee, confirm whether an exemption applies, and show you how paying versus financing it changes your bottom line. No obligation — just clear numbers.
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