The VA funding fee is a one-time charge that helps keep the VA loan program running without ongoing mortgage insurance. For a purchase with no down payment it is 2.15% of the loan for first-time use and 3.3% for later use, and it falls with a larger down payment. Veterans with a service-connected disability are exempt.
What Is the VA Funding Fee?
The VA funding fee is a one-time payment to the Department of Veterans Affairs that helps the loan program stay self-sustaining and lowers the cost to taxpayers. Because VA loans charge no monthly private mortgage insurance, this single fee largely takes its place — and unlike PMI, it does not recur every month.
The amount you pay depends on three things: the type of loan, your down payment, and whether this is the first time you have used your VA benefit. The fee schedule below has been in effect since April 7, 2023 and applies in 2026.
VA Funding Fee Rates for 2026 (Purchase and Construction)
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% (including zero down) | 2.15% | 3.3% |
| 5% to less than 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Putting money down lowers the fee. At a 5 percent down payment, the rate is the same for first-time and repeat users.
Funding Fee for VA Refinances
| Refinance type | First use | Subsequent use |
|---|---|---|
| Cash-out refinance | 2.15% | 3.3% |
| Interest Rate Reduction Refinance Loan (IRRRL, or streamline) | 0.5% | 0.5% |
The IRRRL streamline refinance carries the lowest fee of any VA loan at just 0.5 percent, regardless of how many times you have used your benefit.
Who Is Exempt From the VA Funding Fee?
You do not have to pay the funding fee if any of the following apply to you:
- You receive VA compensation for a service-connected disability.
- You are eligible to receive VA compensation for a service-connected disability but are receiving retirement or active-duty pay instead.
- You are a surviving spouse receiving Dependency and Indemnity Compensation (DIC).
- You are a service member with a proposed or memorandum rating dated before your loan closing.
- You are an active-duty service member who provides evidence, on or before closing, that you received a Purple Heart.
How the Funding Fee Is Paid
You can pay the funding fee in cash at closing or finance it into the loan. Most borrowers roll it into the mortgage so they keep their out-of-pocket costs near zero. Financing the fee increases your loan balance and the interest you pay over time, but it preserves your cash for moving and other expenses.
How to Estimate Your VA Funding Fee
- Confirm your loan type. Purchase, construction, cash-out refinance, or IRRRL each use a different rate.
- Find your rate. Match your down payment and first-versus-subsequent use to the tables above.
- Multiply by the loan amount. For example, on a $300,000 purchase with no money down and first-time use, 2.15% equals $6,450.
- Decide how to pay it. Add it to your loan balance or bring it in cash at closing.
- Check for an exemption. If you receive disability compensation, confirm with your lender that the fee is waived.
Frequently Asked Questions
How much is the VA funding fee in 2026?
For a purchase with no down payment it is 2.15 percent of the loan for first-time use and 3.3 percent for later use. A down payment of 5 percent or more lowers the fee to 1.5 percent or 1.25 percent.
Who is exempt from the VA funding fee?
Veterans receiving compensation for a service-connected disability, certain surviving spouses receiving DIC, and active-duty Purple Heart recipients are exempt, among others.
Can you roll the VA funding fee into the loan?
Yes. Most borrowers finance the funding fee into the mortgage so they pay little or nothing out of pocket at closing. This raises the loan balance and total interest.
Is the VA funding fee refundable?
It can be. If you were entitled to a funding fee exemption but paid the fee, you may be able to request a refund through the VA and your lender.
Does the funding fee replace mortgage insurance?
Effectively, yes. VA loans charge no monthly private mortgage insurance. The one-time funding fee takes its place and does not recur each month.