VA Funding Fee: 2026 Rates, Exemptions & Calculator

The VA funding fee is a one-time charge paid by most veterans who use VA home loans to help sustain the VA loan program for future generations of service members. VA funding fees typically range from 1.25% to 3.3% of your loan amount, depending on your loan type, down payment size, and whether you've used VA benefits before. Understanding VA funding fees, exemptions, and payment options helps you accurately budget for your home purchase or refinance.

Use our VA funding fee calculator to instantly estimate your exact fee based on your specific loan details and circumstances.

What Is a VA Funding Fee?

The VA loan program is one of the most generous home financing options available to eligible borrowers. The Department of Veterans Affairs charges funding fees to help sustain this valuable program without requiring ongoing taxpayer support. These one-time charges help ensure that future generations of military members can access the same exceptional benefits.

Veterans and active-duty service members who use VA home loans receive significant advantages over conventional loan options, including:

• No down payment requirement – Buy with zero money down
• No private mortgage insurance (PMI) – Avoid monthly insurance premiums
• Competitive interest rates – Often lower than conventional mortgages
• Flexible credit requirements – More lenient than conventional standards

The VA funding fee helps offset program administration and loss mitigation costs, making it self-sustaining for future veterans. Unlike conventional mortgages where lenders charge origination fees, VA regulations prohibit most lender fees and restrict closing costs, which offsets the impact of the funding fee.

2026 VA Funding Fee Rates by Loan Type

VA funding fee rates for 2026 vary significantly based on loan type, down payment amount, and whether you're a first-time or repeat VA loan user. Here are the current rates:

Purchase Loans (First-Time VA Loan Users)

• No down payment: 2.15% of loan amount
• 5% to 9.99% down payment: 1.5% of loan amount
• 10% or more down payment: 1.25% of loan amount

Purchase Loans (Subsequent Use/Repeat Borrowers)

• No down payment: 3.3% of loan amount
• 5% to 9.99% down payment: 1.5% of loan amount
• 10% or more down payment: 1.25% of loan amount

Interest Rate Reduction Refinance Loan (IRRRL/VA Streamline)

• All borrowers: 0.5% of loan amount

VA Cash-Out Refinance

• First-time use: 2.15% of loan amount
• Subsequent use: 3.3% of loan amount

Example: If you're a first-time VA loan user buying a $350,000 home with no down payment, your VA funding fee would be $7,525 (2.15% × $350,000). Most borrowers finance this fee into their mortgage rather than paying it in cash at closing.

VA Funding Fee Exemptions for Disabled Veterans

The VA recognizes that certain veterans have already sacrificed greatly for our country. Veterans with a service-connected disability rating of 10% or higher are completely exempt from all VA funding fees, regardless of loan type or loan amount. This substantial benefit can save disabled veterans thousands of dollars over the life of their loan.

Who Qualifies for VA Funding Fee Exemptions?

Disabled veterans (10%+ rating): Any veteran with a VA service-connected disability rating of 10% or higher automatically qualifies for a complete funding fee exemption. You must provide official documentation from the VA (Certificate of Eligibility) showing your disability rating during the loan application.

Surviving spouses: Surviving spouses of veterans who died in service or from service-connected conditions also qualify for complete exemptions.

Veterans pending disability determination: In some cases, veterans who have applied for a disability rating but haven't yet received their official determination may be eligible for a conditional exemption. You must ultimately receive a 10%+ rating for the exemption to be final.

Documentation Requirements

To claim your VA funding fee exemption, provide your mortgage lender with:

• Certificate of Eligibility (COE) – Shows your disability rating and exemption status
• VA disability determination letter – Official documentation from the VA confirming your rating

Your lender will verify your exemption status before loan approval. Once confirmed, the funding fee will be removed from your loan estimate, saving you thousands of dollars.

How to Pay Your VA Funding Fee

Veterans have two primary options for handling the VA funding fee: paying it upfront at closing or financing it into the loan. Most VA borrowers choose to finance the fee to preserve cash for moving expenses and other costs.

Option 1: Pay at Closing

Bring a cashier's check to closing to pay the entire funding fee upfront. This keeps your loan balance lower and reduces the total interest you'll pay over 30 years. However, it requires significant cash at closing when you may need funds for moving, inspections, and appraisals.

Option 2: Finance the Fee Into Your Loan

Roll the funding fee into your total loan amount and pay it off gradually with your monthly mortgage payment. You'll pay interest on the fee amount over the loan term, increasing your monthly payment slightly (typically $30–$50 per month on a $350,000 loan). This is the most popular choice because it preserves cash at closing while spreading the cost over time.

Use our funding fee calculator to see both payment scenarios and understand the long-term cost difference.

VA Funding Fee vs. Other Loan Costs

While VA funding fees might seem like an additional cost, they're actually a bargain compared to conventional loan alternatives. Here's why:

VA Loans vs. Conventional Loans

Conventional mortgage borrowers typically pay:

• Down payment: 5–20% ($17,500–$70,000 on a $350,000 home)
• Private mortgage insurance (PMI): 0.5–1% annually ($1,750–$3,500/year = $52,500–$105,000 over 30 years)
• Higher closing costs: Origination fees, processing fees, underwriting fees
• Higher interest rates: Often 0.25–0.5% higher than VA rates

VA loan borrowers pay just a one-time 2.15% fee (first-time, no down payment), which is $7,525 on a $350,000 loan. Over time, VA loans typically save veterans $100,000+ compared to conventional financing.

Can You Get a Refund on Your VA Funding Fee?

Yes, under specific circumstances. If you receive a disability rating determination after your VA loan closes, you may qualify for a funding fee refund.

VA Funding Fee Refund Process

• Step 1: Receive your disability rating determination from the VA
• Step 2: Gather documentation (VA decision letter, original closing documents)
• Step 3: Contact the VA loan servicer or your original lender
• Step 4: Submit your refund request with supporting documentation
• Step 5: Receive your refund (typically 60–120 days after approval)

The VA processes refunds including the full fee amount plus applicable interest. This policy protects veterans whose service-connected conditions are discovered after homeownership begins.

VA Funding Fee FAQs

Is the VA funding fee the same at all lenders?

Yes. The VA funding fee rate is set by the Department of Veterans Affairs and is identical at every lender. Interest rates, closing costs, and service quality may vary by lender, but the VA funding fee percentage is standardized across all VA-approved mortgage lenders.

What if I have an existing VA loan and buy another home?

If you've already used your VA loan benefits and want to purchase another home, you can restore your entitlement by paying off your first VA mortgage. Once restored, you'll pay the first-time user rate (2.15%) on your second purchase. Alternatively, you can use a VA streamline refinance (IRRRL) on your current loan, which carries only a 0.5% funding fee.

Do I have to pay the funding fee if I'm buying in a rural area?

No difference. The VA funding fee applies equally to all VA purchase loans and refinances, whether you're buying in rural or urban areas. However, you may qualify for USDA rural home loans if you don't qualify for VA benefits, which have different fee structures.

Can my seller pay my VA funding fee?

No. VA regulations prohibit sellers from paying veteran borrowers' funding fees. However, sellers can cover other closing costs, appraisals, and inspections. This is one reason why negotiating seller-paid closing costs is important for VA buyers.

How does the VA funding fee compare to FHA mortgage insurance?

The VA funding fee vs. FHA mortgage insurance is a key comparison. FHA borrowers pay both an upfront mortgage insurance premium (1.75% at closing) and annual premiums (0.5–0.8% per year). VA borrowers pay only the one-time funding fee with no ongoing insurance costs, making VA loans significantly cheaper over time.

Next Steps: Calculate Your VA Funding Fee Today

Understanding your exact VA funding fee is essential for accurate budget planning. Use our free VA funding fee calculator to instantly estimate your fee based on:

• Loan amount
• Down payment percentage
• Loan type (purchase, IRRRL, cash-out refi)
• First-time or subsequent use

Once you understand the funding fee, explore other VA loan advantages that make it one of the best home financing options available. From competitive interest rates to flexible credit requirements, VA loans deliver exceptional value for veterans.