How Much Is the VA Funding Fee in 2026?
The VA funding fee in 2026 ranges from 0.5% to 3.3% of your loan amount and is required for most borrowers taking out a home loan backed by the U.S. Department of Veterans Affairs (VA). On a $300,000 home, that’s $1,500 to $9,900, depending on the down payment amount and whether you’ve used a VA loan before.
Below, we show exactly what you’ll pay, who qualifies for exemptions and how to lower your funding fee amount.
What is the VA funding fee?
The VA funding fee is an upfront cost that borrowers pay to the U.S. Department of Veterans Affairs (VA) when they close on a VA loan. The funding fee is unique to VA loans and helps defray some costs of running a loan program that doesn’t require a down payment or mortgage insurance.
Exactly how much you’ll pay varies based on a few factors, including:
- Your down payment amount
- Your loan purpose (buying, building, tapping home equity or reducing your interest rate)
- The number of times you’ve used your VA home loan benefits (first time versus repeat use)
- How you choose to pay it (upfront versus rolled into your mortgage)
How much is the VA funding fee?
The VA funding fee is calculated as a percentage of your total loan amount and can range from 0.5% to 3.3%. On a median-priced home today, that comes to around $2,026 to $13,275.
The exact rates for VA funding fees in 2026 are in the chart below.
VA funding fee chart for purchase and construction loans
On purchase and construction loans, veterans taking out a VA loan for the first time will receive a better rate than repeat or subsequent users of the benefit. However, you can also lower your rate by making a larger down payment.
| Loan type | Down payment | First-time user | Repeat user |
|---|---|---|---|
| Purchase and construction loans | Less than 5% | 2.15% | 3.30% |
| 5% or more | 1.50% | 1.50% | |
| 10% or more | 1.25% | 1.25% |
VA funding fee chart for refinance loans
The VA offers two different types of refinance products: the VA interest rate reduction refinance loan (IRRRL), which allows you to secure a lower interest rate or change your loan repayment term, and the VA cash-out refinance, which allows you to borrow from the equity you’ve built in your home.
Since the IRRRL is designed to help make your housing payment more affordable, you’ll catch a break on the funding fee. That’s not the case if you’re interested in doing a cash-out refinance, though.
| Loan type | First-time user | Repeat user |
|---|---|---|
| VA cash-out refinance | 2.15% | 3.30% |
| IRRRL | 0.50% | 0.50% |
VA funding fee chart for other loan types
The VA also offers loans for less common lending scenarios, which include buying a manufactured home or assuming a home loan. Here’s what some of those fees will look like:
| Loan type | First-time user | Repeat user |
|---|---|---|
| Native American Direct Loan (NADL) | 1.25% | 0.50% |
| Manufactured home loans | 1.00% | 1.00% |
| VA loan assumptions | 0.50% | 0.50% |
| Purchasing a VA-acquired property | 2.25% | 2.25% |
How can I reduce my VA funding fee?
- Make a larger down payment
- Choose to refinance without taking cash out
- Choose a manufactured home instead of a site-built home
- Pay the fee up front instead of rolling it into the loan
Should you finance the VA funding fee or pay it up front?
Rolling the funding fee into your loan is common, but it means paying more in interest and starting off homeownership with negative equity.
It also increases your loan amount, which can push you over the loan-to-value (LTV) ratio and debt-to-income (DTI) ratio thresholds. That could matter down the line if you want to refinance or if home values drop and you’re left underwater.
| Fee strategy | Pros | Cons |
|---|---|---|
| Finance the fee |
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| Pay up front |
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VA funding fee exemptions
Not every military borrower is required to pay the funding fee. There are a few exemptions available, according to the VA, including:
- If you’re receiving compensation for a service-related disability.
- If you’re eligible to earn pay for a service-related disability, but you’re receiving retirement or active-duty pay instead.
- If you’re an active-duty service member who, on or before the closing date, can document that you’ve received the Purple Heart.
- If you’re a service member with a “proposed or memorandum rating” (received before the closing date) that establishes compensation eligibility because of a pre-discharge claim.
- If you’re the surviving spouse of a veteran and you’re receiving Dependency and Indemnity Compensation.
The first step is to fill out the Verification of VA Benefits Form to confirm any VA benefits that you receive. If your claim case is in progress while you’re in the process of buying a home, you’ll likely need to pay the VA funding fee up front and apply for a refund after the case has been closed in your favor.
However, if your claim case is closed, your exemption status will likely be listed on your certificate of eligibility (COE) and your lender may just use that to remove the funding fee from your loan’s closing costs.
How does the VA funding fee compare to FHA mortgage insurance (UFMIP)?
| VA loan | FHA loan | |
|---|---|---|
| Upfront fee | 0.5% to 3.3% of the loan amount | 1.75% of the loan amount |
| Ongoing monthly payments | None | Required: 0.15% to 0.75% of your loan amount |
| Can it be reduced by making a larger down payment? | Yes, you can reduce the fee’s dollar amount by up to 0.90 percentage points (for a first-time user) or 2.05 percentage points (for a repeat user) by putting at least 10% down on a home purchase, for example. | Yes, putting at least 10% down allows you to stop making payments after 11 years. |
| Requires military eligibility | Yes | No |
Takeaway: At first glance, FHA mortgage insurance looks like it could be cheaper up front (for anyone whose VA funding fee would be more than 1.75% of the loan amount), but that’s only part of the picture. You should also consider the ongoing mortgage insurance costs of an FHA loan and the impact of your down payment amount.
How do I pay the VA funding fee?
- Determine your funding fee amount. The best place to start when trying to determine the amount you’ll owe is with your COE. It should tell you if you’re exempt from paying the fee for any reason.
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Do the math. Once you have that information, match up the loan type with your status in the charts above. For example, if you are buying a house with no down payment and are a first-time user, your funding fee is 2.15% of your loan amount. A $300,000 home loan would have a $6,450 funding fee ($300,000 x 0.0215 = $6,450).
Your loan paperwork — specifically the loan estimate and closing disclosure — should also confirm the exact amount. - Decide how you want to pay the fee. In most cases, the funding fee is rolled into your loan amount and financed over the life of the loan. However, you can also cover it out of pocket at closing or even negotiate with the seller to have them cover it.
What other VA loan closing costs do I pay?
Aside from the funding fee, you’ll pay additional VA closing costs, including a credit report fee, origination fee, VA appraisal fee and title insurance. Total lender fees for VA loans are capped at 1% of your loan amount, plus reasonable discount points.
There are non-allowable fees that can’t be charged to a VA borrower, however, including application fees, rate lock fees and escrow fees.
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