Last updated: October 17, 2026
The VA funding fee is a one-time payment applied to most VA-backed home loans, including refinance and cash-out options. This fee helps offset the cost to taxpayers and keeps the loan program running. While it generally applies to most borrowers, certain Veterans, service members, and eligible surviving spouses may be exempt. You can pay this fee at closing or finance it into your loan amount.
Understanding the VA Funding Fee for Refinance Loans
When you choose a VA Interest Rate Reduction Refinance Loan (IRRRL), often called a streamline refinance, a specific funding fee applies. The IRRRL is designed to help you lower your interest rate or convert an adjustable-rate mortgage (ARM) to a fixed rate. This type of refinance does not allow you to take cash out from your home equity. For most borrowers, the funding fee for an IRRRL is 0.50% of the loan amount. This fee applies every time you use an IRRRL, unless you are exempt. You can find more details on funding fees at the VA's official website: https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/.
You'll need to certify that you previously occupied the property as your home for an IRRRL. While credit and income verification might be streamlined for an IRRRL compared to other loan types, lender requirements can vary. To learn more about this specific refinance option, you can explore our guide on proven requirements for a VA streamline refinance.
VA Funding Fee for Cash-Out Refinance Loans
A cash-out refinance allows you to tap into your home's equity by replacing your existing mortgage with a new, larger VA-backed loan. The difference is given to you in cash at closing. The funding fee for a cash-out refinance is a flat rate, regardless of your equity or loan-to-value (LTV) ratio. For your first use of a cash-out refinance, the funding fee is 2.15% of the loan amount. If you have used your home loan benefit before and this is a subsequent use, the funding fee is 3.30% of the loan amount. As with other these loans, you can choose to pay this fee at closing or finance it into the new loan. Always refer to www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/ for the latest official figures.
A cash-out refinance requires a full appraisal and credit underwriting, similar to a purchase loan. This ensures the property meets Minimum Property Requirements (MPRs) for safety, soundness, and sanitation. With a cash-out refinance, you must intend to occupy the home as your primary residence. To explore how this option could work for you, consider trying your own numbers in the calculator on this page. For example, if you wanted to refinance a $300,000 loan and take out an additional $50,000, your new loan would be $350,000 (plus the financed funding fee). If this were your first cash-out refinance, the funding fee would be 2.15% of $350,000, which is $7,525. Your total financed amount would then be $357,525. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
Get your VA Pre-Approval Summary.
Complete the short form and we send back a full VA breakdown: your entitlement, the VA funding fee, and an estimated $0-down monthly payment — with no mortgage insurance, ever.
- Your entitlement and county loan limit (if applicable)
- $0 down payment — no mortgage insurance, ever
- One-time VA funding fee, financeable into the loan
- Estimated monthly payment with taxes and insurance
Summary emailed and shown on screen · Not an approval or commitment to lend
Illustration only, generated from the information you enter. Not a Loan Estimate, pre-qualification, commitment to lend, or approval. Subject to appraisal, credit and income review, VA guidelines, and final lender approval. Not affiliated with, endorsed by, or sponsored by the U.S. Department of Veterans Affairs. Equal Housing Opportunity.
- Purchase price
- $385,000
- Down payment
- $0
- Base loan amount
- $385,000
- Financed funding fee (2.15%)
- $8,278
- Est. monthly payment
- $2,690
Sample figures · Simply Approved Mortgages · NMLS #2620881 · Equal Housing Opportunity
Who is Exempt from the VA Funding Fee?
Not every Veteran, service member, or eligible surviving spouse needs to pay the funding fee. You are exempt from the funding fee if you are:
- A Veteran receiving VA compensation for a service-connected disability.
- A Veteran who would be entitled to receive VA compensation for a service-connected disability if you did not receive retirement pay.
- A Veteran rated eligible for VA compensation based on a pre-discharge exam or review.
- An active-duty service member who has been awarded the Purple Heart.
- A qualifying surviving spouse of a Veteran who died in service or from a service-connected disability.
Your Certificate of Eligibility (COE) will confirm your exemption status. If you are granted a service-connected disability rating after your loan closes, you may be entitled to a refund of the funding fee.
When a VA Refinance Loan Fits (and When it Might Not)
A VA refinance loan can be a powerful tool for eligible borrowers. An IRRRL is a great fit if your primary goal is to lower your interest rate and monthly payment without taking out cash. It's often a simpler process, with less documentation required, and it doesn't allow for cash-out. You can learn more about this by comparing the options: choosing between VA IRRRL for Veterans.
A cash-out refinance, on the other hand, is suitable if you need access to your home equity for purposes like home improvements, debt consolidation, or other significant expenses. It allows you to convert equity into usable cash. However, keep in mind that taking cash out increases your loan amount and potentially your monthly payment, and it requires a full underwriting process. For a cash-out refinance, a common lender cap on the loan-to-value is 90%, including the financed funding fee. However, some investors in our network may offer a higher-LTV cash-out option up to 100% LTV, typically with a FICO of 620, a higher loan balance floor, and a requirement that the home is not owned free and clear. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.) (Source: participating lender and investor program guidelines)
(These are lender overlays, not VA rules, and terms vary by lender, investor, and file.) (Source: participating lender and investor program guidelines)
Related VA Home Loan Resources
- Get my estimate
- VA home loan calculator
- how a home loan works
- VA home loan guide
VA cash-out refinance calculator: run your own numbers
Edit the fields to see how a new rate and cash-out amount change your payment. Uses the 2.15%/3.30% VA cash-out funding fee — there's no monthly mortgage insurance.
Estimates only. Nothing here is an application, pre-qualification, pre-approval, rate quote, rate lock or commitment to lend. You can keep using this tool without giving us anything.
Estimates only — not a loan offer, rate lock, or commitment to lend. Taxes, insurance, and rates vary by county and credit profile.
Related reading
- Understanding the VA Home Loan Funding Fee
- Calculating Your VA Funding Fee: What to Expect
- Who Is Exempt From the VA Funding Fee?
- VA Funding Fee Changes And Updates: What To Know For 2026
- Recouping or Disputing a VA Funding Fee Payment
Figures in this example are illustrative for education only. They are not an offer of credit, not a quote, and no rate, APR, payment, or fee is being advertised. Actual terms depend on lender underwriting, your Certificate of Eligibility, and pricing available at the time of application.
Sources
This government publication is cited for VA-backed loan program background and general consumer education. Simply Approved Mortgages LLC (NMLS #2620881) is a mortgage broker and is not HUD, FHA, or the CFPB, and is not affiliated with or endorsed by any government agency.
Frequently asked questions
- 01What is the VA funding fee for an IRRRL?
The funding fee for an Interest Rate Reduction Refinance Loan (IRRRL), also known as a streamline refinance, is 0.50% of the loan amount for most borrowers. This fee can be paid at closing or financed into the loan. You can find details on funding fees at www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/.
- 02What is the VA funding fee for a cash-out refinance?
For a cash-out refinance, the funding fee is a flat rate: 2.15% of the loan amount for your first use of the cash-out benefit, and 3.30% for subsequent uses. This fee does not change based on your equity or loan-to-value and can be financed into the loan or paid at closing. For official details, visit www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/.
- 03Can the VA funding fee be waived for a refinance or cash-out loan?
Yes, the funding fee can be waived for eligible borrowers. This includes Veterans receiving or entitled to receive VA compensation for a service-connected disability, active-duty Purple Heart recipients, and qualifying surviving spouses. Your Certificate of Eligibility (COE) confirms your exemption status.
- 04Does the VA funding fee depend on my equity or down payment for a refinance?
No, the funding fee for VA refinance loans (both IRRRL and cash-out) does not depend on your equity or a down payment. These fees are flat percentages of the loan amount, with specific rates for IRRRLs and cash-out options, and they are separate from any equity considerations.
- 05How does the VA funding fee affect my loan amount for a refinance?
If you choose to finance the funding fee into your refinance loan, it will increase your overall loan amount. This means your monthly payments will be slightly higher than if you paid the fee out-of-pocket at closing, but it avoids an upfront cost.
- 06Can I get a refund of the VA funding fee?
Yes, if you were incorrectly charged the funding fee, or if you receive a service-connected disability rating from the VA after your loan closes, you may be entitled to a refund. You should contact the VA directly or consult your loan servicer about the refund process.
- 07Is the VA funding fee different for purchase loans compared to refinance loans?
Yes, the funding fee structure differs for purchase loans compared to refinance loans. For purchase loans, the fee varies based on your down payment amount (e.g., less than 5% down, 5% to 9.99% down, or 10% or more down). For refinance loans, the fees are flat percentages, as detailed above, and are not tied to a down payment. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
