Last updated: October 17, 2026
For Veterans, service members, and eligible surviving spouses, understanding the VA funding fee is a key part of planning your home purchase or refinance. For 2026, the structure and percentages of the funding fee remain consistent with previous years, as set by the U.S. Department of Veterans Affairs. This fee helps offset the costs of the home loan program for taxpayers.
This article details the funding fee structure, who is exempt, and how this one-time cost impacts your VA-backed home loan.
Understanding the VA funding fee for 2026
The funding fee is a one-time payment that most borrowers pay on a VA-backed home loan. This fee helps reduce the cost of the program to U.S. taxpayers. The U.S. Department of Veterans Affairs guarantees a portion of your loan made by a private lender, and this fee supports that guarantee. Unlike conventional loans, these loans do not require monthly mortgage insurance premiums, which can save you a substantial amount over the life of your loan. For more on the loan program, visit our page explaining how a VA home loan works.
You can either pay the funding fee at closing or finance it into your loan amount. When financed, it increases your total loan principal but spreads the cost over your loan term. You will still be responsible for ongoing costs like property taxes, homeowners insurance, and home maintenance.
How funding fees are calculated for different loan types
The specific percentage of the funding fee depends on several factors, including the type of loan you are getting, whether it's your first time using the benefit, and your down payment amount for purchase loans. These percentages apply to loans closed in 2026, consistent with previous years.
For purchase and construction loans, the funding fee percentages are based on your down payment amount: * Less than 5% down payment: 2.15% for your first use of the home loan benefit, and 3.30% for subsequent uses. * 5% to 9.99% down payment: 1.50% for either first or subsequent use. * 10% or more down payment: 1.25% for either first or subsequent use. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
For refinance loans, the structure is different: * Cash-out refinance: A flat 2.15% for your first use, and 3.30% for subsequent uses, regardless of your equity or loan-to-value (LTV) ratio. For more information on using this option, explore our guide on VA cash-out refinance loans. * Interest Rate Reduction Refinance Loan (IRRRL), also known as a Streamline Refinance: A flat 0.50% for every borrower who is not exempt. This type of refinance is designed to help you lower your interest rate or convert an adjustable-rate mortgage to a fixed rate, and you generally cannot take equity out of your home. You can learn more about this option by reviewing VA IRRRLs. * Native American Direct Loan (NADL): 1.25% for purchase and 0.50% for an IRRRL. * Loan assumption: 0.50%.
The funding fee percentages are published by the U.S. Department of Veterans Affairs at https://www.va.gov/housing-assistance/home-loans/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 paying the VA funding fee?
Not all eligible borrowers are required to pay the funding fee. Certain individuals are exempt, which means they pay $0 for this fee. This exemption can represent a substantial saving.
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 or active duty pay. * A service member who is rated eligible for VA compensation due to 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, and who is receiving Dependency and Indemnity Compensation (DIC).
Your Certificate of Eligibility (COE) will confirm whether you are exempt from the funding fee. If you are granted a service-connected disability rating after your loan closes, you may be eligible for a refund of the funding fee you paid.
Practical effect on borrowers: an example
Let's look at how the funding fee might affect a purchase loan in 2026.
Suppose you are a first-time VA home loan user, purchasing a home for $400,000.
Scenario 1: Full entitlement, $0 down payment. For eligible borrowers with full entitlement, a $0 down payment is possible. With a $0 down payment, your funding fee would be 2.15% of $400,000, which equals $8,600. This amount can be financed into your loan, making your total loan principal $408,600. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
Scenario 2: 5% down payment. If you put 5% down, which is $20,000, your funding fee drops to 1.50% of the $400,000 purchase price. This equals $6,000. You could finance this $6,000 into your loan, making your loan principal $386,000 ([$400,000 - $20,000] + $6,000). (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
Scenario 3: Exempt borrower. If you are exempt from the funding fee, regardless of your down payment amount, you would pay $0 in funding fees. For a $400,000 home purchase with $0 down, your loan principal would simply be $400,000.
You can estimate your own numbers using the calculator on this page to see how the funding fee might impact your loan. Keep in mind that specific rates and loan amounts are not promised and will depend on your individual qualifications and lender requirements.
How the funding fee fits into your overall loan cost
The funding fee is one component of your overall closing costs, which are expenses you pay to finalize your mortgage. Other closing costs can include appraisal fees, title insurance, and recording fees. The VA limits how much lenders can charge for origination, capping it at 1% of the loan amount, and also defines certain non-allowable fees that cannot be charged to you. (Source: VA funding fee and closing costs.) Seller concessions are allowed up to 4% of the reasonable value, which can help cover some closing costs, on top of customary closing costs. (Source: VA funding fee and closing costs.) This means a seller might contribute funds to reduce the amount you need to bring to closing. (Source: VA funding fee and closing costs.) While the funding fee is a one-time cost, remember that as a homeowner, you will also have ongoing financial responsibilities for property taxes, homeowners insurance, and any applicable homeowners association (HOA) dues, as well as home maintenance.
Simply Approved Mortgages, NMLS #2620881, arranges residential mortgage loans in Florida and Colorado. To understand the full scope of costs and how they apply to your specific situation, you can start by checking your eligibility or explore our VA funding fee calculator for more personalized estimates.
VA home purchase calculator: run your own numbers
Edit the fields to see your down payment, financed one-time VA funding fee, and full monthly payment. VA loans allow $0 down and carry 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?
- 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
These government publications are 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 2026?
For 2026, the VA funding fee structure remains consistent. It ranges from 0.50% to 3.30% of the loan amount, depending on the loan type (purchase, cash-out refinance, IRRRL), the borrower's down payment for purchase loans, and whether it's the first or subsequent use of the VA loan benefit. The specific percentages are detailed on the VA's official website: www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/.
- 02How does a down payment affect the funding fee for VA purchase loans?
For VA purchase loans, making a down payment can reduce the funding fee percentage. For example, with less than 5% down, the fee is 2.15% (first use). With 5% to 9.99% down, it drops to 1.50%. With 10% or more down, it is 1.25%. These down payment tiers apply only to purchase and construction loans. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
- 03Can I finance the VA funding fee into my loan?
Yes, you generally have the option to finance the VA funding fee into your loan amount. This means the fee is added to your principal balance, and you pay it off over the life of your mortgage. This can reduce your out-of-pocket expenses at closing.
- 04Who is exempt from paying the VA funding fee?
Borrowers are exempt if they are receiving or entitled to receive VA compensation for a service-connected disability, rated eligible for VA compensation due to a pre-discharge exam, are active-duty Purple Heart recipients, or are qualifying surviving spouses receiving Dependency and Indemnity Compensation (DIC). Your Certificate of Eligibility (COE) indicates your exemption status.
- 05Do I pay a funding fee on a VA IRRRL (Streamline Refinance)?
Yes, unless you are exempt, an Interest Rate Reduction Refinance Loan (IRRRL) typically has a funding fee of 0.50%. This is a fixed percentage regardless of prior VA loan usage or loan-to-value. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
- 06What happens if I get a service-connected disability rating after closing my loan?
If you are granted a service-connected disability rating by the VA after your loan has closed and you paid the funding fee, you may be eligible for a refund of the funding fee. You would need to contact the VA to initiate this process.
- 07Does the funding fee for a VA cash-out refinance depend on my equity?
No, for a VA cash-out refinance, the funding fee is a flat 2.15% for your first use and 3.30% for subsequent uses, regardless of the amount of equity you have in your home or your loan-to-value ratio. This differs from purchase loans, where down payment tiers affect the fee. For more on this, see VA cash-out refinance loans. (Source: U.S. Department of Veterans Affairs, VA funding fee and closing costs.)
- 08How can I get a personalized estimate of my VA funding fee?
You can use our VA funding fee calculator to get a personalized estimate based on your specific loan type, use, and down payment. This can help you plan for your overall loan costs.
