Because VA loans never charge monthly mortgage insurance, the funding fee is what keeps the guaranty program self-sustaining. It's a one-time charge — not a recurring cost — and unlike mortgage insurance, it disappears from your file the moment it's paid or financed. Here is the complete 2026 chart.
Purchase and construction loans
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% – 9.99% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
Remember: down payment is optional on a VA loan. These tiers exist because putting money down lowers the fee — they are not evidence that a down payment is required. A veteran with full entitlement can close with $0 down at the "less than 5%" fee tier and still owe no monthly mortgage insurance.
Refinances and other loan types
| Loan type | Funding fee |
|---|---|
| Cash-out refinance, first use | 2.15% |
| Cash-out refinance, subsequent use | 3.30% |
| IRRRL (streamline refinance) | 0.50%, every time |
| Native American Direct Loan (NADL), purchase | 1.25% |
| NADL, IRRRL | 0.50% |
| Loan assumption | 0.50% |
Financing the fee
The funding fee can be paid in cash at closing or rolled into the loan amount, which is what most veterans do. Financing it means you pay interest on the fee over the life of the loan but keep more cash available at closing.
Who pays $0 — the exemption list
The funding fee is waived entirely for:
- Veterans receiving VA compensation for a service-connected disability.
- Veterans who would be entitled to compensation but are receiving retirement or active-duty pay instead.
- Veterans rated eligible for compensation based on a pre-discharge exam or review.
- Active-duty Purple Heart recipients (evidence required before closing).
- Surviving spouses of veterans who died in service or from a service-connected disability, or who are receiving Dependency and Indemnity Compensation (DIC).
Your Certificate of Eligibility is what confirms the exemption to your lender — see our COE guide for how to request one. If a disability rating comes through after you've already closed and paid the fee, you may be entitled to a refund.
Worked example
A first-time VA buyer financing $400,000 with $0 down pays a 2.15% funding fee: $8,600, financed into the loan for a total loan amount of $408,600. The same veteran, if exempt due to a service-connected disability rating, pays $0 — no fee, no MIP-equivalent, ever.
Sources: VA Funding Fee and Closing Costs — va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/; 38 CFR Part 36; VA Lenders Handbook M26-7.