Run your numbers
Estimate only, not an offer or a quote. The fee applies to the loan amount, not the home price. Rates from the VA funding fee rate charts (effective April 7, 2023, unchanged as of August 2026). Confirm your rate and exemption status at va.gov and with your lender.
What the VA funding fee is
The VA funding fee is a one-time charge on most VA-backed home loans, ranging from 0.5% to 3.3% of the loan amount in 2026. It applies to the loan amount, not the home price, and most borrowers can finance it into the loan instead of paying cash at closing. Per VA, the fee "helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn't require down payments or monthly mortgage insurance."
The official rate chart
Purchase and construction loans (fee applies to the loan amount):
| DOWN PAYMENT | FIRST USE | AFTER FIRST USE |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to 9.99% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Refinance loans (down payment doesn't change these rates):
| LOAN TYPE | FIRST USE | AFTER FIRST USE |
|---|---|---|
| Cash-out refinance | 2.15% | 3.3% |
| IRRRL (streamline) | 0.5% | 0.5% |
Straight talk: the difference between tiers is real money. On a $400,000 loan, first use with nothing down is $8,600; subsequent use with nothing down is $13,200; and 5% down cuts either one to 1.5%. If you're a repeat user, the down-payment math deserves a hard look. Source: VA funding fee rate charts at va.gov. A few less common loan types (like non-permanently-affixed manufactured homes and loan assumptions) have their own rates on the same VA page.
What it costs in dollars
The fee on common loan amounts, with nothing down (fee applies to the loan amount; rates from the VA chart above):
| LOAN AMOUNT | FIRST USE (2.15%) | AFTER FIRST USE (3.3%) | IRRRL (0.5%) |
|---|---|---|---|
| $250,000 | $5,375 | $8,250 | $1,250 |
| $300,000 | $6,450 | $9,900 | $1,500 |
| $400,000 | $8,600 | $13,200 | $2,000 |
| $500,000 | $10,750 | $16,500 | $2,500 |
Putting 5% down drops the purchase fee to 1.5% and 10% down drops it to 1.25%, first use or not. Run your exact numbers in the calculator above.
Who doesn't pay it
Per VA, you're exempt from the funding fee if you're receiving VA compensation for a service-connected disability (or entitled to it but receiving retirement or active-duty pay instead), you're a surviving spouse receiving DIC, you have a proposed or memorandum rating before closing from a pre-discharge claim, or you're an active-duty member who provides evidence of a Purple Heart on or before closing. The Purple Heart exemption applies while on active duty only; a separated veteran with a Purple Heart qualifies through the disability-compensation categories, not the medal alone. Your lender verifies exemption through your Certificate of Eligibility. According to VA, more than half of veterans who obtained a VA-guaranteed home loan since 2021 were exempt.
If your disability claim is still pending at closing, you generally pay the fee upfront; if VA later awards compensation with an effective date before your closing date, you can seek a refund. Confirm the specifics with VA and your lender.
Quick answers
Did the VA funding fee change for 2026?
No. The rate chart that took effect April 7, 2023 is still in effect as of August 2026: 2.15% first use and 3.3% after first use with less than 5% down, 1.5% with 5% to 9.99% down, 1.25% with 10% or more down, and a flat 0.5% for the IRRRL. Current charts are on the VA funding fee page.
Can the fee be rolled into the loan?
Yes. VA gives two options: finance the fee in the loan and pay it off over time, or pay it in full at closing. One detail many pages miss: on a purchase loan, the funding fee is the only closing cost VA allows you to finance; the rest are due at closing. Financing it means no cash due for the fee now, but you pay interest on that amount for the life of the loan.
How do refunds work?
If VA later awards you compensation for a service-connected disability with an effective date before your loan closing, you may qualify for a refund of the fee you paid. Refund requests go through your VA regional loan center (contact information is on the VA funding fee page). A proposed or memorandum rating received after closing does not qualify for a refund.
Is the funding fee tax deductible?
For tax year 2025, IRS Publication 936 lists VA funding fees among loan service charges that cannot be deducted as points, and the separate itemized deduction for mortgage insurance premiums is listed as expired. Tax law changes year to year: check the current year's IRS Publication 936 or ask a tax professional before filing.
Keep going
The funding fee is one line of the bigger decision. These free StandWatch pages cover the rest: