Costs
VA funding fee 2026: chart, exemptions and calculator
Short answer
The VA funding fee is a one-time charge on most VA loans. In 2026 it is 2.15% of the loan amount for a first-time VA purchase with less than 5% down, 1.5% with 5% down, and 1.25% with 10% down. Later use with under 5% down is 3.3%. An IRRRL is 0.5%. You pay nothing if you receive VA disability compensation, and you can roll the fee into the loan.
Funding fee calculator
Purchase and construction loans
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
The fee is a percentage of the loan amount, not the price. VA’s own example: a first-time buyer pays $10,000 down on a $200,000 home, borrows $190,000, and pays a 1.5% fee of $2,850.
The same chart applies to veterans, active-duty service members, and National Guard and Reserve members. VA sets no separate Guard or Reserve rate.
Refinances and other loans
| Loan type | Funding fee |
|---|---|
| Cash-out refinance, first use | 2.15% |
| Cash-out refinance, after first use | 3.3% |
| Interest rate reduction refinance (IRRRL) | 0.5% |
| Loan assumption | 0.5% |
| Manufactured home, not permanently affixed | 1% |
| Native American Direct Loan, purchase / refinance | 1.25% / 0.5% |
| Vendee loan (VA-acquired property) | 2.25% |
A bill in Congress, H.R. 6047, would raise the IRRRL fee to about 1.4% and the assumption fee to 1%. It passed the House in May 2026 and has sat in the Senate Veterans’ Affairs Committee since June 2, 2026. It is not law as of October 28, 2026. Read the update.
What does the funding fee cost on a refinance or assumption?
Cash-out refinances use the purchase rates for no money down, so they cost far more than a streamline refinance. These examples use round balances for a Chicago home.
| Scenario | Loan amount | Rate | Funding fee |
|---|---|---|---|
| IRRRL on a $380,000 balance | $380,000 | 0.5% | $1,900 |
| Cash-out refinance to $400,000, first use | $400,000 | 2.15% | $8,600 |
| Cash-out refinance to $400,000, after first use | $400,000 | 3.3% | $13,200 |
| Assuming a seller’s $300,000 VA loan | $300,000 | 0.5% | $1,500 |
| Any of the above, receiving VA disability compensation | — | 0% | $0 |
Compare the options on our refinance page, which includes an IRRRL break-even calculator, and see how a buyer takes over a seller’s loan on the VA loan assumption page.
Worked examples on a $400,000 Chicago home
| Scenario | Loan amount | Rate | Funding fee |
|---|---|---|---|
| First use, $0 down | $400,000 | 2.15% | $8,600 |
| First use, 5% down ($20,000) | $380,000 | 1.5% | $5,700 |
| First use, 10% down ($40,000) | $360,000 | 1.25% | $4,500 |
| After first use, $0 down | $400,000 | 3.3% | $13,200 |
| Receiving VA disability compensation | $400,000 | 0% | $0 |
Putting 5% down saves $2,900 in funding fee on this home, but costs $20,000 in cash. Most buyers keep the cash and finance the fee.
How much is the funding fee on a Chicago condo, house or two-flat?
The table compares the three most common situations at three example prices. The prices are round illustrations, not market data. Fees are rounded to the dollar.
| Example purchase | First use, $0 down (2.15%) | After first use, $0 down (3.3%) | Either use, 5% down (1.5%) |
|---|---|---|---|
| $250,000 condo | $5,375 | $8,250 | $3,563 |
| $400,000 single-family home | $8,600 | $13,200 | $5,700 |
| $600,000 two-flat | $12,900 | $19,800 | $8,550 |
A second-time user who can put 5% down pays the same 1.5% as a first-time user, so a down payment matters most after first use. On the $600,000 two-flat, 5% down ($30,000) cuts the fee from $19,800 to $8,550. Condo buildings and two- to four-unit buildings have their own VA rules: see our condo guide and multi-unit guide.
Three ways to pay it
- Finance it: add it to the loan. On a $400,000 first-use loan that makes the balance $408,600. This is the most common choice.
- Pay cash at closing: lowers your balance and monthly payment slightly.
- Ask the seller: a seller can pay it, but it counts toward VA’s 4% seller concession cap. How the 4% rule works.
Funding fee vs. FHA mortgage insurance
On the same $400,000 home, an FHA buyer puts $14,000 down (3.5%), pays an upfront premium of about $6,755 (1.75% of $386,000) and an annual premium of about 0.55%, roughly $177 a month. Over five years that is about $17,400 in mortgage insurance, compared with a one-time $8,600 VA funding fee and no monthly insurance. VA vs. FHA in full.
Who does not pay the funding fee
- Veterans receiving VA compensation for a service-connected disability
- Veterans eligible for that compensation who receive retirement or active-duty pay instead
- Surviving spouses receiving Dependency and Indemnity Compensation
- Service members with a proposed or memorandum rating, issued before closing, from a pre-discharge claim
- Active-duty Purple Heart recipients who show proof on or before closing
See everything that stacks with the exemption on our disabled veterans page.
Refunds
If VA later awards you disability compensation with an effective date before your closing date, you may be due a refund of the fee you paid. A proposed or memorandum rating issued after closing does not qualify for a refund. To ask about one, call your VA regional loan center. How a funding fee refund works.
Common questions
How much is the VA funding fee in 2026?
For a first-use purchase with less than 5% down it is 2.15% of the loan amount. It falls to 1.5% with 5% down and 1.25% with 10% down. Later use with less than 5% down is 3.3%. IRRRLs are 0.5%.
Who is exempt from the VA funding fee?
Veterans who receive or are eligible for VA disability compensation, surviving spouses receiving DIC, service members with a pre-discharge rating issued before closing, and active-duty Purple Heart recipients.
Can I finance the VA funding fee?
Yes. You can add it to your loan amount. On a purchase loan it is the only closing cost VA lets you finance.
Can the seller pay my VA funding fee?
Yes. A seller credit toward the funding fee counts as a seller concession, which VA caps at 4% of the home's reasonable value.
Is the VA funding fee worth putting 5% down to avoid?
Usually not. On a $400,000 home, 5% down cuts the fee from $8,600 to $5,700, saving $2,900, but requires $20,000 in cash.
Does the VA funding fee apply to the purchase price or the loan amount?
The loan amount. With a down payment, the fee is charged only on what you borrow.
Do National Guard and Reserve members pay a higher VA funding fee?
No. VA's current chart lists National Guard and Reserve members with veterans and active-duty members at the same rates: 2.15% on a first-use purchase with less than 5% down.
How do I ask VA about a funding fee refund?
Call your VA regional loan center. You may qualify if VA awards you disability compensation with an effective date before your closing date. A rating issued after closing from a pre-discharge claim does not qualify.
Sources
An independent guide. Not affiliated with or endorsed by the U.S. Department of Veterans Affairs, and not a lender. General information, not legal, tax or financial advice.