Quick answer: The VA funding fee in 2026 is 2.15% of the loan amount for first-time use with less than 5% down (3.3% for subsequent use), dropping to 1.5% with 5% down and 1.25% with 10% down. A streamline refinance (IRRRL) is just 0.5% — and veterans receiving VA disability compensation pay nothing at all.
The funding fee is the one real cost of the VA loan program — and the most misunderstood. Here are the current rates (the April 2023 reduction is still in effect), exactly who is exempt, and how the fee compares to what FHA and conventional borrowers pay instead.
Key takeaways
- Purchase loans: 2.15% first use / 3.3% subsequent use with less than 5% down; 1.5% with 5–9.99% down; 1.25% with 10%+ down (VA schedule effective April 7, 2023 — still current).
- The fee is one-time and almost always financed into the loan — VA loans have no monthly mortgage insurance.
- Exempt: veterans receiving VA disability compensation, those eligible but taking retirement pay, active-duty Purple Heart recipients, and surviving spouses receiving DIC.
- An IRRRL streamline refinance carries just a 0.5% fee — one reason VA-to-VA refinances price so well.
What is the VA funding fee?
The funding fee is a one-time charge that funds the VA loan guarantee, replacing monthly mortgage insurance entirely. Because the VA insures lenders against loss, eligible veterans and service members can buy with zero down and no monthly mortgage insurance — the funding fee is what keeps that engine running. Most borrowers roll it into the loan rather than paying cash at closing; a seller can also pay it as part of negotiated concessions.
VA funding fee rates in 2026
The reduced schedule that took effect April 7, 2023 is still current. For purchase and construction loans:
Want the whole schedule on one screen with the math already done? Our VA funding fee chart and calculator runs your loan amount against every tier and shows what financing the fee does to the balance.
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to 9.99% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
| Transaction | First use | Subsequent use |
|---|---|---|
| Cash-out refinance | 2.15% | 3.3% |
| IRRRL (streamline refinance) | 0.5% | 0.5% |
| Loan assumption | 0.5% | 0.5% |
First-time use, $400,000 purchase, zero down:
$400,000 × 2.15% = $8,600 funding fee — financed, for a total loan of $408,600
Same loan with 10% down ($40,000): $360,000 × 1.25% = $4,500. Actual figures depend on your loan; they become real on your Loan Estimate.
Who is exempt from the funding fee?
Roughly one in three VA borrowers pays no funding fee at all. You are exempt if you are:
- A veteran receiving VA disability compensation for a service-connected disability
- A veteran eligible for compensation but receiving retirement or active-duty pay instead
- A surviving spouse receiving Dependency and Indemnity Compensation (DIC)
- An active-duty service member with a Purple Heart
Valley West takeThe exemption detail we see missed most: if your disability claim is approved after closing with an effective date before it, you can be owed a refund of the entire fee. If you closed a VA loan while a claim was pending, check — that's real money sitting with the VA. We verify exemption status on your Certificate of Eligibility before locking anything, so nobody pays a fee they don't owe.
How the VA fee compares to FHA and conventional
One-time vs. monthly is the whole story. FHA charges 1.75% upfront plus 0.55% every year (see our full FHA mortgage insurance guide); conventional loans under 20% down carry monthly PMI priced by credit score. A VA borrower pays the funding fee once and never sees a mortgage insurance line on the statement — which is why, for eligible veterans, VA is usually the lowest total monthly payment on the board.
| VA | FHA | Conventional <20% down | |
|---|---|---|---|
| Upfront | 1.25%–3.3% once (many exempt) | 1.75% UFMIP | None |
| Monthly | None | 0.55%/yr (most loans) | PMI, priced by credit |
| Minimum down | 0% | 3.5% | 3% |
Check your VA eligibility and real numbers.
We pull your Certificate of Eligibility, verify any funding fee exemption, and price your VA loan across our full program range. Las Vegas based, licensed in 32+ states.
Get your fast quoteVA funding fee FAQ
How much is the VA funding fee in 2026?
2.15% for first use with less than 5% down, 3.3% for subsequent use, 1.5% with 5–9.99% down, 1.25% with 10%+ down. IRRRLs are 0.5%. The April 2023 schedule remains in effect.
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation, those eligible but taking retirement or active-duty pay instead, surviving spouses receiving DIC, and active-duty Purple Heart recipients.
Can the fee be financed into the loan?
Yes — most borrowers roll it in. It can also be paid in cash or by the seller as a concession.
Does the funding fee replace mortgage insurance?
Effectively yes. VA loans carry no monthly mortgage insurance; the one-time fee is the program's substitute for it.
Can I get the fee refunded?
If a disability claim is approved with an effective date before your closing date, you may be owed a full refund of the fee you paid. Ask your lender or VA regional loan center.
The bottom line
The funding fee is what pays for the program’s defining features: zero down payment and no monthly mortgage insurance. Verify your exemption status first — a third of borrowers owe nothing — then compare the one-time fee against years of FHA MIP or PMI. For most eligible veterans, that math isn't close.
Sources
- VA — Funding fee and loan closing costs (current rate schedule): va.gov
- VA Circular 26-23-06 — Funding fee rate change effective April 7, 2023: benefits.va.gov
Across Valley West: For everything else VA, visit our dedicated site: VAHomeLoans.services.
Keep reading
Last updated: July 17, 2026 — fully rewritten with the current VA fee schedule (April 2023 rates, verified still in effect) and exemption rules.
