VA Funding Fee in 2026: Chart, Exemptions and How to Lower It

The VA funding fee is a one time charge on most VA loans. It goes to the VA, not the lender, and it's what keeps the program running with zero down and no monthly mortgage insurance. The good news: plenty of veterans pay nothing at all, and almost everyone can lower it.

The current VA funding fee chart

These rates took effect April 7, 2023 and are still in place for 2026.

Loan type	First use	After first use
Purchase, less than 5% down	2.15%	3.3%
Purchase, 5% to 9.99% down	1.5%	1.5%
Purchase, 10% or more down	1.25%	1.25%
Cash out refinance	2.15%	3.3%
Streamline refinance (IRRRL)	0.5%	0.5%

Example: a $700,000 purchase with zero down on your first VA loan has a funding fee of 2.15%, or $15,050. Most people roll it into the loan instead of paying cash.

Who doesn't pay a funding fee

• Veterans receiving VA compensation for a service connected disability
• Veterans eligible for disability compensation who are receiving retirement or active duty pay instead
• Active duty service members who have received a Purple Heart
• Surviving spouses receiving Dependency and Indemnity Compensation
• Service members with a proposed or memorandum disability rating before discharge

Your Certificate of Eligibility shows whether you're exempt. I pull it for you at the start, so we know before you make an offer.

What if my disability claim is still pending?

You may pay the fee at closing and get it back later. If the VA awards a rating with an effective date before your closing, you can request a refund of the funding fee. Keep your closing paperwork in a safe place.

Ways to lower the fee

Put 5% down. On a first use purchase, going from zero to 5% down drops the fee from 2.15% to 1.5%. On a subsequent use, it drops from 3.3% to 1.5%, which is a big jump.

Ask the seller. The funding fee can be paid by the seller as part of a concession. VA caps most seller concessions at 4% of the price, and the funding fee counts toward that.

Refinance the right way. If you already have a VA loan and rates drop, a streamline refinance has a 0.5% fee instead of 2.15% or more on a cash out.

Use your first use benefit wisely. If you think you'll buy again with a VA loan later, a little down payment on the second loan saves a lot on the 3.3% subsequent use fee.

Is the funding fee worth it?

Usually, yes. Compare it to a conventional loan with less than 20% down, where you'd pay private mortgage insurance every month for years. On most VA loans the one time fee costs less over time than monthly PMI, and you keep your cash.

Sources: VA.gov: VA funding fee and loan closing costs. General information, not legal or tax advice. Program rules can change.