VA Loan Funding Fee 2026: Chart, Rates & Exemptions
The VA loan funding fee is a one-time charge paid to the Department of Veterans Affairs to help keep the VA home loan program running at no cost to taxpayers. For most first-time users putting zero down in 2026, the va loan funding fee is 2.15% of the loan amount. Veterans with service-connected disabilities are fully exempt, and the fee can be rolled into your loan instead of paid in cash at closing.
Why the VA Funding Fee Matters in 2026
If you're using your VA home loan benefit, the funding fee is the single biggest line item you'll see at closing. It isn't a bank fee, and it isn't a tax. It's a payment to the VA that keeps the program self-sustaining, which is why VA purchase and refinance loans can offer zero down payment and no private mortgage insurance.
Here in New Hampshire, where the 2026 median home price sits well above $450,000, that fee can add $8,000 to $15,000 to a veteran's closing costs if they don't plan for it. The good news: many borrowers qualify for a full exemption, and almost everyone can finance the fee into their loan balance. Knowing the rules before you make an offer can save you thousands.
How Much Is the VA Funding Fee?
The VA funding fee is a percentage of your loan amount, not your purchase price. The exact rate depends on three factors: whether it's your first time using a VA loan, how much you're putting down, and the type of loan (purchase, cash-out refinance, or IRRRL).
For a first-time VA loan user buying a $400,000 home with zero down in 2026, the funding fee is 2.15% of $400,000, which comes to $8,600. That amount can either be paid in cash at closing or financed into the mortgage.
First-time users versus subsequent users
Subsequent users (veterans who've tapped their VA benefit before) pay a higher rate if they put down less than 5%. The fee jumps from 2.15% to 3.30% on zero-down loans. Putting 5% or more down drops the fee significantly for both first-time and repeat users, and the fee is identical for both groups once you cross that 5% threshold.
Refinance fees are different
An Interest Rate Reduction Refinance Loan (IRRRL), often called a VA Streamline, carries a flat funding fee of 0.50%. That makes it one of the cheapest refinance options on the market. VA cash-out refinances, on the other hand, carry the same rates as a purchase loan.
Rates are set by Congress and can change. Verify current figures at VA.gov or speak with your loan officer before closing.
VA Funding Fee Chart for 2026
Here's the complete va funding fee chart as of 2026 for purchase and construction loans:
First-time use:
Down payment less than 5%: 2.15%
Down payment 5% to 9.99%: 1.50%
Down payment 10% or more: 1.25%
Subsequent use:
Down payment less than 5%: 3.30%
Down payment 5% to 9.99%: 1.50%
Down payment 10% or more: 1.25%
Refinance:
VA IRRRL (Streamline Refinance): 0.50%
Cash-out refinance, first use: 2.15%
Cash-out refinance, subsequent use: 3.30%
A few things worth knowing. Reservists and National Guard members pay the same rates as regular military as of 2020, following the Blue Water Navy Vietnam Veterans Act. The fee applies to the loan amount after any down payment, not the home's purchase price. And if you choose to finance the fee, it's added to your loan balance and spread across the life of the mortgage, which slightly raises your monthly payment and total interest paid.
(Always confirm the current chart at VA.gov before closing, since Congress can adjust these figures.)
Who Qualifies for a VA Funding Fee Exemption?
This is the section every veteran should read twice, because a surprising number of borrowers pay the fee when they don't have to. The VA fully waives the va funding fee exemption rules for several categories of borrowers.
You're exempt if any of the following apply:
You receive VA disability compensation for a service-connected disability
You're eligible for VA disability compensation but receive retirement or active-duty pay instead
You're a surviving spouse of a veteran who died in service or from a service-connected disability
You're an active-duty service member who received a Purple Heart before your loan closes
You have a proposed or memorandum rating of a compensable service-connected disability issued before your loan closes
If you have a disability claim pending right now, talk to your loan officer before closing. In many cases you can delay closing a few days to secure a memorandum rating, which saves thousands.
What if I already paid the fee and later received a disability rating?
You may be eligible for a refund, retroactive to the effective date the VA determined your disability began. Contact the VA Regional Loan Center or your lender to start the refund process. NextGen Mortgage Loans helps former clients file for this refund at no cost.
How NextGen Mortgage Can Help
VA loans are our specialty. NextGen Mortgage Loans originates VA purchase and refinance loans across New Hampshire, Massachusetts, Maine, and Florida, and we review every file with a human underwriter rather than relying on algorithm-only decisions. That matters for veterans with non-traditional income, recent PCS moves, or disability claims in process.
We also run a 14-day closing timeline for most VA purchases, which is a real advantage when you're competing for a home or trying to lock a rate in a volatile market. If you're eligible for a funding fee exemption, we'll confirm it and pull the paperwork for you before you sign anything.
Ready to run the numbers on your specific scenario? Apply online or schedule a strategy call with a licensed VA loan specialist.
This content is for educational purposes only and does not constitute financial advice. Loan programs, rates, and eligibility requirements are subject to change. NextGen Mortgage Loans is licensed in NH (NMLS# 1621958), MA (MB1621958), ME (1621958), and FL (MBR4542), RI #20265029LB.. Contact a licensed loan officer to discuss your specific situation.
Frequently Asked Questions
How much is the VA funding fee in 2026?
For most first-time VA loan users putting zero down, the 2026 funding fee is 2.15% of the loan amount. Subsequent users pay 3.30% on zero-down loans. The fee drops to 1.50% with 5% to 9.99% down and 1.25% with 10% or more down, regardless of whether it's your first use.
Can the VA funding fee be waived?
Yes. Veterans receiving VA disability compensation, those eligible for compensation but receiving retirement pay instead, surviving spouses of veterans who died in service or from service-connected causes, and Purple Heart recipients on active duty are exempt. Your Certificate of Eligibility or disability award letter confirms the waiver before closing.
Can I roll the VA funding fee into my loan?
Yes. The VA funding fee can be financed into your loan balance rather than paid in cash at closing, and most veterans choose this route. Financing the fee raises your monthly payment slightly and increases the total interest paid over the life of the loan, but it keeps more cash in your pocket on closing day.
Do I pay the VA funding fee on a refinance?
It depends on the refinance type. A VA IRRRL (Interest Rate Reduction Refinance Loan) carries a 0.50% funding fee. A VA cash-out refinance carries the same 2.15% (first use) or 3.30% (subsequent use) as a purchase loan. Exempt borrowers pay zero on either refinance.
Is the VA funding fee tax deductible?
Historically the VA funding fee has been deductible in the year paid when itemizing, but tax law changes frequently. Confirm current treatment with a licensed tax professional before filing your return.
The Bottom Line
The VA funding fee is the trade-off for a loan with no down payment and no PMI, and for most veterans it's worth every penny. Confirm your exemption status, run the numbers with and without financing the fee, and compare the math against FHA and conventional options before locking in. Ready to see your exact fee? Get a free VA loan quote from NextGen Mortgage Loans.
