VA Loan Funding Fee in 2026: Rates, Exemptions & Calculator
The VA loan funding fee in 2026 is a one-time charge that applies to most VA-backed home loans. For a purchase or construction loan with less than 5% down, the funding fee is 2.15% for first-time VA loan use and 3.30% for subsequent use. Borrowers who qualify for a VA funding fee exemption pay 0%.
You can generally either pay the funding fee at closing or finance it into your VA loan balance. The exact amount depends on your loan amount, down payment, loan type, previous use of your VA home loan benefit, and exemption status.
Understanding the fee before you make an offer can help you estimate your total loan amount more accurately and determine whether paying the fee upfront or financing it makes more sense for your situation.
What Is the VA Funding Fee?
The VA funding fee is a one-time payment associated with most VA-backed and VA direct home loans.
It is not the same as a lender origination fee, property tax, or monthly mortgage insurance premium. The funding fee helps reduce the cost of the VA home loan program to taxpayers while allowing eligible borrowers to access major VA loan benefits, including the possibility of buying a home with no required down payment and no monthly private mortgage insurance.
The Department of Veterans Affairs calculates the funding fee as a percentage of the loan amount, not simply the home's purchase price.
For example, a first-time VA borrower financing $400,000 with less than 5% down would generally have a 2.15% funding fee:
$400,000 × 2.15% = $8,600
If the borrower finances the entire funding fee, the starting loan balance would increase to approximately $408,600, before accounting for any other applicable loan details.
Want to estimate the numbers for your own loan? Use the VA Loan Mortgage Calculator to calculate your estimated VA mortgage scenario.
VA Funding Fee Chart for 2026
The following VA funding fee percentages apply to VA-backed purchase and construction loans in 2026.
Down Payment | First VA Loan Use | Subsequent VA Loan Use |
|---|---|---|
Less than 5% | 2.15% | 3.30% |
5% to 9.99% | 1.50% | 1.50% |
10% or more | 1.25% | 1.25% |
One important distinction is that once the borrower makes a down payment of at least 5%, the funding fee is the same for first and subsequent VA loan use.
National Guard and Reserve borrowers also use the same funding fee schedule as other eligible Veterans and service members under the current rules.
If you're comparing funding-fee costs with the broader benefits and requirements of the program, see our complete VA loan guide.
VA Refinance Funding Fees in 2026
VA refinance funding fees work differently from purchase-loan fees.
VA Refinance Type | Funding Fee |
|---|---|
VA IRRRL / Streamline Refinance | 0.50% |
VA Cash-Out Refinance — First Use | 2.15% |
VA Cash-Out Refinance — Subsequent Use | 3.30% |
A VA Interest Rate Reduction Refinance Loan (IRRRL) carries a 0.50% funding fee regardless of whether it is your first or subsequent use.
A VA cash-out refinance generally carries a 2.15% funding fee for first use or 3.30% for subsequent use.
If you're considering refinancing an existing VA mortgage, explore our refinance loan options or read our guide to VA IRRRL Streamline Refinancing.
How Is the VA Funding Fee Calculated?
The basic formula is:
VA Funding Fee = Loan Amount × Funding Fee Percentage
The percentage depends primarily on the loan type, down payment, whether you've previously used your VA home loan benefit, and whether you qualify for an exemption.
Example: First VA Loan With Zero Down
Loan amount: $400,000
Funding fee rate: 2.15%
Funding fee:
$400,000 × 0.0215 = $8,600
Example: Subsequent VA Loan With Zero Down
Loan amount: $400,000
Funding fee rate: 3.30%
Funding fee:
$400,000 × 0.033 = $13,200
That's a $4,600 difference simply based on first versus subsequent use.
Example: VA Loan With 5% Down
Suppose you're buying a $400,000 home and make a $20,000 down payment.
Base loan amount: $380,000
Applicable funding fee rate: 1.50%
Funding fee:
$380,000 × 0.015 = $5,700
Because the funding fee applies to the loan amount rather than the full purchase price, both the down payment and reduced percentage affect the total fee.
For a more complete estimate, calculate your VA mortgage payment and funding fee.
Is the VA Funding Fee Based on the Purchase Price or Loan Amount?
The VA funding fee is based on your loan amount, not the home's full purchase price.
If you purchase a $500,000 home with a $50,000 down payment, for example, the funding fee would generally be calculated from the resulting loan amount rather than the original $500,000 purchase price.
The size of the down payment also determines which funding-fee percentage applies to purchase and construction loans.
This is one reason it can be useful to compare multiple down-payment scenarios before making a final decision.
If you're still determining your target purchase price, use the VA Loan Affordability Calculator.
Who Is Exempt From the VA Funding Fee?
Some VA borrowers do not have to pay a funding fee at all.
Under current VA rules, you may qualify for a VA funding fee exemption if you are receiving VA compensation for a service-connected disability, are eligible for that compensation but receive retirement or active-duty pay instead, receive qualifying Dependency and Indemnity Compensation as a surviving spouse, received a qualifying proposed or memorandum disability rating before closing, or are an active-duty member of the Armed Forces who provides evidence of receiving a Purple Heart on or before closing.
The VA determines exemption eligibility, so your lender should verify your funding-fee status before the loan closes.
An exemption can make a significant difference. On a $400,000 first-use VA loan with less than 5% down, qualifying for an exemption could eliminate an $8,600 funding fee.
If you're planning to use your VA benefit soon, speak with the NextGen Mortgage team to review your VA loan scenario and exemption status.
What Happens If My VA Disability Claim Is Still Pending?
A pending disability claim deserves extra attention before you close.
If you receive an eligible proposed or memorandum rating before closing, you may qualify to avoid paying the funding fee.
If you pay the funding fee and are later awarded VA compensation for a service-connected disability, you may qualify for a refund when the effective date of the compensation is retroactive to a date before your loan closing.
A proposed or memorandum rating received only after closing does not, by itself, qualify you for a funding-fee refund.
If you have a pending disability claim, tell your loan officer early in the process so your exemption status can be reviewed before closing.
Can You Roll the VA Funding Fee Into the Loan?
Yes.
Most VA borrowers can choose either to pay the funding fee in full at closing or finance the funding fee into the mortgage.
For example, if your base VA loan is $400,000 and your funding fee is $8,600, financing the fee could produce a starting loan balance of approximately $408,600.
Financing the fee can reduce the amount of cash you need on closing day, but it also means you're borrowing more money and may pay interest on the financed fee over time.
Importantly, on a standard VA purchase or construction loan, the funding fee is generally the only closing cost that can simply be financed into the loan in this manner. Other closing expenses normally need to be handled separately.
Can the Seller Pay the VA Funding Fee?
Yes. A seller or builder can potentially cover the VA funding fee as part of the transaction.
VA rules allow seller concessions to include items such as payment of the buyer's VA funding fee. Seller concessions are subject to VA limitations, including a general limit of 4% of the home's reasonable value for concessions.
This can be especially valuable when negotiating an offer because it may allow an eligible Veteran to preserve more cash while avoiding financing the funding fee into the mortgage.
For a broader explanation of purchase expenses, see our guide to closing costs when buying a home in New Hampshire.
Is the VA Funding Fee Tax Deductible in 2026?
Tax treatment has changed over time, so older articles about VA funding-fee deductions may now be outdated.
In 2026, eligible Veterans, service members, and surviving spouses may be able to deduct VA funding fees under current tax law when purchasing a home with a VA-guaranteed loan. Individual tax treatment depends on the borrower's circumstances and applicable tax rules.
Because mortgage-related tax rules can be complex, speak with a qualified tax professional before relying on the deduction for your personal return.
How the VA Funding Fee Affects New Hampshire Homebuyers
For Veterans and active-duty borrowers buying in New Hampshire, the funding fee should be considered early in the homebuying process rather than treated as a last-minute closing expense.
A higher loan amount means a larger dollar-value funding fee even when the percentage stays exactly the same.
For example, at the 2.15% first-use rate:
Base VA Loan | Estimated Funding Fee |
|---|---|
$350,000 | $7,525 |
$450,000 | $9,675 |
$550,000 | $11,825 |
$650,000 | $13,975 |
That does not necessarily mean you'll need to bring that amount to closing. You may qualify for an exemption, finance the fee into the loan, or structure the transaction differently based on your circumstances.
Veterans purchasing locally can explore our New Hampshire mortgage options and home purchase loan programs.
Should You Pay the VA Funding Fee Upfront or Finance It?
There isn't one correct choice for every borrower.
Paying the fee upfront keeps your mortgage balance lower and avoids paying interest on the financed fee.
Financing it preserves more cash at closing, which may be useful for moving expenses, reserves, repairs, furnishings, or simply maintaining an emergency fund.
Your best option depends on your available cash, interest rate, expected time in the home, overall monthly payment, and financial priorities.
Before making that decision, run both scenarios with the VA Loan Mortgage Calculator.
You can also use the VA Loan DTI Calculator to see how your estimated housing payment fits into your broader qualification scenario.
How NextGen Mortgage Loans Can Help
Understanding the funding fee is only one part of structuring a VA mortgage correctly.
NextGen Mortgage Loans helps borrowers evaluate VA purchase and refinance scenarios, including funding-fee exemptions, zero-down financing, previous VA benefit use, disability claims in process, non-traditional income, and refinancing options.
Our team can review your Certificate of Eligibility and available documentation to help determine how the funding fee may apply before you reach closing.
If you're still researching, start with our VA loan program guide.
If you already have a target home price, calculate your estimated VA mortgage.
If you're ready to move forward, apply for a VA loan online or schedule a conversation with NextGen Mortgage Loans.
Frequently Asked Questions
How much is the VA funding fee in 2026?
For a VA purchase or construction loan with less than 5% down, the 2026 funding fee is generally 2.15% for first use and 3.30% for subsequent use. With 5% to 9.99% down, the fee is 1.50%. With 10% or more down, it is 1.25%. Eligible exempt borrowers pay no funding fee.
What is the VA funding fee on a $400,000 loan?
A first-time VA borrower with less than 5% down would generally pay $8,600, which is 2.15% of a $400,000 base loan. A subsequent-use borrower at 3.30% would generally pay $13,200.
Can the VA funding fee be waived?
Yes. Certain borrowers are exempt, including qualifying Veterans receiving or eligible for VA disability compensation, certain surviving spouses, qualifying service members with pre-discharge disability ratings, and active-duty Purple Heart recipients.
Can I roll the VA funding fee into my loan?
Yes. The VA generally allows the funding fee to be financed into the mortgage rather than paid entirely in cash at closing.
Do disabled Veterans pay the VA funding fee?
Many Veterans with service-connected disabilities are exempt, but the exemption is based on VA compensation eligibility and the specific VA rules that apply to the borrower. Your lender should verify your official exemption status before closing.
Do I pay a VA funding fee when refinancing?
Usually, unless you're exempt. A VA IRRRL currently carries a 0.50% funding fee. VA cash-out refinancing generally carries a 2.15% fee for first use or 3.30% for subsequent use.
Can a seller pay my VA funding fee?
Yes. The VA funding fee may be covered through permitted seller concessions, subject to VA rules and limits.
Can I get my VA funding fee refunded?
Possibly. If you later receive VA disability compensation with an effective date that is retroactive to before your loan closing, you may qualify for a refund of the funding fee.
How many times can I use a VA loan?
VA loan benefits can potentially be used more than once. Subsequent use may affect the funding-fee percentage and available entitlement. Read our guide to how many times you can use a VA loan.
Is a VA loan better than an FHA loan?
It depends on eligibility and the borrower's circumstances. VA loans can offer significant advantages for eligible borrowers, including no required down payment in many cases and no monthly PMI. See our detailed comparison of VA loans vs. FHA loans.
The Bottom Line
The VA funding fee is an important part of most VA loans, but the amount can vary substantially.
For a purchase loan in 2026, first-time borrowers with less than 5% down generally pay 2.15%, while subsequent users generally pay 3.30%. Putting at least 5% down reduces the percentage, and qualifying borrowers may be completely exempt.
Before deciding how much to put down or whether to finance the fee, calculate the actual numbers for your situation.
This content is for educational purposes only and does not constitute financial, legal, or tax advice. Loan programs, funding-fee requirements, tax treatment, rates, and eligibility requirements are subject to change. Confirm current VA program requirements with VA.gov and discuss your individual situation with a licensed loan officer or appropriate professional. NextGen Mortgage Loans is licensed in NH (NMLS# 1621958), MA (MB1621958), ME (1621958), FL (MBR4542), and RI (#20265029LB).
