How much is the VA funding fee in 2026?

For a first-time purchase with less than 5% down it is 2.15% of the loan amount. It drops to 1.5% at 5% down and 1.25% at 10% or more down. A subsequent use with less than 5% down is 3.3%.

Do I have to pay the funding fee out of pocket?

No. You can pay it in cash at closing or roll it into your loan and pay it over time. Most veterans finance it to keep their upfront cash near zero.

Am I exempt from the VA funding fee?

You are exempt if you receive VA compensation for a service-connected disability rated 10% or higher, are a qualifying Purple Heart recipient, or are an eligible surviving spouse. Your Certificate of Eligibility confirms your exemption status.

VA Funding Fee Explained (2026)

VA loans have no monthly mortgage insurance, but most borrowers pay one thing conventional and FHA buyers don't: a one-time VA funding fee. It is not a penalty and it is not profit for a lender — it is what keeps the VA loan program self-sustaining at no cost to taxpayers. Here is exactly what it is, what it costs in 2026, and who skips it entirely.

By Jodie Barber, NMLS #76185 · 6 min read · Updated July 2026

Key takeaways

✦The funding fee is a one-time cost, not monthly mortgage insurance — VA loans never carry PMI.
✦First use with less than 5% down is 2.15%; a later use with less than 5% down is 3.3%.
✦Putting 5% or 10% down lowers the fee for both first and subsequent uses.
✦Veterans with a 10%+ service-connected disability rating, Purple Heart recipients, and eligible surviving spouses pay nothing.

What the funding fee actually is

The VA funding fee is a one-time charge paid to the Department of Veterans Affairs on most VA purchase and refinance loans. Because the VA guarantees a portion of every loan, that guarantee has to be paid for somehow — the funding fee is how the program covers itself instead of leaning on taxpayers. In exchange, you get $0 down and no PMI for the life of the loan.

The fee is a percentage of your loan amount, not a flat dollar figure, so a larger loan means a larger fee. Two things move that percentage: how much you put down, and whether this is your first time using the VA benefit or a later use.

The 2026 rate tiers for a purchase

Here is how the purchase funding fee breaks down in 2026. Notice that a down payment lowers your fee — one of the few times putting money down on a VA loan changes the math.

✦First use, less than 5% down: 2.15% of the loan amount.
✦First use, 5% to just under 10% down: 1.5%.
✦First use, 10% or more down: 1.25%.
✦Subsequent use, less than 5% down: 3.3%.
✦Subsequent use, 5% to just under 10% down: 1.5%.
✦Subsequent use, 10% or more down: 1.25%.

Who is exempt

A large share of veterans pay no funding fee at all. If any of the following apply to you, the fee is waived entirely — it is simply removed from your loan.

✦You receive VA compensation for a service-connected disability rated 10% or higher.
✦You are a Purple Heart recipient serving in an active-duty capacity.
✦You are an eligible surviving spouse of a service member who died in service or from a service-connected disability.

Financing the fee vs. paying at closing

You have two ways to handle the fee. You can pay it in cash at closing, or you can roll it into your loan amount so it becomes part of your monthly payment. Most veterans finance it, which keeps their out-of-pocket cash near zero — one of the whole points of a VA loan.

The trade-off is simple: financing the fee means you pay a little interest on it over time, while paying it upfront keeps your loan balance lower. Neither choice is wrong. Jodie will show you both side by side so you can see the actual dollars before you decide.

Estimating your fee before you apply

A VA funding fee calculator is a handy gut-check: you plug in your loan amount, your down payment, and whether this is a first or subsequent use, and it multiplies out the fee. It is a useful estimate, but it is only as good as the assumptions behind it — your exemption status, your exact down payment, and your final loan amount all shift the result.

Think of a calculator as a starting point, not a quote. This article is educational and not a commitment to lend; your actual fee is confirmed in writing during underwriting, subject to credit and underwriting approval.

Frequently asked questions

How much is the VA funding fee in 2026?: For a first-time purchase with less than 5% down it is 2.15% of the loan amount. It drops to 1.5% at 5% down and 1.25% at 10% or more down. A subsequent use with less than 5% down is 3.3%.
Do I have to pay the funding fee out of pocket?: No. You can pay it in cash at closing or roll it into your loan and pay it over time. Most veterans finance it to keep their upfront cash near zero.
Am I exempt from the VA funding fee?: You are exempt if you receive VA compensation for a service-connected disability rated 10% or higher, are a qualifying Purple Heart recipient, or are an eligible surviving spouse. Your Certificate of Eligibility confirms your exemption status.

Keep reading

What Is a VA Loan? A Complete 2026 Guide

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VA Loan Requirements: Do You Qualify?

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