VA Funding Fee Chart 2026: Complete Rate Guide and Exemptions

What Is the VA Funding Fee in 2026?

The VA funding fee is a one-time payment required on most VA-guaranteed home loans. As of 2026, first-time homebuyers with less than 5% down pay 2.15%, while subsequent use with less than 5% down is 3.3% . Making a 5% down payment reduces the fee to 1.5%, and 10% down lowers it to 1.25% regardless of prior use . Veterans receiving service-connected disability compensation are entirely exempt from the fee .

Quick Facts

Full 2026 VA Funding Fee Chart

VA-Backed Purchase and Construction Loans

These rates apply to Veterans, active-duty service members, and National Guard and Reserve members for home purchases and construction loans .

Note: If you previously used a VA loan only for a manufactured home, you still qualify for the first-time use rate .

VA-Backed Cash-Out Refinance Loans

Cash-out refinance rates do not vary based on down payment amount .

Interest Rate Reduction Refinance Loan (IRRRL)

The IRRRL, also known as a VA streamline refinance, carries the lowest funding fee regardless of prior use .

Other Loan Types

How to Calculate Your VA Funding Fee

The funding fee applies only to the loan amount, not the purchase price .

Example: If you’re buying a $200,000 home and putting 5% down ($10,000), your loan amount is $190,000. With a first-time use and 5% down, the fee is 1.5% of $190,000, or $2,850 .

If you put zero down on a $300,000 home and it’s your first VA loan, the fee would be 2.15% of $300,000, or $6,450. A subsequent use with zero down would be 3.3%, or $9,900 .

Who Is Exempt from the VA Funding Fee?

You won’t have to pay the VA funding fee if any of these apply :

• You’re receiving VA compensation for a service-connected disability

• You’re eligible to receive VA compensation for a service-connected disability but receive retirement or active-duty pay instead

• You’re receiving Dependency and Indemnity Compensation (DIC) as a surviving spouse

• You’re a service member who received a proposed or memorandum rating before closing saying you’re eligible for compensation due to a pre-discharge claim

• You’re an active-duty member of the Armed Forces who provides evidence of having received a Purple Heart on or before your loan closing date

Important: Since 2021, more than half of Veterans who obtained a VA-guaranteed home loan were exempt from paying the funding fee .

Funding Fee Refunds

You may be eligible for a refund if you’re later awarded VA compensation for a service-connected disability, provided the effective date of your rating is retroactive to before your loan closing date .

If you receive a proposed or memorandum rating after your loan closing date, you’ll still need to pay the funding fee and won’t be eligible for a refund based on that rating .

2026 Key Updates

Tax Deduction Now Available

Starting in 2026, Veterans, service members, and surviving spouses can deduct the VA funding fee on their taxes when purchasing a home using a VA-guaranteed home loan . This deduction applies if you are itemizing your taxes .

Rates Unchanged

The funding fee percentages for 2026 remain unchanged from the 2023 schedule. What moves between years is the loan amount the percentages apply to, not the rate table itself .

Common Questions

1. What is the VA funding fee in 2026?

The VA funding fee ranges from 0.5% to 3.3% of the loan amount . First-time homebuyers with less than 5% down pay 2.15%, while subsequent use is 3.3%. An IRRRL is 0.5% regardless of prior use .

2. How can I avoid paying the VA funding fee?

You can avoid paying the fee if you receive VA disability compensation, are a Purple Heart recipient on active duty, or are a surviving spouse receiving Dependency and Indemnity Compensation. Making a larger down payment also reduces the fee percentage .

3. Is the VA funding fee tax-deductible in 2026?

Yes. Starting in 2026, Veterans, service members, and surviving spouses can deduct the VA funding fee on their taxes when purchasing a home, provided they itemize their deductions .

4. Can I roll the VA funding fee into my loan?

Yes. You can finance the funding fee into your loan amount, paying it over time with interest, or pay it in full at closing .

5. What is the difference between first use and subsequent use?

First use means you have never used a VA loan benefit before. Subsequent use means you have used a VA loan in the past, even if you’ve sold that home or paid off the mortgage. The fee is higher for subsequent use only when putting less than 5% down .

6. Does making a down payment reduce the funding fee?

Yes. Putting down 5% reduces the fee from 2.15% to 1.5% on a first-time use. Putting down 10% or more reduces it to 1.25% for both first and subsequent use .

7. Do I pay the funding fee on an IRRRL refinance?

Yes, but the fee is only 0.5% of the loan amount for all borrowers, regardless of prior VA loan usage .

8. What is the funding fee for a cash-out refinance?

For a VA cash-out refinance, first-time users pay 2.15% while subsequent users pay 3.3% of the loan amount .

9. How is the funding fee different from mortgage insurance?

The VA funding fee is a one-time charge, while private mortgage insurance (PMI) is paid monthly. VA loans never require PMI, even with zero down payment .

10. What if I have a service-connected disability but am still on active duty?

If you are receiving military retirement or active-duty pay in lieu of VA compensation for a service-connected disability, you are still exempt from the funding fee .

11. Can I get a refund if I paid the fee and later get a disability rating?

Yes, if your VA disability rating is retroactive to before your loan closing date. If you receive a rating after closing, you are not eligible for a refund based on that rating .

12. Does the funding fee apply to National Guard and Reserve members?

Yes. The same fee structure applies to National Guard and Reserve members, with eligibility for the same exemptions as active-duty Veterans .

Key Takeaways

• The VA funding fee is a one-time payment ranging from 0.5% to 3.3% of the loan amount, depending on loan type, down payment, and prior use 

• Making a down payment reduces the fee: 5% down lowers first-time use from 2.15% to 1.5%; 10% down lowers it to 1.25% for both first and subsequent use 

• You are exempt from the fee if you receive VA disability compensation, are a Purple Heart recipient on active duty, or are a surviving spouse receiving DIC 

• The IRRRL (streamline refinance) fee is just 0.5% regardless of prior use 

• The 2026 funding fee is tax-deductible for itemizers—a new benefit starting this year 

• You can roll the fee into your loan or pay it at closing 

• Refunds may be available if your disability rating is retroactive to before your closing date 

• More than half of VA loan borrowers have been exempt from the funding fee since 2021 

• The fee percentages remain unchanged from the 2023 schedule—only loan amounts change 

Official Resources

• VA Funding Fee and Closing Costs: VA.gov/housing-assistance/home-loans/funding-fee-and-closing-costs

• VA Home Loans Program: VA.gov/housing-assistance/home-loans

• VA Funding Fee Exemptions: VA.gov/housing-assistance/home-loans/funding-fee-and-closing-costs

• Apply for a Certificate of Eligibility: VA.gov/housing-assistance/home-loans/eligibility

• Contact VA Benefits Hotline: 1-800-827-1000

• USA.gov: USA.gov

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