How Much Is the VA Funding Fee? 2026 Rates Explained

The short answer:

The VA funding fee is a one-time fee of 0.5% to 3.3% of the loan amount. For a first-use VA purchase loan with less than 5% down, the fee is 2.15%; subsequent use is 3.3%. Putting 5% to 9.99% down lowers it to 1.5%, and 10% or more down drops it to 1.25%. An IRRRL refinance is a flat 0.5%, and veterans receiving VA disability compensation are exempt.

How much is the VA funding fee? For most first-time VA borrowers buying with no down payment, the answer is 2.15% of the loan amount. But the exact VA funding fee amount depends on three things: your loan type, your down payment amount, and whether this is your first or a subsequent VA loan.

This guide breaks down the full VA funding fee chart, how to calculate your fee, the VA funding fee exemptions, and how to claim a VA funding fee refund. It’s written for Colorado borrowers — especially the service members and veterans around Fort Carson, Peterson Space Force Base, Schriever Space Force Base, and the U.S. Air Force Academy who use VA home loans every day.

How much is the VA funding fee? The quick answer

Here are the current VA funding fee rates from the VA.gov funding fee schedule. The same rates apply heading into 2026 unless the Department of Veterans Affairs publishes a change.

Loan type and down payment	First use	Subsequent use
Purchase loan, less than 5% down	2.15%	3.3%
Purchase loan, 5% to 9.99% down	1.5%	1.5%
Purchase loan, 10% or more down	1.25%	1.25%
IRRRL (streamline refinance)	0.5%	0.5%
VA cash-out refinance	2.15%	3.3%

The funding fee is calculated on the total loan amount, charged once when the loan closes, and can be financed into the loan balance. With that snapshot in place, let’s look at what the fee actually is and why it exists.

What is the VA funding fee?

The VA funding fee is a one-time fee paid to the Department of Veterans Affairs when a VA loan closes. It funds the VA home loan program itself, keeping the guaranty running for future VA borrowers without ongoing taxpayer appropriations.

That guaranty is what makes the VA loan program so unusual. Because Veterans Affairs backs a portion of every VA loan, lenders can offer eligible borrowers no down payment and no monthly mortgage insurance.

A one-time fee, not monthly mortgage insurance

The VA funding fee is often confused with mortgage insurance, but they work completely differently. Private mortgage insurance on a conventional loan is a recurring monthly charge; the VA funding fee is a single upfront fee at closing.

VA loans never carry monthly mortgage insurance. Once the funding fee is paid — or waived through an exemption — there is no insurance line item in your monthly payment, ever.

How the fee gets paid

Most VA borrowers roll the funding fee into the total loan amount rather than paying it in cash at closing. You can also pay it out of pocket, or negotiate for the seller to pay it as part of loan closing costs.

You’ll see the exact figure itemized on your Loan Estimate, so there’s no mystery by the time your loan closes. Next, let’s walk through the full fee structure in detail.

VA funding fee chart for 2026

The VA funding fee structure has two main variables: how much you put down and whether you’ve used your VA loan entitlement before.

Purchase loans, first use

For a first-use VA purchase loan, the funding fee is 2.15% with less than 5% down. Put 5% to 9.99% down and it falls to 1.5%; put 10% or more down and it falls to 1.25%.

Since most VA buyers use the zero-down benefit, 2.15% is the figure that applies to the majority of first-time VA purchases.

Purchase loans, subsequent use

A subsequent VA loan with less than 5% down carries a 3.3% funding fee — the highest rate on the chart. This is common for military families who have PCS’d, sold a previous home, and are buying again with VA financing.

The good news: the down payment tiers don’t penalize repeat use. With 5% to 9.99% down the fee is 1.5% regardless of prior use, and with 10% or more down it’s 1.25% for any use.

Refinance loans

The Interest Rate Reduction Refinance Loan (IRRRL), the VA’s streamline refinance, charges a flat 0.5% funding fee no matter how many VA loans you’ve had. That low fee is a big reason the IRRRL is popular when rates drop.

A VA cash-out refinance follows the purchase loan schedule: 2.15% for first use and 3.3% for subsequent use. Remember that refinance closing costs overall commonly run about 2% to 5% of the loan amount, so the funding fee is only one piece of the total.

Now that you know the percentages, here’s how to turn them into a dollar figure.

How do I calculate the VA funding fee?

Calculating the VA loan funding fee takes three steps. First, find your base loan amount — the purchase price minus any down payment. Second, find your rate on the VA funding fee chart above. Third, multiply.

Worked example on a $400,000 purchase

Say you’re buying a $400,000 home with no down payment on your first VA loan. The fee is 2.15% of $400,000, which works out to $8,600.

If you finance that fee, your total loan balance becomes $408,600. If this were a subsequent VA loan at 3.3%, the fee on the same $400,000 would be $13,200 instead.

How a down payment changes the math

On that same $400,000 purchase price, putting 5% down ($20,000) drops your fee rate to 1.5% on a $380,000 loan — $5,700. Putting 10% down ($40,000) drops it to 1.25% on $360,000 — $4,500.

For subsequent-use borrowers especially, a modest down payment amount can cut the funding fee dramatically, since 5% down cuts the rate from 3.3% to 1.5%.

Financing the fee into the loan

Rolling the funding fee into the loan balance means no extra cash at closing, but you’ll pay interest on the fee over the life of the loan, and your monthly payment will be slightly higher. A loan officer can run both versions so you can compare.

Of course, the best funding fee is no funding fee at all — and a large share of VA borrowers qualify for exactly that.

Who is exempt from the VA funding fee?

VA funding fee exemptions are one of the most valuable and most overlooked parts of VA home loan benefits. If you’re exempt, the fee is waived entirely — on a $400,000 first-use purchase, that’s $8,600 you never pay.

Veterans receiving VA disability compensation

Veterans who receive VA compensation for a service-connected disability are exempt from the VA funding fee. Any compensable rating qualifies — there is no minimum percentage required for the exemption.

This also generally applies to veterans who would receive VA disability compensation but instead receive retirement pay or active duty pay, since the entitlement to compensation is what drives the exemption.

Surviving spouses

Eligible surviving spouses of veterans who died in service or from a service-connected disability are also exempt. Surviving spouses receiving Dependency and Indemnity Compensation should make sure their exemption status is reflected before the loan closes.

Active-duty Purple Heart recipients

Active duty service members who have received the Purple Heart are exempt from the funding fee on a VA-backed purchase. This exemption applies while still serving, before any disability rating is in place.

How exemption status is verified

Your exemption is documented on your Certificate of Eligibility (COE). When your lender pulls the COE, the exempt status shows automatically — but if you’ve recently been awarded VA compensation, confirm the COE reflects it before closing so the fee isn’t charged in error. Our guide to VA eligibility and entitlement covers the COE in detail.

What if your disability claim is still pending when the loan closes? That’s where refunds come in.

Can you get a VA funding fee refund?

Yes. If you’re later awarded VA compensation with an effective date before your loan closing date, you may be eligible for a VA funding fee refund through the VA.

Pre-discharge claims and pending ratings

This scenario is common around Colorado Springs: a separating service member files a pre-discharge claim, buys a home before the rating is finalized, and pays the funding fee at closing. If the disability award’s effective date lands before the loan closing date, that fee can be refunded.

How to request the refund

Refund requests go through your lender or the VA Regional Loan Center that handles your loan. Keep your award letter handy — the effective date on it is what determines eligibility. If the fee was financed into your loan, the refund is typically applied to your loan balance.

Exemptions and refunds aside, it’s worth seeing how the funding fee stacks up against what other loan programs charge.

VA funding fee vs mortgage insurance on other loans

Every low-down-payment loan type has a cost for the reduced risk to the lender. The question is whether you pay it once or every month.

Conventional loans and PMI

Conventional loans with less than 20% down typically require private mortgage insurance, which runs about 0.5% to 1.5% of the original loan amount per year. On a $400,000 loan, that’s roughly $2,000 to $6,000 annually — about $167 to $500 per month — until you hit the cancellation thresholds (removable at 80% loan-to-value, auto-terminating at 78% under the Homeowners Protection Act).

FHA loans and MIP

Federal Housing Administration (FHA) loans charge an upfront mortgage insurance premium of 1.75% plus an annual MIP paid monthly. With less than 10% down, FHA MIP lasts for the life of the loan — a structural disadvantage versus the VA’s one-time fee.

USDA loans

USDA loans offer 100% financing for eligible rural buyers but charge an upfront guarantee fee plus an annual fee. Like FHA, the cost recurs rather than ending at closing.

Stack a one-time 2.15% fee against years of monthly mortgage insurance and the VA mortgage usually wins on cost of ownership. We break this down further in our VA mortgage pros and cons guide. There’s one more local detail Colorado buyers should know: loan limits.

Does the funding fee change at higher loan amounts in Colorado?

No — the funding fee percentage is the same regardless of loan size. For 2026, the FHFA conforming loan limit for El Paso County and most of Colorado is $832,750, but with full VA loan entitlement there is no VA loan limit at all.

That matters in the Colorado Springs market, where home prices have pushed many buyers near conventional jumbo territory. A veteran with full entitlement can finance above $832,750 with no down payment, paying the same 2.15% first-use funding fee percentage. Learn more about VA loans in Colorado Springs and current Colorado Springs VA loan rates.

One last practical question: is the fee ever worth avoiding with a bigger down payment?

Should you make a down payment just to lower the fee?

Sometimes. If you have the cash and this is a subsequent VA loan, cutting the fee from 3.3% to 1.5% with 5% down is a meaningful saving on top of the lower loan balance.

If you’re a first-use buyer who needs cash for moving, furniture, or reserves, financing the 2.15% fee and keeping your savings intact is often the smarter play. Run both scenarios with a lender before you decide — the right answer depends on your cash position and how long you’ll keep the home.

Next steps for Colorado borrowers

First, check your COE — your exemption status and entitlement are documented there. Second, get a funding fee estimate built into a real Loan Estimate so you see the full picture of closing costs, property taxes, and homeowners insurance, not just the fee.

719 Lending is a Colorado Springs mortgage broker (NMLS #1601989) that works with VA borrowers across Fort Carson, Peterson, Schriever, and the Academy every week. Contact us at (844) 719-5363, or compare all of our loan options to see whether a VA purchase loan, IRRRL, or another program fits your situation best.

Frequently asked questions

What is the VA funding fee for 2026?

The VA funding fee for a first-use purchase loan with less than 5% down is 2.15% of the loan amount; subsequent use is 3.3%. Putting 5% to 9.99% down lowers the fee to 1.5%, and 10% or more down lowers it to 1.25%. An IRRRL refinance is a flat 0.5%, and a VA cash-out refinance is 2.15% first use or 3.3% subsequent use.

How do I calculate the VA funding fee?

Multiply your loan amount by your fee rate from the VA funding fee chart. Example: a first-use $400,000 VA purchase with no down payment is 2.15% × $400,000 = $8,600. Most borrowers finance the fee, making the total loan balance $408,600.

Who doesn’t have to pay the VA funding fee?

Veterans receiving VA compensation for a service-connected disability, eligible surviving spouses, and active-duty Purple Heart recipients are exempt. Exemption status appears on your Certificate of Eligibility (COE), so confirm it’s current before your loan closes.

Can I get the VA funding fee refunded?

Yes. If you’re awarded VA disability compensation with an effective date before your loan closing date — common with pre-discharge claims — you may be eligible for a VA funding fee refund through the VA. If the fee was financed, the refund is typically applied to your loan balance.

Does the VA funding fee replace monthly mortgage insurance?

Effectively, yes. VA loans never carry monthly mortgage insurance. By contrast, conventional loans under 20% down typically require PMI at about 0.5% to 1.5% per year, and FHA loans charge a 1.75% upfront MIP plus an annual MIP — which lasts the life of the loan with under 10% down.

Is the VA funding fee higher the second time you use a VA loan?

Only at low down payments. A subsequent VA loan with less than 5% down carries a 3.3% fee versus 2.15% for first use. With 5% to 9.99% down the fee is 1.5% for any use, and with 10% or more down it’s 1.25% for any use.

719 Lending Inc. is a private mortgage broker and is not affiliated with the U.S. Department of Veterans Affairs, FHA, HUD, or any government agency.

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719 Lending Inc., NMLS #1601989 · Equal Housing Opportunity · This article is educational only, is not a commitment to lend, and not all applicants will qualify. Rates referenced are national survey averages, not offered rates.