Funding fee (VA)
A one-time fee on a VA loan — 2.15% on a first-use purchase with no down payment — that replaces monthly mortgage insurance and is waived for disabled veterans.
What does funding fee mean?
The VA funding fee is the main cost of a VA loan, standing in for the monthly mortgage insurance other low-down-payment loans charge. For a first-use purchase with no down payment it is 2.15% of the loan (3.3% on later use), and it drops with a down payment. It can be financed into the loan, and it is waived entirely for veterans receiving compensation for a service-connected disability.
The 2026 VA funding fee
| Down payment | First use | Later use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to 9.99% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
| IRRRL (streamline refinance) | 0.50% | 0.50% |
A cash-out refinance carries the purchase rate for no money down: 2.15% on first use, 3.30% after that.
In dollars, and who is exempt
On a $400,000 VA purchase with nothing down, a first-time user pays 2.15%, or $8,600. Putting 10% down cuts the rate to 1.25% of a $360,000 loan — $4,500. Most borrowers finance the fee into the loan instead of paying cash.
Veterans receiving VA compensation for a service-connected disability, eligible surviving spouses and certain Purple Heart recipients pay no funding fee at all. If you are awarded disability compensation after closing, ask the VA about a refund.
Frequently asked
How much is the VA funding fee?
For a first-use purchase with no down payment it is 2.15% of the loan (3.3% on later use), lower with a down payment. It can be financed into the loan and is waived for veterans with a service-connected disability.
Can the VA funding fee be waived?
Yes. Veterans receiving compensation for a service-connected disability, eligible surviving spouses, and certain Purple Heart recipients pay no funding fee at all.
Put it to use
VA Loan Calculator
Estimate a VA loan payment: $0 down, no PMI, including the one-time funding fee.
Mortgage Calculator with PMI
Include private mortgage insurance in your payment and find out exactly when PMI drops off.
Home Closing Cost Calculator
Estimate the closing costs a buyer pays: origination, title, escrow, appraisal and prepaids.
Related terms
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