VA funding fee: What to expect in 2026

VA loans are specialized mortgages for military personnel, veterans, and their surviving spouses that require no down payment. Most borrowers pay a VA funding fee, a percentage of the loan amount that helps fund the VA loan program.¹ Learn more about the VA funding fee, how much you need to pay, when it can be waived, and more.

Key takeaways:

• The VA funding fee is due at closing and helps fund the VA loan program.
• For standard purchase loans, first-time buyers with zero down payment owe a 2.15% fee, while subsequent users owe 3.3%. A larger down payment reduces the fee.
• Veterans with service-connected disabilities, active-duty Purple Heart recipients, and qualifying surviving spouses may be exempt from paying the fee.

What is a VA funding fee?

A VA loan funding fee is a one-time fee paid to the Department of Veterans Affairs when you get a VA loan.

Not everyone is eligible for a VA loan. They are available only to military personnel, veterans, National Guard and Reserve members, and their surviving spouses.

To get a VA loan, you need a Certificate of Eligibility (COE). If you don't have a COE yet, you can apply for one on the VA's website. Full eligibility criteria are available on the VA’s website.

Your veteran funding fee depends on whether you’ve used your VA loan benefit before and how much of a down payment you're making.

If you're buying a home with a VA purchase and construction loan, and it's the first time you're using your VA benefit, your VA loan funding fee cost is:

• 2.15% of the loan amount with a down payment of 5% or less
• 1.5% of the loan amount with a down payment of 5% up to 10%
• 1.25% of the loan amount with a down payment of 10% or more

After your first use, you'll pay:

• 3.3% of the loan amount with a down payment of 5% or less
• 1.5% of the loan amount with a down payment of 5% up to 10%
• 1.25% of the loan amount with a down payment of 10% or more

Are there any VA funding fee exemptions?

Not every borrower must pay the VA funding fee. Borrowers are typically eligible for a funding-fee exemption if:

• They receive compensation for a service-related disability
• They're eligible for service-related disability pay but receive retirement pay or active service pay
• They are the surviving spouse of a veteran who meets the eligibility requirements for the VA home loan program
• They are on active duty and have been awarded a Purple Heart

Your COE will state whether you qualify for an exemption to the VA loan funding fee.

How much is the VA funding fee in 2026?

The amount you pay for your VA funding fee when buying a typical home depends on whether you’ve had a VA loan in the past and the size of your down payment. First-time borrowers and people who make a larger down payment pay a lower fee.

Other types of VA mortgages, such as refinances or manufactured home loans, have different fee structures.² Understanding these fees is key to planning your budget and the costs associated with obtaining VA-backed financing for your home.

How does the VA funding fee differ from mortgage insurance?

Mortgage insurance is a common cost for other types of mortgages, such as conventional loans or FHA loans. It’s common enough that sometimes you’ll hear the funding fee called VA loan mortgage insurance or VA private mortgage insurance (PMI).

With a conventional mortgage, you pay for PMI if you put down less than 20%. PMI is added to your monthly bill. PMI can be canceled when you reach 20% equity in the home.

With FHA loans, you pay a mortgage insurance premium (MIP). MIP consists of both an up-front payment and ongoing monthly payments. MIP cancels after 11 years if you put down 10% or more, or the full term of the loan if you put down less than 10%.

Like mortgage insurance, the VA loan funding fee helps protect the VA if you default on your loan. However, unlike MIP or PMI, the VA loan funding fee is paid entirely up front and has no ongoing, monthly component.

USDA loans require an up-front and an annual guarantee fee that works much like MIP. Rocket Mortgage currently doesn't offer USDA loans.

Why is the VA loan funding fee assessed?

The VA loan funding fee is charged to borrowers to help cover the costs of the VA lending program.

The VA does not offer loans directly. Instead, it works with lenders that offer VA loans. The VA provides some insurance for those loans, reducing lenders' risk and allowing them to offer loans with no down payment and competitive rates.

The funding fee helps the VA cover its costs, keeping the program sustainable for future borrowers.

How is the fee paid?

VA loan funding fees are an up-front cost added to your mortgage. The fee is due at your VA loan closing, as part of your closing costs. Your lender will submit the funding fee to the VA on your behalf.

There are a few ways to pay the funding fee.

• Paying up front. This is the simplest option, but it requires that you cover the fee out of pocket.
• Financing it into the loan. You can roll the funding fee into your mortgage balance. That lets you avoid the up-front cost, but it means you're borrowing more and paying more interest.
• Asking the seller to pay. If you’re in a buyer’s market, you may be able to ask for seller concessions, such as getting the seller to pay your VA loan funding fee.

Are there any VA funding fee exemptions?

Not every VA loan borrower must pay the VA funding fee. The following types of people are typically eligible for a funding-fee exemption:

• Individuals who receive compensation for a service-related disability
• Individuals who are eligible for service-related disability pay but receive retirement pay or active service pay
• Surviving spouses who meet the eligibility requirements for the VA home loan program
• Active-duty service members who’ve been awarded a Purple Heart

To get a VA loan, you must first get a certificate of eligibility (COE). Your COE will clearly state whether you qualify for an exemption to the VA loan funding fee.

If you don’t have a COE yet, you can apply for one on the VA’s website.

Are you eligible for a VA funding fee refund?

VA loans can be complicated, so it’s possible that you paid the funding fee when you should have been exempt. If that happens, you may qualify for a refund.

For example, if you had a disability claim that was pending at closing but later approved with an effective date of before your closing date, you can request a refund.

If you believe you are eligible for a refund, contact your lender or call the VA Regional Loan Center at 877-827-3702.

The bottom line: Despite the VA funding fee, eligible homeowners can benefit from a VA loan

The VA loan remains a valuable benefit for military personnel and veterans. While the VA funding fee adds an up-front cost to your transaction, it replaces mortgage insurance payments required by other loan types. By allowing you to bypass a down payment and secure competitive interest rates, a VA loan ultimately saves you money both at closing and over the life of your mortgage.

Ready to take the next step toward homeownership? Apply online today with Rocket Mortgage.

¹ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

² Refinancing may increase finance charges over the life of the loan.

³ The VA Streamline program may have stricter requirements in some states. In order to qualify for the VA Streamline program, you must have a VA loan. The VA Streamline is only available on primary residences. Cash-out transactions are not allowed. In order to qualify for a VA Streamline, a 0.5% minimum reduction in interest rate on the previous fixed-rate loan must occur if the new loan will be a fixed rate or a 2% minimum reduction in interest rate on previous adjustable rate mortgage loan must occur; a minimum of 6 months of consecutive mortgage payments must be paid on the current loan at the time of application. Some states may require an appraisal. Additional restrictions/conditions may apply.