VA funding fee rates
The VA funding fee is a one-time charge set by the Department of Veterans Affairs as a percentage of the loan, and it depends on the loan type, whether you have used the benefit before and, for a purchase, your down payment.[1] The rates in effect since April 7, 2023:
| Down payment | First use | After first use | Fee on a $350,000 loan (first use) |
|---|---|---|---|
| Less than 5% | 2.15% | 3.3% | $7,525 |
| 5% or more | 1.5% | 1.5% | $5,250 |
| 10% or more | 1.25% | 1.25% | $4,375 |
| Loan | Fee | On a $350,000 loan |
|---|---|---|
| Cash-out refinance, first use | 2.15% | $7,525 |
| Cash-out refinance, after first use | 3.3% | $11,550 |
| Interest rate reduction refinance (IRRRL) | 0.5% | $1,750 |
| Loan assumption | 0.5% | $1,750 |
On refinances the rate does not depend on a down payment.[1] The fee may be paid at closing or financed into the loan.
Who does not pay the funding fee
You do not pay the VA funding fee if any of these apply, according to the VA:[1]
- You receive VA compensation for a service-connected disability, or you are eligible for it but receive retirement or active-duty pay instead.
- You receive Dependency and Indemnity Compensation as a surviving spouse.
- You have a proposed or memorandum rating before closing that says you are eligible for compensation based on a pre-discharge claim.
- You are on active duty and provide evidence of a Purple Heart on or before closing.
Choose Yes under "Exempt" in the calculator to see the payment without the fee.
Worked example: no money down vs. 5% and 10% down
The down payment changes the fee rate as well as the loan, so the first 5% down saves more than 5%. At 7.11% for 30 years with the fee financed, on a $400,000 home:
| Down payment | Fee rate | Funding fee | Loan amount | Principal and interest |
|---|---|---|---|---|
| $0 | 2.15% | $8,600 | $408,600 | $2,748.68 |
| $20,000 (5%) | 1.5% | $5,700 | $385,700 | $2,594.63 |
| $40,000 (10%) | 1.25% | $4,500 | $364,500 | $2,452.01 |
Financing the $8,600 fee adds about $12,227 of interest over 30 years if you keep the loan to the end. A second-time buyer with no down payment pays 3.3%, or $13,200. The rate in the example is Freddie Mac's 30-year average for all conventional loans for the week of Nov 12, 2026;[7] use the rate your lender quotes for the VA loan.
No mortgage insurance, no prepayment penalty
A VA-backed purchase loan needs no private mortgage insurance or mortgage insurance premium, and no down payment as long as the price is not higher than the appraised value.[2] That is the main reason the full payment can be lower than a conventional or FHA loan with the same rate. You may also prepay a VA loan at any time without a premium or fee,[5] so the extra payment calculator applies to it fully. The VA caps seller concessions at 4% of the reasonable value of the home.[1] Rates and lender fees on VA loans still differ from lender to lender, so compare Loan Estimates from more than one, as the CFPB's home loan toolkit suggests for any mortgage.[6]
Is there a VA loan limit?
No, not if you have full entitlement. For loans closed on or after January 1, 2020, the VA does not set a loan limit for borrowers with full entitlement, provided you can afford the loan and the appraisal supports the price.[3][4] If part of your entitlement is still tied up in another VA loan, the county conforming limit comes back into the calculation; for 2026 the baseline one-unit limit is $832,750.[8]
Closing costs still applyThe funding fee is separate from the usual lender and title charges. Total them with the closing cost calculator, and compare the full payment with a conventional loan in the mortgage payment calculator.
Frequently asked questions
How much is the VA funding fee in 2026?
For a first-use purchase: 2.15% with less than 5% down, 1.5% with 5% or more and 1.25% with 10% or more. Later use with less than 5% down is 3.3%; an IRRRL is 0.5%.[1]
Can the VA funding fee be added to the loan?
Yes. It can be financed or paid at closing.[1] Financing it raises the loan and the interest you pay: about $12,227 over 30 years on the $8,600 fee in this example.
Who is exempt from the VA funding fee?
Veterans receiving (or eligible for) VA disability compensation, surviving spouses receiving Dependency and Indemnity Compensation, borrowers with a qualifying pre-discharge rating, and active-duty members with a Purple Heart.[1]
What is the VA loan limit for 2026?
There is no limit for borrowers with full entitlement on loans closed since January 1, 2020.[3] With partial entitlement, the county conforming limit is used.
Sources
- VA funding fee and loan closing costs
- VA-backed purchase loan
- VA home loan entitlement and limits
- Circular 26-19-30: Blue Water Navy Vietnam Veterans Act of 2019 (loan limits)
- 38 CFR 36.4311, Prepayment (VA home loans)
- Your home loan toolkit: A step-by-step guide
- Primary Mortgage Market Survey (PMMS)
- FHFA Announces Conforming Loan Limit Values for 2026