How it works
VA funding fee for purchase and construction loans
These rates are from VA.gov and have been in effect since April 7, 2023. They apply to Veterans, active-duty service members and National Guard and Reserve members. The fee is a percentage of the loan amount, not the price.
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Other VA loan types have their own fees: cash-out refinance 2.15% first use or 3.3% after; IRRRL 0.5%; loan assumption 0.5%; manufactured home not permanently affixed 1%; vendee loans 2.25%; Native American Direct Loan 1.25% purchase or 0.5% refinance. This calculator handles purchase loans.
Who doesn't pay the fee
Per VA.gov, you are exempt if you receive VA compensation for a service-connected disability, or are eligible for it but receive retirement or active-duty pay instead. You are also exempt if you are a surviving spouse receiving Dependency and Indemnity Compensation, a service member with a pre-discharge proposed or memorandum rating issued before closing, or an active-duty Purple Heart recipient.
The formulas
Base loan = price − down payment
Funding fee = base loan × fee %
Loan amount = base loan + funding fee (if financed)
P&I = M = L × r(1 + r)n / ((1 + r)n − 1)
Total monthly payment = P&I + property tax/12 + insurance/12 + HOA. VA loans have no monthly mortgage insurance.
Worked examples
$400,000 home, 0% down, 6.25% for 30 years, first use
Funding fee: 2.15% × $400,000.00 = $8,600.00, financed, for a total loan of $408,600.00. P&I: $2,515.82. With $400.00 tax and $150.00 insurance a month, the estimated payment is $3,065.82, with no monthly mortgage insurance. If you were exempt, the loan would be $400,000.00 and the payment $3,012.87.
Same home, subsequent use vs. 10% down
On a subsequent use with 0% down the fee rises to 3.3% ($13,200.00) and the payment to $3,094.14. Putting 10% down on a first use instead lowers the fee to 1.25% ($4,500.00), the loan to $364,500.00 and the payment to $2,794.29.
VA.gov's own example
A first-time user buying a $200,000.00 home with $10,000.00 down (5%) pays 1.5% of the $190,000.00 loan: $2,850.00. This calculator reproduces that figure.
VA loan advantages
- No down payment for eligible borrowers with full entitlement, subject to lender rules.
- No monthly mortgage insurance. The one-time funding fee replaces it, which often makes a VA payment lower than an FHA or low-down-payment conventional payment.
- Competitive rates and limits on certain closing costs the Veteran may be charged.
- Seller concessions of up to 4% of the home's reasonable value, plus normal closing-cost credits.
- Reusable benefit. You can use your VA home loan benefit more than once, although later uses usually carry a higher funding fee when you put less than 5% down.
Reducing your funding fee
The fee drops sharply with a down payment. On a $400,000.00 first-use purchase, putting 0% down means a $8,600.00 fee (2.15%), while 10% down cuts it to $4,500.00 (1.25%). That is a lower fee on a smaller loan. If you are later awarded disability compensation with an effective date before your closing, you may be eligible for a refund of the fee. Contact your VA regional loan center.
Financing the fee vs. paying cash
Financing the fee means no extra cash at closing, but you pay interest on it for the life of the loan and start with slightly less equity. Paying it in cash lowers your loan amount and total interest. On purchase loans the funding fee is the only closing cost you can finance into a VA loan. Other closing costs must be paid at closing, by you or through seller concessions or credits.
Eligibility basics
To get a VA-backed loan you need a Certificate of Eligibility (COE), based on your service history or status as a surviving spouse. You must also meet the lender's credit and income standards and plan to live in the home. The VA doesn't set a minimum credit score, but most lenders do. VA loans also require a VA appraisal and that the property meet minimum property requirements.
Compare your options
If you are not eligible for a VA loan, compare the cost of an FHA loan with our FHA loan calculator. Once you have a loan, see how extra principal payments could shorten it with the extra mortgage payment calculator.
How to read your VA results
Estimated monthly payment includes principal and interest on the full loan, including the funding fee if you finance it, plus one-twelfth of your annual property tax and insurance and any HOA dues. Cash for down payment shows what you need at closing for the down payment, plus the funding fee if you choose to pay it in cash. Other closing costs come on top. Total interest assumes you keep the loan for its full term without extra payments.
Your exact funding fee and payment will appear on your lender's Loan Estimate. Lenders may round slightly differently or add escrow cushions for taxes and insurance.
Entitlement and loan limits
Borrowers with full VA entitlement have no VA loan limit, although lenders still apply their own credit and income standards. If part of your entitlement is tied up in another VA loan you haven't paid off, county loan limits can affect how much you can borrow with no down payment. Your lender can check your Certificate of Eligibility and explain your remaining entitlement before you make an offer.
Frequently asked questions
How much is the VA funding fee in 2026?
For purchase loans: 2.15% for first use or 3.3% for subsequent use with less than 5% down, 1.5% with 5% or more down, and 1.25% with 10% or more down. These are the rates on VA.gov, effective since April 7, 2023.
Who is exempt from the VA funding fee?
Veterans receiving, or eligible for, VA disability compensation; surviving spouses receiving DIC; service members with a pre-discharge proposed or memorandum rating issued before closing; and active-duty Purple Heart recipients.
Can I finance the VA funding fee?
Yes. You can add it to your loan amount or pay it in full at closing. It is the only closing cost that can be financed on a VA purchase loan.
Do VA loans have PMI?
No. VA loans do not charge monthly mortgage insurance. The one-time funding fee helps fund the program instead.
Is there a down payment for a VA loan?
Eligible borrowers with full entitlement can often buy with no down payment, though lenders may require one in some cases. A down payment of 5% or more reduces the funding fee.
Is the funding fee based on the price or the loan amount?
On the loan amount. VA.gov notes that the fee applies only to the loan amount, not the purchase price.
Does this calculator include closing costs?
Only the funding fee. Other closing costs such as the appraisal, title, recording and origination fees vary by lender and location. Review your lender's Loan Estimate.