VA Loan Funding Fee (2026): Rates, Who's Exempt & How to Avoid It
The VA loan has no PMI, but it does charge a one-time funding fee that keeps the program running. It's a percentage of the loan, financed into the mortgage — and many veterans pay $0 because they're exempt.
2026 funding fee rates (purchase loans)
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to 9.99% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
On a $300,000 loan with nothing down, a first-use fee of 2.15% is $6,450 — usually rolled into the loan, not paid in cash.
Who is exempt (pays $0)
- Veterans receiving VA disability compensation (even a 10% rating).
- Veterans eligible for disability comp but receiving retired pay instead.
- Purple Heart recipients on active duty.
- Surviving spouses of members who died in service or from a service-connected disability.
How to lower or avoid it
- Get a disability rating: if you're owed one, it can waive the fee entirely — worth thousands.
- Put money down: 5%+ drops the rate, and it also avoids the higher subsequent-use rate.
- The fee is the only ongoing-cost difference vs a no-PMI conventional loan — and one-time, unlike PMI.
Plan your purchase — start by checking your BAH and pay by ZIP.
Calculate my pay →Frequently asked questions
How much is the VA funding fee in 2026?
2.15% of the loan for first use with less than 5% down (3.3% for subsequent use); it drops to 1.5% with 5% down and 1.25% with 10% down. It's usually financed into the loan.
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation, those eligible for it, Purple Heart recipients on active duty, and surviving spouses — they pay $0.
Can I avoid the VA funding fee?
Yes — a service-connected disability rating waives it entirely, and a down payment of 5% or more lowers the rate.