The short answer: The VA funding fee is a one-time charge on your loan amount, not your purchase price. For a first-use purchase it ranges from 2.15% to 1.25% depending on your down payment. Veterans who receive VA compensation for a service-connected disability, and some others, are exempt. Confirm your exemption before closing. Do not plan to ask for a refund after.
This post is for you if:
- You are a veteran about to buy or refinance with a VA loan.
- You receive VA disability compensation, or have a claim in process, and wonder about the fee.
- You want to know what the fee costs and whether you can finance it.
Want to know what your VA benefit looks like, including the funding fee? Run the free VA benefit check.
Check my VA benefitWhat is the VA funding fee?
It is a one-time payment that helps keep the VA loan program running. It is calculated on your loan amount, not on the price of the home. It is not monthly mortgage insurance, and you do not pay it every month. You pay it once, in cash at closing or by adding it to the loan.
Here is how it looks for different loans, as published by VA (chart effective April 7, 2023, as of October 28, 2026).
How much is the VA funding fee?
| Loan type | Down payment | First use | After first use |
|---|---|---|---|
| Purchase | Less than 5% | 2.15% | 3.3% |
| Purchase | 5% or more | 1.5% | 1.5% |
| Purchase | 10% or more | 1.25% | 1.25% |
| Cash-out refinance | Not applicable | 2.15% | 3.3% |
| IRRRL (VA streamline) | Not applicable | 0.5% | 0.5% |
VA says the refinance fees do not change with your down payment. For more on the streamline, see my guide to the VA loan in Las Vegas.
Who is exempt from the VA funding fee?
VA lists these groups.
- Veterans receiving VA compensation for a service-connected disability.
- Veterans who are eligible for that compensation but get retirement or active-duty pay instead.
- Surviving spouses receiving Dependency and Indemnity Compensation (DIC).
- Service members with a proposed or memorandum disability rating before the loan closing date.
- Active-duty service members with Purple Heart evidence on or before the closing date.
If one of these sounds like you, tell your loan officer on day one. It changes your numbers on every Loan Estimate.
Not sure if you are exempt? Tell me about your service record and I will help you find out what to ask VA.
Book a free callHow do you prove your exemption?
Your Certificate of Eligibility (COE) shows your funding fee status on a purchase or a cash-out refinance. An IRRRL does not need a COE, and your lender checks the exemption status in VA's system. Form 26-8937 is only needed in limited cases, like a pending pre-discharge claim or a surviving spouse IRRRL.
Here is the rule to remember. VA tells lenders that exemption status should be established before closing. VA also says lenders should not advise veterans to close and plan to request a refund later. A refund is possible if a disability award is effective before your closing date, and your lender or servicer submits the request. But it is a backup, not a plan.
Can you finance the VA funding fee?
Yes. VA says you can pay the full fee at closing or include it in your loan and pay it over time. If you finance it, your lender charges interest on it. On a purchase loan, the funding fee is the only thing you can finance. All other fees are due at closing.
The seller can help. VA allows seller credits that cover some or all of a buyer's closing costs. Seller concessions, including credits for the funding fee, are capped at 4% of the home's reasonable value.
Where does it show up on your paperwork?
On the Loan Estimate, a VA guarantee fee falls in the "Services You Cannot Shop For" group. On the Closing Disclosure, VA's technical spec places the funding fee in Section B. If you finance it, the form also shows closing costs financed. Ask your lender to point to the line, then check that it matches your exemption status.
Nevada's Home Is Possible down payment assistance is listed as ideal for VA borrowers, but it is not a funding fee exemption. I cover it in my Nevada down payment assistance guide. I could not confirm whether those funds can pay the VA fee, so ask a participating lender.
Frequently asked questions
Is the VA funding fee a monthly payment?
No. It is a one-time fee, based on the loan amount. You can pay it at closing or finance it.
Do all veterans pay the VA funding fee?
No. Veterans who receive VA compensation for a service-connected disability, and several other groups, are exempt.
Can I get a funding fee refund after closing?
Possibly, if a disability effective date is before your closing date and your lender or servicer submits the request. VA says not to plan on it.
Does a bigger down payment lower the fee?
On a purchase, yes. The fee drops at 5% and again at 10% down. On refinances, the down payment does not change the fee.
Can I finance the funding fee into a VA purchase loan?
Yes. On a purchase loan it is the only cost you can finance.
Sources
Last verified October 28, 2026. Programs, limits and fees change, so confirm the current numbers before you rely on them.
- VA: Funding fee and closing costs
- VA Circular 26-23-06 Change 2
- VA Circular 26-23-19, funding fee exemptions
- VA Form 26-8937
- CFPB Regulation Z 1026.37, Loan Estimate
- CFPB Regulation Z 1026.38, Closing Disclosure
- Nevada Housing Division: Home Is Possible for veterans
See what your VA benefit can do for you. Start with the free VA benefit check.
Start the VA benefit checkI am Fabion Medhanie, a retired U.S. Army Captain and mortgage broker in Las Vegas. This is education, not a rate quote or a loan approval. Your loan options depend on your full file.
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