Quick answer, as of September 8, 2026
The standard VA purchase funding fee is 2.15% for first use and 3.3% after first use with less than 5% down. At least 5% down lowers the tier to 1.5%; at least 10% lowers it to 1.25%. Qualifying exemptions can remove the fee. Apply the percentage to the loan after the down payment.
Gregg Costin, Realtor, Levin Rinke Realty
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Purchase fee tiers
These are VA's published purchase-loan tiers reviewed September 8, 2026. The fee is a program charge, separate from the interest rate, lender charges, prepaid insurance and taxes. The lender must verify your use category, exemption and transaction.
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| At least 5%, less than 10% | 1.5% | 1.5% |
| At least 10% | 1.25% | 1.25% |
Who may be exempt?
VA lists these categories. Have the lender obtain the required evidence and confirm status before closing:
- Receiving VA compensation for a service-connected disability.
- Eligible for that compensation but receiving retirement or active-duty pay instead.
- A surviving spouse receiving Dependency and Indemnity Compensation.
- A service member with a qualifying proposed or memorandum rating before closing through the pre-discharge process.
- An active-duty service member who provides evidence of receiving the Purple Heart on or before closing.
A pending claim or a disability percentage alone is not a complete exemption check. A later award can support a refund if its qualifying compensation effective date precedes closing. Keep the decision, dates and closing records and ask VA or the servicer to review them.
Compare cash and financed balances
| Scenario | Down payment | Base loan | Fee | Loan with fee |
|---|---|---|---|---|
| First use, zero down | $0 | $300,000 | $6,450 | $306,450 |
| Subsequent use, zero down | $0 | $300,000 | $9,900 | $309,900 |
| 5% down | $15,000 | $285,000 | $4,275 | $289,275 |
| 10% down | $30,000 | $270,000 | $3,375 | $273,375 |
These are mathematical examples, not lender quotes. Other cash requirements are excluded. Financing the fee increases the balance and the interest paid on that financed amount. Paying a down payment to reach a lower fee tier also uses cash you might otherwise keep in reserves.
Use the shared ownership calculator to compare first use, subsequent use, an exemption confirmed by the lender, financing the fee and paying it at closing. Replace the starting price and expenses with your actual figures.
Purchase, IRRRL and cash-out rules differ
An IRRRL has a 0.5% funding fee unless an exemption applies. Cash-out refinancing uses its own schedule; the purchase down-payment tiers above do not apply. A VA purchase permits financing the funding fee, while other purchase closing costs generally need cash or eligible credits.
Request an itemized Loan Estimate that identifies the fee, discount points, lender charges, prepaids and escrow separately. Ask who pays each charge and how it changes cash to close and the final balance. A credit does not automatically make a higher rate the less expensive offer.
Sources and review scope
Reviewed September 8, 2026: VA funding fees and closing costs, VA purchase loans, CFPB Loan Estimate. This review covers the statements on this page. It does not certify every page, older download, lender offer or individual transaction.
Frequently asked questions
Is the fee calculated on the home price or the loan?
For a purchase, apply the applicable percentage to the base loan after the down payment. For example, a $300,000 purchase with 5% down leaves a $285,000 base loan; a 1.5% fee is $4,275.
Does every veteran pay a funding fee?
No. VA lists exemptions for qualifying disability-compensation recipients and certain eligible borrowers receiving retirement or active-duty pay instead, qualifying surviving spouses receiving DIC, specified pre-discharge proposed or memorandum ratings, and active-duty Purple Heart recipients who provide evidence by closing. Have the lender verify the applicable category.
Is a disability percentage by itself the complete exemption rule?
No. Review the VA exemption category and documentation with the lender. Compensation eligibility, timing and other categories matter. A pending claim alone does not automatically remove the fee.
Can I finance the fee and other purchase closing costs?
The VA purchase funding fee can be financed or paid at closing. VA purchase guidance does not generally allow other closing costs to be rolled into the loan. Approved credits may offset eligible costs; review your Loan Estimate and cash to close.
Do IRRRLs use the purchase funding-fee tiers?
No. VA lists a 0.5% IRRRL fee unless an exemption applies. Cash-out refinance and other loan types have their own schedules. Do not use the purchase down-payment tiers for a refinance.
When can a fee refund apply after a disability award?
A later award may support a refund when the effective date of qualifying VA compensation is before the loan closing date. Review the decision and dates with VA or the servicer; not every later rating creates a refund.
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