VA Funding Fee Chart 2026: What Military Homebuyers Need to Know
If you’re using a VA loan in 2026, understanding the VA funding fee could save you thousands of dollars — and help you avoid surprises during the home buying process.
The VA loan remains one of the BEST home loan benefits available to military members and veterans because it offers:
- No down payment options
- Competitive interest rates
- No private mortgage insurance (PMI)
- Flexible credit requirements
But many military homebuyers are caught off guard by the VA funding fee.
Here’s everything military families need to know about the VA funding fee in 2026, including current rates, exemptions, and how much you could pay.
What Is the VA Funding Fee?
The VA funding fee is a mandatory, one-time payment required on most VA-backed or VA direct home loans. The VA Funding Fee goes directly to the Department of Veterans Affairs. It replaces the need for monthly private mortgage insurance (PMI) and helps keep the VA loan program sustainable for future generations of Veterans.
The fee helps keep the VA loan program running for future military borrowers and reduces the cost to taxpayers.
Most borrowers choose to roll the fee into their loan amount instead of paying it upfront at closing.
VA Funding Fee Chart 2026
The amount you pay depends on:
- Your down payment
- Whether this is your first time using a VA loan
- Whether you’ve used a VA loan before
- Some military members are exempt from the VA Funding Fee which is discussed further down.
First-Time VA Loan Use
| Down Payment | VA Funding Fee |
|---|---|
| Less than 5% | 2.15% |
| 5% up to 10% | 1.50% |
| 10% or more | 1.25% |
Subsequent VA Loan Use
| Down Payment | VA Funding Fee |
|---|---|
| Less than 5% | 3.30% |
| 5% up to 10% | 1.50% |
| 10% or more | 1.25% |
Example of a VA Funding Fee
Let’s say you purchase a $400,000 home using your VA loan benefit for the first time with zero down.
Your estimated VA funding fee would be:
400000×0.0215=
That means your funding fee would be approximately $8,600.
Most borrowers finance this amount into the loan rather than paying cash upfront.
Who Is Exempt From the VA Funding Fee?
Many military borrowers qualify for a VA funding fee exemption.
You may be exempt if you:
- You receive VA compensation for a service-connected disability.
- You are eligible to receive compensation for a service-connected disability but you are currently receiving retirement or active-duty pay instead.
- You are a surviving spouse receiving Dependency and Indemnity Compensation (DIC).
- You are an active-duty Service member who has been awarded the Purple Heart.
For eligible borrowers, this exemption can save thousands of dollars.
Can You Roll the Funding Fee Into Your Loan?
Yes. Most VA borrowers finance the funding fee into their total loan amount instead of paying it out of pocket.
Example:
- Home price: $400,000
- VA funding fee: $8,600
- Total loan amount: $408,600
This helps military families keep more cash in savings for:
- PCS moves
- Emergency funds
- Furniture
- Home repairs
- Closing costs
Is the VA Funding Fee Tax Deductible?
Yes — in many cases, the VA funding fee may be tax deductible. Beginning in tax year 2026, qualifying homeowners may once again be able to deduct mortgage insurance premiums, including VA funding fees, if they itemize their deductions.
Military families should always consult a tax professional to understand current IRS rules and eligibility requirements.
Read more on Veterans Can Now Deduct VA Funding Fees on Taxes: What Veteran Homebuyers Need to Know
How to Lower Your VA Funding Fee
Military borrowers may lower their funding fee by:
- Putting at least 5% down
- Using the VA loan benefit for the first time
- Qualifying for a disability exemption
Even with the funding fee, VA loans are often significantly cheaper than conventional loans because borrowers avoid monthly PMI costs.
Why VA Loans Continue to Be One of the Best Military Benefits
The U.S. Department of Veterans Affairs VA loan program continues to help military families become homeowners with:
- No down payment options
- Flexible qualification guidelines
- Competitive interest rates
- Lower monthly payments
- Easier paths to homeownership
For many military families, the VA loan is one of the most valuable financial benefits earned through military service.
The VA funding fee is an important part of the VA loan process, but understanding how it works can help military families plan smarter and avoid surprises at closing.
For many military homebuyers, the savings from using a VA loan still far outweigh the cost of the funding fee.
If you’re considering using your VA loan benefit in 2026, make sure you understand:
- Current funding fee rates
- Exemptions
- Down payment impacts
- Total loan costs
One common misconception is that because VA loans offer zero down payment options, there are no upfront costs involved. While VA loans eliminate the need for a down payment in many cases, buyers may still have closing costs, prepaid expenses, and the VA funding fee unless they qualify for an exemption.
The more informed you are before starting the process, the smoother your home buying experience will be.
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