VA Funding Fee
A one-time fee paid to VA at closing that keeps the program running without down payments or monthly mortgage insurance. It can be paid in cash or financed into the loan, and is a percentage of the loan amount, not the price.
Purchase and construction loans
| 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% |
Refinance and other loans
| Loan type | Fee |
|---|---|
| Cash-out refinance | 2.15% first use / 3.3% after first use |
| IRRRL (streamline) | 0.5% |
| Loan assumption | 0.5% |
| Manufactured home (not permanently affixed) | 1% |
| Native American Direct Loan | 1.25% purchase / 0.5% refinance |
Rates effective April 7, 2023, per VA.gov (page reviewed October 2026). Example: first-time use, $400,000 loan, $0 down → 2.15% = $8,600.
Who is exempt
- Veterans receiving VA compensation for a service-connected disability
- Those eligible for that compensation but receiving retirement or active-duty pay instead
- Surviving spouses receiving Dependency and Indemnity Compensation (DIC)
- Service members with a proposed or memorandum rating before closing showing eligibility for compensation from a pre-discharge claim
- Active-duty service members who provide evidence of a Purple Heart on or before closing
Refunds
If you're later awarded disability compensation with an effective date before your closing, you may be eligible for a refund. Contact your VA Regional Loan Center.
Sources: Funding fee and closing costs
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