2026 VA funding fee rates
The fee depends on your down payment, whether you have used the benefit before, and whether you are exempt. These are the purchase-loan rates:
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Veterans with a 10% or higher disability rating, Purple Heart recipients, and eligible surviving spouses are exempt from the fee.
How VA loans compare
- No down payment - Conventional loans often need 5% to 20% and FHA needs 3.5%. VA requires nothing.
- No monthly PMI - Conventional charges PMI below 20% down, FHA charges MIP. VA substitutes a one-time funding fee.
- Lower rates - VA rates typically run 0.25% to 0.5% below conventional because of the guarantee.
- Easier qualifying - The VA does not set a minimum credit score, though lenders often want 580 to 620, and DTI limits are more flexible.
Tips to lower your VA payment
- Make a small down payment - Five percent drops the funding fee from 2.15% to 1.5% and reduces the balance.
- Check your disability rating - A 10%+ rating removes the funding fee entirely.
- Compare lenders - VA rates vary. A quarter-point difference on $300,000 saves roughly $45 a month.
- Pick the term deliberately - Thirty years lowers the payment; fifteen years saves far more interest.
Frequently asked questions
What is the VA funding fee?
It is a one-time charge that funds the VA loan guarantee program. The rate depends on your down payment, whether you have used a VA loan before, and whether you are exempt. It is usually financed into the loan rather than paid in cash at closing.
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation, active-duty service members with a Purple Heart, eligible surviving spouses, and some other categories are exempt. A disability rating of 10% or higher removes the fee entirely, often saving several thousand dollars.
Do VA loans require a down payment?
No. Qualified borrowers can finance 100% of the purchase price. Putting 5% or 10% down lowers the funding fee and the loan balance, but it is optional. Closing costs and prepaid items still apply and can be negotiated.
Do VA loans have mortgage insurance?
No monthly PMI or MIP. That is a major difference from conventional and FHA loans. You pay the funding fee once, and the VA guarantee replaces ongoing mortgage insurance, which keeps the monthly payment lower.
Can I use a VA loan more than once?
Yes. Eligible borrowers can reuse the entitlement, though the funding fee is higher on a subsequent use unless you put at least 5% down. Some borrowers also have remaining entitlement that allows a second VA loan without selling the first home.
Are VA loan rates lower than conventional?
Usually by about 0.25% to 0.5%, because the government guarantee reduces lender risk. Rates still vary by lender and credit profile, so compare at least three quotes. The funding fee and closing costs matter as much as the rate.
Estimates only. Funding fee rates, exemptions, and loan limits change by year and circumstance. Confirm eligibility with a VA-approved lender and your Certificate of Eligibility.
