Reviewed by Jeff Shin, NMLS #1041652. Updated .
How much the fee is
The fee is a percentage of the loan amount. For a purchase, the VA sets it by your down payment and by whether you have used the VA home loan benefit before. For a VA IRRRL, the VA sets a flat 0.5% whether it is your first use or not. The VA publishes the current table on its funding fee page.
Who does not pay it
Per the VA, you do not pay the funding fee if any of these is true:
- You receive VA compensation for a service-connected disability.
- You are eligible for that compensation but receive retirement or active-duty pay instead.
- You are a surviving spouse receiving Dependency and Indemnity Compensation.
- You are a service member with a proposed or memorandum disability rating issued before closing, based on a pre-discharge claim.
- You are on active duty and received a Purple Heart on or before closing.
Your Certificate of Eligibility is where a lender looks first, so check it early. See funding fee exemption checks.
Paying it, or getting it back
You can pay the fee in full at closing or finance it into the loan and pay it over time. If the VA later awards you disability compensation retroactive to a date before your closing, you may be due a refund. Read funding fee refund checks.
Related terms
- VA Certificate of Eligibility (COE)
- VA IRRRL (Interest Rate Reduction Refinance Loan)
- VA residual income
- Private mortgage insurance (PMI)
Related on BankPricer
Sources
Definitions on this page are summarized from the agencies that set the rules. Lenders can add stricter requirements. Checked October 7, 2026.
Not sure which of these applies to you?
That is usually the actual question. Send the situation rather than the product name — purchase or refinance, primary or investment, price range, and timeline — and you get the structures that fit, with what each one costs.