VA loans · 38 U.S.C. §3729VA funding fee: how much, who pays and who is exempt
Every VA-guaranteed purchase loan carries a funding fee paid to the VA, figured as a percentage of the loan amount and allowed to be financed into the loan (38 U.S.C. §3729(a)–(b)). For purchase loans closed from April 7, 2023 until June 9, 2034: 2.15% on a first-use loan with less than 5% down, 3.30% on a subsequent-use loan with less than 5% down, 1.50% with at least 5% but under 10% down, and 1.25% with 10% or more down – the same for active-duty veterans and reservists. An interest rate reduction refinance is 0.50% and an assumption 0.50%. On a $400,000 home with nothing down, first use, the fee is $8,600. No fee is charged to a veteran receiving VA disability compensation, a surviving spouse of a veteran who died from a service-connected disability, or an active-duty member who shows a Purple Heart award by closing (§3729(c)).
Fee table – loans closed April 7, 2023 to June 8, 2034
First use, under 5% down
2.15% of the loan (§3729(b)(2)(A)(iii)).
Subsequent use, under 5% down
3.30% of the loan (§3729(b)(2)(B)(iii)).
5% to under 10% down
1.50% of the loan, first or subsequent use (§3729(b)(2)(C)(iii)).
10% or more down
1.25% of the loan (§3729(b)(2)(D)(iii)).
Refinance and assumption
IRRRL 0.50%; loan assumption 0.50% of the unpaid balance (§3729(b)(2)(E), (I)).
Examples on a $400,000 home
0 down, first use: $400,000 × 2.15% = $8,600. 5% down: $380,000 × 1.50% = $5,700. 10% down: $360,000 × 1.25% = $4,500.
No funding fee for
- A veteran receiving VA disability compensation – or entitled to it but for retirement or active service pay (§3729(c)(1)).
- A veteran rated eligible for compensation in a pre-discharge rating or memorandum rating (§3729(c)(2)).
- A surviving spouse of a veteran who died from a service-connected disability.
- An active-duty service member who provides evidence of a Purple Heart award on or before closing.
What the TC checks
- The funding fee line on the Loan Estimate and Closing Disclosure against the buyer's down payment and use.
- Proof of the exemption from the lender's VA file, when the buyer says they are exempt.
- A Purple Heart exemption needs the evidence in hand before closing.
Questions VA buyers ask
How much is the VA funding fee in 2026?
2.15% for a first-use purchase loan with less than 5% down, 3.30% for subsequent use, 1.50% with 5% down and 1.25% with 10% down (38 U.S.C. §3729).
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation, eligible surviving spouses, and active-duty members with a Purple Heart shown by closing (§3729(c)).
Can the VA funding fee be financed?
Yes. The statute allows the fee to be included in the loan and paid from the proceeds (§3729(a)(2)).
Related guides
Keep the loan disclosures on the deal in ClosingCode, with a task to check the funding fee before closing.
Start free trialSource: 38 U.S.C. §3729 (govinfo.gov, read October 25, 2026).
General information, not legal or financial advice. ClosingCode is software; it is not a law firm, lender or brokerage. This guide is not a substitute for the advice or services of an attorney.