VA Funding Fees Explained: 2026 Tables & Exemptions

Chapter 5 of 12 · Part of the VA Loan Knowledge Center

VA.gov rates effective April 7, 2023 still apply in September 2026. First use 2.15% with less than 5% down, subsequent use 3.3%, exemptions on the COE. Worked Jacksonville math on $325,000 Mandarin, $410,000 Orange Park, and $550,000 Nocatee — plus IRRRL, assumption, and cash-out rows.

Estimate your VA funding fee — talk to Matt — 904-309-0609

From the Podcast

Full transcripts of the VA Playbook episodes covering this guide. More episodes

VA Playbook 16: The Funding Fee — Exact Percentages

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What exactly is the V A funding fee on your first loan, versus your second? Here are the exact percentages from the V A's current table, and what they cost on a four hundred thousand dollar home.

Welcome to V A Playbook, a special series from The Jacksonville Real Estate Podcast, by Military Realty of Florida. I am Mike.

The funding fee is a one time charge paid to the V A at closing. It helps fund this program, so the benefit can keep existing with no required down payment and no monthly mortgage insurance. It is calculated as a percentage of the loan amount, not the purchase price, and the percentage is set by the V A's published table, not by your lender's mood.

The whole table turns on two questions. Is this your first use of the benefit, or a later use? And how much are you putting down? The current rates took effect in April of twenty twenty three, and they are the rates published on V A dot gov today.

First use, with less than five percent down, including the classic zero down purchase: two point one five percent. After first use, at that same low down payment: three point three percent. That jump is the single biggest difference between a first V A loan and every one after it.

Put five percent or more down, and the fee drops to one point five percent, the same for first use and later use. Put ten percent or more down, and it drops again, to one point two five percent, again the same either way. Notice the pattern. A real down payment completely erases the first use versus second use penalty.

Now the dollar math, on a four hundred thousand dollar purchase with nothing down. First use: two point one five percent of four hundred thousand dollars is eight thousand, six hundred dollars. Later use: three point three percent of four hundred thousand dollars is thirteen thousand, two hundred dollars. Same house, same zero down, and a difference of four thousand, six hundred dollars, decided entirely by whether you have used this benefit before.

Now the five percent version. Five percent down on four hundred thousand dollars is twenty thousand dollars, which leaves a loan of three hundred eighty thousand dollars. At one point five percent, the fee is five thousand, seven hundred dollars, whether it is your first use or your fifth.

And the ten percent version. Forty thousand dollars down leaves a loan of three hundred sixty thousand dollars, and the fee at one point two five percent is four thousand, five hundred dollars.

Two more facts keep this honest. First, the fee can be rolled into the loan, and most zero down buyers finance it rather than bringing extra cash for it. You still pay it. You just pay it over time, as part of the balance. Second, some borrowers pay no fee at all. If your C O E shows you as exempt, most often because you receive V A disability compensation, the fee is zero dollars at every tier on this table. Exemptions and refunds get their own episode in this series.

Here is the Jacksonville picture. A first time buyer in Orange Park at two point one five percent and a shipmate buying his second home near Mayport at three point three percent can be looking at the same street and the same price, with a four thousand, six hundred dollar difference hiding in one line of the estimate. That line deserves thirty seconds of your attention before you sign.

Here is your action step. When your lender's estimate lands, find the funding fee line and check it against three facts: your use number, first or later; your down payment tier; and your exemption status on the C O E. If the percentage does not match the V A's table, ask why, out loud, before you sign anything.

The full written guide to the funding fee, with the complete table, lives in the V A Loan Knowledge Center at military realty florida dot com.

This is education, not lending advice. A V A approved lender confirms your exact numbers.

Call or text nine zero four, three zero nine, zero six zero nine.

Don't forget to like, subscribe, and hit the bell to get notifications of all our new episodes. Thanks for listening.

VA Playbook 17: Who Pays ZERO Funding Fee

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Here is the exact question: do you have to pay the V A funding fee at all, or are you one of the borrowers the V A charges exactly zero? A lot of veterans pay thousands of dollars they never owed, simply because nobody checked.

Welcome to V A Playbook, a special series from The Jacksonville Real Estate Podcast, by Military Realty of Florida. I am Mike.

The funding fee is a one time charge the V A puts on most V A loans. It helps pay for the loan guaranty program, the same program that lets you buy with no down payment and no monthly mortgage insurance. On a four hundred thousand dollar first purchase with nothing down, that fee runs two point one five percent, which is eight thousand six hundred dollars. Real money. Unless you are exempt, in which case it is zero dollars, every time.

So who pays zero? The V A publishes the list, and it is shorter than the rumors say. First, and by far the most common: you are receiving V A compensation for a service connected disability. If disability compensation is part of your monthly picture, you are exempt. There is no minimum rating called out in the rule beyond receiving that compensation, so do not talk yourself out of it because your rating feels small.

Second, you are eligible to receive that disability compensation, but you are receiving retirement pay or active duty pay instead. The V A still counts you as exempt. Third, you are a surviving spouse receiving Dependency and Indemnity Compensation, often called D I C. Fourth, you are still serving and you received a proposed or memorandum rating before your loan closing date, showing you will be eligible for compensation because of a pre discharge claim. Fifth, the Purple Heart rule: you are on active duty, and on or before your closing date you provide evidence that you received a Purple Heart.

Now hear the other side of it, because these two myths cost people money in both directions. Being on active duty, by itself, does not make you exempt. Being a first time buyer does not make you exempt. And the Purple Heart exemption is an active duty rule with paperwork attached. The evidence has to be in your file on or before the day the loan closes. If you separate before closing, your lender may need to pull a fresh C O E so your status reads correctly. Do not find that out at the closing table.

Here is the part that matters operationally in Jacksonville. Your exemption is not decided by your real estate agent, your lender's opinion, or a rumor from your last command. It shows up on your Certificate of Eligibility, your C O E. If the C O E says exempt, the funding fee line on your loan is zero, whether you are buying in Mandarin, Orange Park, or Nocatee. If it does not say exempt, you budget the fee until somebody proves otherwise. When we run files for sailors headed to NAS Jacksonville or Mayport, the C O E is the first document we ask for, and this is exactly why. An eight thousand six hundred dollar line item deserves eight seconds of reading.

One more wrinkle for folks buying mid transition. If your disability claim is still pending when you close, you may have to pay the fee now and chase a refund later. That is its own conversation, and it is the very next clip in this series, so stay close. The short version is that the effective date of your rating decides everything.

So here is your action step. Before you tour a single house, pull your C O E, or have your lender pull it, and read the funding fee line out loud. Exempt or not exempt. If you believe you qualify and the document disagrees, fix the document first, not the house hunt. That one check protects more money than most negotiations you will have this year.

The full written guide to funding fee exemptions, with the complete rate tables, lives in the V A Loan Knowledge Center at military realty florida dot com.

This is education, not lending advice. A V A approved lender confirms your exact numbers.

Call or text nine zero four, three zero nine, zero six zero nine.

Don't forget to like, subscribe, and hit the bell to get notifications of all our new episodes. Thanks for listening.

VA Playbook 18: Funding Fee Refund — Disability Awarded After Closing

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Here is the exact question: you paid the V A funding fee at closing, and months later your disability rating came through. Can you actually get that fee back? In the right fact pattern, yes, and it can be thousands of dollars.

Welcome to V A Playbook, a special series from The Jacksonville Real Estate Podcast, by Military Realty of Florida. I am Mike.

Set the scene, because this happens constantly around NAS Jacksonville and Mayport. You get out, or you are getting out. Your V A disability claim is filed but not decided. You need a house now, so you buy in Orange Park or Mandarin with a V A loan. Because your C O E did not show you exempt on closing day, you paid the funding fee. On a four hundred thousand dollar first purchase with nothing down, that fee was eight thousand six hundred dollars, and most buyers roll it into the loan without a second thought.

Then the rating letter arrives, awarding you a service connected disability rating. Here is the rule that decides whether you see that money again. You may be eligible for a refund if you are later awarded V A compensation for a service connected disability, and the effective date of that compensation is retroactive to before the date your loan closed. Two dates get compared: the effective date on your award, and the date on your closing documents. Effective date first, refund possible. Effective date after closing, the fee stays paid. Claims take months, and the V A commonly sets the effective date back to when you filed or separated, which is why so many Jacksonville buyers land in refund territory without knowing it. Read the effective date on that decision letter before you spend the back pay in your head.

Now the exception, because it catches people. If your exemption was based on a proposed or memorandum rating, and that paperwork lands after your closing date, you still owed the fee, and you are not eligible for a refund based on that rating. The refund rule runs through an actual compensation award with a retroactive effective date, not the pre discharge rating path. If your situation is tangled, that is a question for the V A regional loan center, not for a podcast.

How does the money come back? It depends on how you paid. Cash at closing, the refund comes back to you. Financed it, which most buyers do, and the refund generally runs through your loan servicer and is applied to your balance. Your payment usually does not change. Your principal quietly drops by the fee amount, and you stop paying interest on money you never should have owed. Either way, nobody mails it to you out of kindness. You have to ask.

So who do you ask? Start with the lender or servicer on your file, and the V A itself points you to its regional loan center for refund questions. Bring three things: your closing disclosure showing the fee, your rating decision letter showing the effective date, and your C O E. With those three documents, the conversation is short. Without them, it is a runaround.

One timing note for folks still in uniform. If your claim is pending and your closing is close, talk to your lender before closing day about how your file reads. Houses in Fleming Island do not hold for disability claims. Buying first and refunding later is a real path, not a loophole.

Your action step is simple. If you bought with a V A loan in the last few years and later received a disability rating, pull your decision letter tonight. Compare the effective date to your closing date. If the effective date is earlier, make the call this week. Eight thousand six hundred dollars is too much money to leave sitting in a file because nobody told you to ask.

The full written guide to the funding fee, including the refund rule and the exemption list, lives in the V A Loan Knowledge Center at military realty florida dot com.

This is education, not lending advice. A V A approved lender confirms your exact numbers.

Call or text nine zero four, three zero nine, zero six zero nine.

Don't forget to like, subscribe, and hit the bell to get notifications of all our new episodes. Thanks for listening.

VA Playbook 19: Roll the Funding Fee Into the Loan or Pay Cash?

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Here is the exact question: should you roll the V A funding fee into your loan, or pay it in cash at closing? Both are legal. Only one of them is usually smart for your situation, and the difference is bigger than it looks on the loan estimate.

Welcome to V A Playbook, a special series from The Jacksonville Real Estate Podcast, by Military Realty of Florida. I am Mike.

Ground rules first. The funding fee on a purchase is the only closing cost the V A lets you finance into the loan. Everything else gets paid at the table. You may also pay the fee in cash, or a seller can pay it as a concession, a different clip in this series. Today it is just you, the fee, and one decision. And if you are exempt, there is no fee and no decision, so check your C O E before this math applies to you at all.

Let us run it on the sample we use across this series: a four hundred thousand dollar Jacksonville purchase, first use of your benefit, nothing down. The fee is two point one five percent, eight thousand six hundred dollars. A subsequent use, by the way, jumps to three point three percent, thirteen thousand two hundred dollars, which makes this decision matter even more.

Option one, finance it. Your loan amount becomes four hundred eight thousand six hundred dollars. Cash to close drops, which is why nearly everybody does it, especially on a P C S timeline when the moving truck and the deposits all hit at once. But financed money is not free money. Run that eight thousand six hundred dollars through a sample six percent rate over thirty years, just to see the shape of it. It adds roughly fifty two dollars a month, and if the loan ran the full thirty years, you would hand back roughly eighteen thousand five hundred dollars in total payments for financing an eight thousand six hundred dollar fee. Close to ten thousand dollars of interest, riding on one line item.

Now the honest counterweight: almost nobody keeps the same loan for thirty years. People refinance, people P C S again, people sell. Out of the loan in five or six years, and the interest actually paid on the fee is a few thousand, not ten. Financing the fee is a trade: liquidity now, interest later. Make the trade with your eyes open.

Option two, pay it in cash. Your loan stays at four hundred thousand dollars even. Your payment is lower every month, your balance is lower the day you move in, and your equity is better if orders send you to Norfolk in three years and you sell into a flat market. The cost: eight thousand six hundred more dollars out of pocket at closing, on top of your other costs. If that cash is your emergency fund, leave it in the bank and finance the fee. A drained savings account is a worse problem than fifty two dollars a month.

There is also a middle play worth knowing. On a subsequent use purchase, putting five percent down drops your fee rate from three point three percent to one point five percent. Cash aimed at the down payment can shrink the fee itself, which financing never does.

Around NAS Jacksonville and Mayport, it usually shakes out like this. First tour buyers with thin reserves finance the fee and protect their savings. Buyers rolling equity from a prior duty station sale often pay cash and keep the balance clean. Neither answer is wrong. The wrong answer is signing whichever version the lender defaulted to without seeing the other one.

So your action step: before you lock, ask your lender for the closing sketch both ways, fee financed and fee in cash, same house, same rate. Two pages, side by side, pick on purpose. If a lender will not produce both, that tells you something about the lender.

The full written guide to the funding fee, with rate tables and worked local examples, lives in the V A Loan Knowledge Center at military realty florida dot com.

This is education, not lending advice. A V A approved lender confirms your exact numbers.

Call or text nine zero four, three zero nine, zero six zero nine.

Don't forget to like, subscribe, and hit the bell to get notifications of all our new episodes. Thanks for listening.

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Supporting posts for this chapter.

• 7 Questions First-Time VA Buyers Should Ask Before Choosing A Lender

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