VA loans: eligibility and funding fee

Who is eligible for a VA loan?

Eligibility comes from service. The VA’s minimum active-duty requirements depend on when you served. Some examples from the VA’s eligibility page:

• Service members: at least 90 continuous days on active duty.
• Veterans who served from August 2, 1990, to the present: at least 24 continuous months, or the full period (at least 90 days) for which you were called to active duty, or 90 days if discharged under a qualifying exception, or less than 90 days if discharged for a service-connected disability.
• Other periods (Vietnam, Korean War, WWII, the post-Vietnam era and others) have their own thresholds, mostly 90 or 181 days.

National Guard members qualify with, for example, at least 90 days of qualifying active-duty service or 6 creditable years in the Guard; Reserve members with at least 90 days of non-training active duty or 6 creditable years in the Selected Reserve. Some surviving spouses can also get a COE. You prove eligibility with a Certificate of Eligibility (COE), which also shows your entitlement. Check your own period of service on the VA’s page.

Is there a down payment, a loan limit or a minimum credit score?

• Down payment. The VA says the guaranty, in most cases, allows you to buy with no down payment.
• Loan limit. The VA explains that a basic entitlement of $36,000 on your COE means you have full entitlement and no VA loan limit, as long as you can afford the loan and the appraisal supports the price. For a loan above $144,000, the VA guarantees up to 25% of the loan amount. The lender still decides how much you can afford from your credit history, income, debts and assets. The maximum loan on a property is the appraised value or purchase price, whichever is lower.
• Credit score. The VA does not require a minimum credit score, but some lenders do. Compare more than one lender.
• Closing costs. On a purchase you can finance only the VA funding fee into the loan. You must pay all other fees at closing. Sellers can offer credits, but the VA limits seller’s concessions to no more than 4% of the home’s reasonable value (the figure on your VA Notice of Value).

How much is the VA funding fee in 2026?

The funding fee is a one-time payment, calculated as a percentage of the loan amount, not the purchase price. The VA’s rate chart (effective April 7, 2023, and still posted as of October 2026) for purchase and construction loans for Veterans, active-duty service members, and National Guard and Reserve members is:

Other loan types: cash-out refinances 2.15% on first use and 3.3% after; interest rate reduction refinancing loans (IRRRL) 0.5%; manufactured home loans (not permanently affixed) 1%; loan assumptions 0.5%; Native American Direct Loan 1.25% for purchase. If you only used a VA loan before to buy a manufactured home, you still pay the first-time rate.

You can pay the fee at closing or finance it into the loan.

Worked examples

These are examples, not quotes. The fee applies to the loan amount, after your down payment.

The VA gives its own example: a first-time user buying a $200,000 home with $10,000 down (5%) pays 1.5% of the $190,000 loan, or $2,850.

Who is exempt from the funding fee?

You do not pay the 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 receive Dependency and Indemnity Compensation (D.I.C.) as a surviving spouse of a Veteran.
• You are a service member with a proposed or memorandum rating, issued before the closing date, saying you are eligible for compensation because of a pre-discharge claim.
• You are an active-duty member who provides evidence, on or before closing, that you received a Purple Heart.

If you are later awarded compensation effective before your closing date, you may be eligible for a refund. A rating received after closing does not qualify for a refund.

How does it compare with other loans?

A VA loan has no monthly mortgage insurance and, in most cases, no required down payment, while FHA loans charge monthly premiums and a conventional loan with under 20% down generally carries private mortgage insurance. The VA funding fee is a one-time cost, and if you finance it, it adds to your balance. Compare the Loan Estimate from each lender. See how much down payment you need and private mortgage insurance.

Where states differ

The VA guaranty, funding fee and exemptions are the same in every state. States differ in closing costs, transfer taxes, property taxes and property tax rules, which state law sets. See closing costs in Texas and California, and each state’s first-time buyer programs.