VA Funding Fees in Colorado: 2026 Rates and Examples
Last reviewed: September 21, 2026
The VA funding fee is a one-time cost associated with many VA home loans. It helps support the program and is separate from interest and other closing costs. Some borrowers are exempt. For Colorado buyers, understanding the applicable fee and whether it will be paid at closing or financed can help clarify the loan estimate.
What determines the funding fee?
The fee depends on the type of VA loan and the applicable program rules. For purchase loans, first or subsequent use and down payment can affect the percentage. Refinances and other loan types have their own rules. Exemption status must also be considered.
The fee is based on the applicable loan amount, rather than simply using the home’s purchase price. A down payment can change both the loan amount and the relevant purchase fee bracket.
2026 funding-fee reference table
| Loan scenario | First use | After first use |
|---|---|---|
| Purchase: less than 5% down | 2.15% | 3.3% |
| Purchase: 5% to less than 10% down | 1.5% | 1.5% |
| Purchase: 10% or more down | 1.25% | 1.25% |
| IRRRL (VA streamline refinance) | 0.5% | 0.5% |
| Cash-out refinance | 2.15% | 3.3% |
Official reference: VA funding fee and loan closing costs.
Who may be exempt?
VA lists exemptions for borrowers receiving service-connected disability compensation; those entitled to it but receiving retirement or active-duty pay instead; qualifying surviving spouses receiving Dependency and Indemnity Compensation (DIC); certain service members with a proposed or memorandum rating before closing; and active-duty Purple Heart recipients who provide evidence by closing. Your lender confirms the applicable status and documentation.
How to calculate your funding fee
Calculation concept: applicable loan amount × verified funding-fee percentage = estimated funding fee.
For an illustrative $400,000 base purchase loan, a non-exempt first-time user in the less-than-5%-down bracket has a $8,600 funding fee: $400,000 × 0.0215. Financing only that fee produces a $408,600 loan balance. A borrower who is exempt would have no funding fee. This example uses a round loan amount, not a claimed Colorado median, and excludes other costs.
If you finance the fee, you also pay interest on that additional balance. A later VA compensation award may support a fee refund when its effective date is before the loan closing; ask your lender or VA to review your case. Colorado’s veteran property-tax exemption has separate eligibility rules.
Frequently asked questions
It can generally be included in an eligible VA loan, but confirm the rules for your loan type and how it changes the balance. Other closing costs may be treated differently.
Ask your lender to confirm your eligibility and the documentation needed for the exemption.
No. They are different costs with different purposes. A transaction may have no down payment and still include a funding fee or other closing costs.
No. The applicable loan type, down payment where relevant and exemption status must be evaluated.
Talk through your Colorado scenario
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Related Colorado guides
VA loans and PCS moves in Colorado Springs
Colorado veteran property-tax exemption
How to request your VA Certificate of Eligibility
Sources checked September 21, 2026: VA eligibility, COE documents and requests, funding fees and closing costs.
