Written by Randy Whetsell
If you are buying a home near Fort Campbell with a VA-backed purchase loan in 2026, the VA funding fee may be one of your largest upfront financing costs.
For most eligible buyers purchasing with less than 5% down, the fee is:
- 2.15% for first use of the VA loan benefit
- 3.30% for subsequent use
- 1.50% with a down payment of 5% to less than 10%
- 1.25% with a down payment of 10% or more
Some buyers are exempt and pay no VA funding fee, including qualifying borrowers receiving VA compensation for a service-connected disability, certain active-duty Purple Heart recipients, and surviving spouses receiving Dependency and Indemnity Compensation, or DIC.
On a Clarksville-area purchase near the August 2026 RealTracs median of approximately $325,000, that difference can represent several thousand dollars. Planning for it early helps you compare loan options, estimate cash-to-close, and make a confident offer.
What is the VA loan funding fee?
The VA funding fee is a one-time charge associated with many VA-backed home loans. The fee helps support the VA loan program, which generally allows qualified borrowers to purchase a primary residence without a down payment or monthly private mortgage insurance.
The fee is calculated as a percentage of the loan amount. It is not automatically calculated on the full purchase price if you make a down payment.
You may either:
- Finance the funding fee into your VA loan, or
- Pay it at closing
For a purchase loan, the funding fee is generally the only closing cost you can add to the loan amount. Other expenses, such as lender fees, title charges, prepaid taxes, insurance, and recording fees, typically must be handled separately according to your lender’s requirements.
For the official rate charts and current exemption rules, review the VA funding fee and loan closing costs guidance.
How much is the VA funding fee in 2026?
For VA-backed purchase and construction loans, the applicable rate depends primarily on your down payment and whether you have used the VA home loan benefit before.
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to less than 10% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
These percentages apply to borrowers who are not exempt from the fee.
“First use” generally means your first use of a VA-backed or VA direct home loan for a purchase. “Subsequent use” generally applies when you have previously used the benefit for a purchase or construction loan.
Your lender should confirm how your prior VA loan history affects the fee. If your previous VA loan was used only to purchase a manufactured home, VA guidance may still treat your next purchase as first use.
How much could the funding fee cost on a $325,000 Clarksville home?
The following examples use an approximate $325,000 purchase price, consistent with the August 2026 RealTracs median referenced for the Clarksville market. These are illustrations, not loan quotes.
First VA use with no down payment
If the loan amount is $325,000:
- $325,000 × 2.15% = $6,987.50
- Estimated loan balance if financed: $331,987.50
Subsequent VA use with no down payment
If the loan amount is $325,000:
- $325,000 × 3.30% = $10,725
- Estimated loan balance if financed: $335,725
Five percent down payment
A 5% down payment on $325,000 is $16,250, leaving a loan amount of $308,750.
- $308,750 × 1.50% = $4,631.25
- Estimated loan balance if financed: $313,381.25
Ten percent down payment
A 10% down payment on $325,000 is $32,500, leaving a loan amount of $292,500.
- $292,500 × 1.25% = $3,656.25
- Estimated loan balance if financed: $296,156.25
These examples show why your down payment strategy matters. A larger down payment may reduce the funding fee, but it also uses cash that could otherwise remain available for moving expenses, reserves, repairs, furniture, or future PCS needs.
Does the VA funding fee apply to every VA buyer?
No. Some eligible borrowers do not pay the funding fee.
You may be exempt if one of the following applies:
- You are receiving VA compensation for a service-connected disability.
- You are eligible to receive VA compensation for a service-connected disability but receive retirement or active-duty pay instead.
- You are a surviving spouse receiving DIC.
- You have a qualifying proposed or memorandum rating before closing based on a pre-discharge claim.
- You are an active-duty service member who received a Purple Heart and provide evidence of it on or before closing.
The Purple Heart exemption has an important qualification. The official VA guidance specifically addresses an active-duty member of the Armed Forces who provides evidence of receiving a Purple Heart by the closing date. A separated veteran with a Purple Heart may need to qualify under another exemption, such as eligibility for service-connected disability compensation.
If you believe you qualify for an exemption, tell your lender early. Documentation and timing can affect how the fee appears on your loan estimate and closing documents.
Can the funding fee be refunded?
In some circumstances, yes. If you are later awarded VA compensation for a service-connected disability and the effective date of that compensation is retroactive to before your loan closing, you may qualify for a refund.
A proposed or memorandum rating received after closing does not necessarily create refund eligibility. Because the rules depend on your specific VA decision and effective date, contact the VA or your lender if you believe a refund may apply.
Do not assume a refund will happen automatically. Confirm the status of your claim and loan directly with the appropriate VA resource.
Should you finance the funding fee or pay it upfront?
Financing the fee preserves cash at closing, which can be valuable for a Fort Campbell move. You may need funds for inspections, earnest money, prepaid insurance, temporary lodging, utility deposits, household goods, and initial repairs.
However, financing increases your loan balance. You will pay interest on that amount over time, and it can slightly increase your monthly principal-and-interest payment.
Paying the fee upfront may reduce the amount you borrow, but it uses cash that could be important for your financial reserves.
Ask your lender to show you both scenarios:
- The monthly payment and total loan balance with the fee financed
- The cash-to-close and monthly payment if you pay the fee upfront
Then compare the long-term cost with your expected time in the home, available savings, interest rate, and upcoming military or family expenses.
Can the seller pay the VA funding fee?
Seller-paid costs may be negotiable as part of your purchase contract, depending on the property, market conditions, lender guidance, and VA rules.
The VA allows sellers or builders to offer credits for certain buyer closing costs. VA guidance also distinguishes between ordinary closing-cost credits and seller concessions, which are subject to specific limits.
Before requesting a seller credit for the funding fee, ask your lender and real estate professional to structure the language correctly. The credit should also make sense in the context of the Clarksville market and the seller’s willingness to negotiate.
A strong offer is not based only on purchase price. The closing date, inspection terms, appraisal provisions, financing strength, and requested credits can all affect how a seller evaluates your offer.
What should Clarksville and Fort Campbell buyers budget besides the funding fee?
A zero-down VA loan can reduce the amount you need for the down payment, but you should still prepare for other expenses, including:
- Earnest money
- Home inspection
- Appraisal-related costs
- Title and settlement fees
- Homeowners insurance
- Prepaid property taxes and insurance
- Recording charges
- Moving and storage expenses
- Immediate maintenance or repairs
- HOA dues, if applicable
- Additional funds if the appraisal does not support the contract price
Your lender’s Loan Estimate will provide a more detailed picture of projected costs. Review it carefully and ask questions about every fee you do not recognize.
Location also affects your overall budget. A home in Clarksville, Oak Grove, or Hopkinsville may have a different commute, tax structure, insurance cost, neighborhood profile, and resale outlook. A property that is close to one Fort Campbell gate may not be convenient for your duty location or daily schedule.
What should you do before making an offer?
Start with a lender preapproval and ask for a written estimate of your funding fee. Confirm whether you are making first or subsequent use of the VA benefit and whether you may qualify for an exemption.
Then review the local search with a real estate professional who understands the Clarksville–Fort Campbell market. Haus’s guide, How Do VA Loans Work in Clarksville TN?, explains eligibility, preapproval, appraisals, inspections, and the general purchase process.
You can also compare the Tennessee and Kentucky sides of the Fort Campbell area before selecting a property. Commute time, primary-residence requirements, property condition, and future relocation plans should all be part of the decision.
How can a Clarksville VA loan Realtor help?
A knowledgeable local Realtor can help you evaluate more than the list price. Your agent can help you:
- Compare Clarksville, Oak Grove, and Hopkinsville neighborhoods
- Consider your preferred Fort Campbell gate and commute
- Review offer terms and seller-credit requests
- Coordinate inspections and appraisal deadlines
- Identify property-condition concerns
- Communicate with your lender and closing professionals
- Adjust the search if your PCS timeline changes
The VA funding fee is only one part of the purchase decision. Your complete budget should account for the monthly payment, taxes, insurance, maintenance, commute, and the cash you want to retain after closing.
If you are planning a VA purchase near Fort Campbell, contact Haus to discuss your Clarksville or Tennessee–Kentucky home search. Our experienced team is committed to providing personalized guidance through each step of your move.
This article is for general educational purposes and is not mortgage, legal, tax, or financial advice. VA funding-fee rates, exemption requirements, lender standards, interest rates, and local market conditions may change. Confirm your specific fee and eligibility with a VA-approved lender and review current information directly through the U.S. Department of Veterans Affairs.
