The Fee Jumps on a Second Purchase, and Missouri Prices Make the Cure Affordable
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
This is the one VA cost a borrower can actually move, and in Missouri the move is cheaper than almost anywhere because of what houses cost here.
The rates
| Loan | Fee |
|---|---|
| First use, under 5% down | 2.15% |
| ★★ Subsequent use, under 5% down | ★★ 3.3% |
| Either use, 5% or more down | 1.5% |
| Either use, 10% or more down | 1.25% |
| Cash-out refinance | 2.15% first use, 3.3% after |
| IRRRL | 0.5% |
★★ The cliff, and the cheap way off it
Subsequent use under 5% down is 3.3%. Put 5% down and it is 1.5%: a cut of more than half for a five-percent deposit.
★ Going on to 10% only reaches 1.25%, a much smaller gain for twice the cash. So on a second VA purchase the threshold that matters is 5%, not 10%.
★★★ Missouri is close to the best state in the country to act on this, because of the price base. Five percent of the Fort Leonard Wood metro's $233,313 is a sum a mid-career service member can plausibly assemble, and in Kennett, at $95,780, five percent is a figure most households could reach. In an expensive state the same percentage is simply out of range. Every Missouri metro.
The five exemptions
- Receiving VA compensation for a service-connected disability.
- Eligible for that compensation but receiving retirement or active-duty pay instead.
- Receiving Dependency and Indemnity Compensation as a veteran's surviving spouse.
- ★★ A service member with a proposed or memorandum rating before the loan closing date.
- ★★ An active-duty member with evidence of a Purple Heart, on or before the closing date.
★★ Number 4 is a timing fact to act on: the VA's own list names a memorandum rating dated before closing, so a veteran mid-claim should find out where that paperwork sits before fixing a closing date. Number 5 is narrower than people assume. It is written for active duty, with evidence by closing.
★ Where one of these applies, the fee is not reduced. It is not charged.
★★ The Missouri overlap, and the asymmetry in it
The fee exemption asks whether you receive compensation for a service-connected disability. Missouri's property tax credit asks whether you "became one hundred percent disabled as a result of such service".
★★ So a veteran who qualifies for the Missouri credit on disability is, in practice, almost certainly fee-exempt as well. The reverse does not hold at all: a compensable rating well below 100% waives the fee and does nothing for the credit.
★★★ And note which way round this falls in Missouri. The federal benefit, the waived fee, has no income test and no captivity requirement. The state benefits both do. For a great many Missouri veterans the funding-fee waiver is the largest benefit they will actually receive. The three tests.
★ What we are not telling you
- Whether to finance the fee. That turns on a rate we do not publish.
- Any dollar figure, the fee is a percentage of the loan amount and we publish no loan or payment examples.
- Whether your rating or paperwork qualifies. That is the VA's call, not ours.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
What is the VA funding fee in 2026?
On a purchase, 2.15 percent for first use with less than 5 percent down and 3.3 percent for subsequent use with less than 5 percent down, both dropping to 1.5 percent at 5 percent or more down and 1.25 percent at 10 percent or more. Cash-out refinancing is 2.15 percent first use and 3.3 percent after, and an IRRRL is 0.5 percent.How do I cut the VA funding fee on a second Missouri purchase?
Put 5 percent down. Subsequent use under 5 percent down carries 3.3 percent and 5 percent or more reduces it to 1.5 percent, a cut of more than half. Moving to 10 percent only reaches 1.25 percent, so 5 percent is the meaningful threshold, and at Missouri prices it is an unusually reachable sum.Do I need a final VA rating to be exempt from the funding fee?
No. The VA lists a service member who has received a proposed or memorandum rating before the loan closing date as an exempt category, so the final decision is not required if that paperwork predates closing.If I qualify for Missouri's property tax credit, am I exempt from the funding fee?
Almost certainly, though they are separate tests with separate decision-makers. The fee exemption turns on receiving VA compensation for a service-connected disability, and the Missouri credit's veteran route requires becoming one hundred percent disabled as a result of service.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. Missouri's property tax exemption for former prisoners of war is established by article X, section 6 of the Missouri Constitution, and the Missouri Property Tax Credit is governed by sections 135.010 to 135.030 of the Revised Statutes of Missouri and administered by the Missouri Department of Revenue, not by Cornerstone. Proposed constitutional amendments described on this site are proposals and are not law. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.