The VA Funding Fee in Hawaii: 2026 Percentages, Exemptions, and What It Costs on an Oahu Price
The VA funding fee is the one-time charge that replaces PMI on a VA loan \u2014 2.15% on first use with $0 down in 2026, 3.3% on subsequent use, 1.5% or 1.25% with a down payment, 0.5% on an IRRRL, and waived for disabled veterans. Here is what it costs at Hawaii prices.
By Jay Miller — NMLS #657301 · Branch NMLS #2475890 · CMG Home Loans, Honolulu · U.S. Army veteran · author of Zero Down in Paradise · Updated September 14, 2026
The VA Funding Fee in Hawaii
The VA funding fee is a one-time charge, paid to the VA, that replaces monthly mortgage insurance on a VA loan. In 2026 it is 2.15% of the loan amount for a first-use purchase with less than 5% down, 3.3% for subsequent use, and it drops to 1.5% or 1.25% with a down payment. It can be financed into the loan, and it is waived entirely for veterans receiving VA disability compensation. On a Hawaii-sized loan the dollar figure is large — which is exactly why the exemption and the down-payment tiers are worth understanding before you sign.
The 2026 funding fee table
| Situation | First use | Subsequent use |
|---|---|---|
| Purchase, less than 5% down | 2.15% | 3.3% |
| Purchase, 5% to 9.99% down | 1.5% | 1.5% |
| Purchase, 10% or more down | 1.25% | 1.25% |
| IRRRL (streamline refinance) | 0.5% | 0.5% |
| Cash-out refinance | 2.15% | 3.3% |
| Loan assumption | 0.5% | 0.5% |
These percentages took effect April 7, 2023 and remain in force for 2026. Verify against VA.gov before relying on them.
What it costs at Hawaii prices
| Oahu purchase, $0 down | First use (2.15%) | Subsequent use (3.3%) |
|---|---|---|
| $700,000 | $15,050 | $23,100 |
| $900,000 | $19,350 | $29,700 |
| $1,100,000 | $23,650 | $36,300 |
Three ways Hawaii buyers manage that number:
- Finance it. Nearly everyone does. The fee is added to the loan balance, so a $0-down purchase still closes with $0 down. It does raise the payment slightly — roughly $120 a month on a $19,350 fee at recent rates.
- Put 5% down. On a $900,000 purchase, $45,000 down cuts the first-use fee from 2.15% to 1.5% — a $5,775 reduction — and on subsequent use from 3.3% to 1.5%, a $16,200 reduction. For repeat VA users with savings, this tier is often the best money in the transaction.
- Ask the seller. The funding fee can be paid through seller concessions, which on a VA loan can run up to 4% of the price on top of normal closing costs. See seller concessions in Hawaii.
Who is exempt
You pay no funding fee if you are:
- Receiving VA disability compensation, or entitled to it but drawing retirement or active-duty pay instead
- An active-duty service member who has received the Purple Heart
- A surviving spouse of a veteran who died in service or from a service-connected disability, or who was totally disabled
The exemption is confirmed on your Certificate of Eligibility. If your disability rating is pending at closing, the fee is charged and refunded once the rating is granted with an effective date before closing — keep the paperwork.
Funding fee versus PMI
The funding fee is often criticized as expensive, so compare it to what it replaces. On a $900,000 conventional purchase with 5% down and a 740 credit score, PMI runs about 0.48% of the loan per year — roughly $340 a month until you reach 20% equity, or about $20,000 over five years, with $45,000 down. The VA borrower pays a one-time 2.15% ($19,350), financed, with $0 down and no monthly insurance ever. Over a typical Hawaii hold, the VA structure wins on both cash to close and total cost; the VA vs. conventional comparison walks the full picture.
And since tax year 2026, the funding fee may be deductible as mortgage insurance — details in Is your VA funding fee tax deductible?.
Frequently asked questions
How much is the VA funding fee in 2026? 2.15% first use / 3.3% subsequent use with less than 5% down; 1.5% with 5–9.99% down; 1.25% with 10% or more; 0.5% on an IRRRL.
Who is exempt? Veterans receiving VA disability compensation, active-duty Purple Heart recipients, and eligible surviving spouses.
Can the funding fee be financed? Yes, and most Hawaii buyers finance it. Sellers may also pay it as a concession.
Is the funding fee refundable? Only if you were exempt at closing but charged anyway — typically a disability rating granted later with an earlier effective date.
Read the full guide: VA Loans in Hawaii: The Complete 2026 Guide.
Jay Miller · NMLS #657301 · Branch NMLS #2475890 · CMG Home Loans, Honolulu · U.S. Army veteran · author of Zero Down in Paradise: The Hawaii VA Loan Playbook for Military Homebuyers (ISBN 979-8-9963553-0-3, Amazon). About Jay · NMLS Consumer Access.
Equal Housing Lender. Educational content only — not a commitment to lend and not an offer of credit; approvals are not guaranteed. A $0-down VA purchase requires VA eligibility, sufficient entitlement, and lender approval. Program rules, fees, and limits change; verify current figures with VA.gov and FHFA.
Last Updated: September 14, 2026