Is the VA funding fee tax deductible in 2026? Yes. Starting with the 2026 tax year, the VA funding fee is treated like an upfront mortgage insurance premium and can be itemized on Schedule A — a meaningful change for service members buying near Fort Eisenhower in Columbia County, GA.
If you're a service member, veteran, or surviving spouse preparing to buy a home in Evans (30809), Grovetown (30813), Martinez (30907), Harlem (30814), or anywhere else in the Augusta metro this year, the rules around the VA funding fee just shifted in your favor. The fee itself didn't drop, but how the IRS treats it did — and the difference can amount to real money at tax time. Here's what changed, what it means for your closing costs, and how Columbia County buyers should plan around it.
What is the VA funding fee, and why does it exist?
The VA funding fee is a one-time charge paid to the Department of Veterans Affairs on most VA-backed home loans. It keeps the VA loan program self-sustaining so taxpayers aren't on the hook for borrower defaults, and it's the reason VA loans can offer zero down payment, no private mortgage insurance, and competitive rates that most conventional buyers can't touch.
For most first-time VA buyers putting nothing down, the fee in 2026 is 2.15% of the loan amount. On a $325,000 purchase in Grovetown, that's about $6,988. On a $475,000 purchase in Evans, it's roughly $10,213. Subsequent-use buyers (anyone who's used a VA loan before) pay a higher rate — 3.30% with no down payment — unless they're exempt.
You can pay the fee at closing or roll it into the loan. Most buyers roll it in. That keeps cash-to-close low, but it means you'll pay interest on the fee over the life of the loan.
What changed for 2026
Two updates matter for buyers closing this year.
1. The funding fee is now tax deductible
For the 2026 tax year, the IRS allows you to deduct the VA funding fee as an upfront mortgage insurance premium on Schedule A (Form 1040), the same way private mortgage insurance has historically been treated for some borrowers. You'll need to itemize to claim it, which means your total itemized deductions need to exceed the standard deduction for your filing status to make it worth it.
For a first-time E-7 buyer in Evans rolling a $10,000 funding fee into the loan, the deduction could meaningfully reduce your federal tax bill — but the exact savings depend on your bracket and whether you itemize. Talk to a tax professional before counting on a specific number. (You can read the IRS guidance at VA.gov's funding fee page.)
2. The 2026 fee schedule is unchanged from 2025
Despite some speculation last fall, the funding fee percentages themselves held steady. First-use rates remain:
0% down: 2.15% of loan amount
5%–9.99% down: 1.50%
10%+ down: 1.25%
That matters because some buyers were waiting for a fee cut that didn't come. If you've been sitting on the sidelines hoping the math would improve, the math is the math. The opportunity now is on the property side — Columbia County inventory is sitting at roughly seven months of supply, and Augusta-metro sellers are accepting price reductions on about 83% of listings, according to recent regional market reporting (see Redfin's Columbia County data).
Who's exempt from the VA funding fee entirely
You don't pay the fee at all if you fall into one of these categories:
Veterans receiving compensation for a service-connected disability
Veterans who would be entitled to disability compensation if they weren't receiving retirement or active-duty pay
Active-duty service members who have received the Purple Heart (with documentation in your loan file before closing)
Surviving spouses of service members who died in service or from a service-connected disability
If any of those apply to you, your lender should pull your Certificate of Eligibility and confirm the exemption is reflected. It's worth double-checking — the exemption gets missed more often than it should, and you don't want to discover it three days before closing.
What this means for Fort Eisenhower buyers
Most active-duty buyers reporting to Fort Eisenhower this PCS cycle will fall into the first-use, no-down-payment category. Here's how the 2026 changes translate to common Columbia County price points:
$275,000 Grovetown townhome — funding fee ~$5,913 (deductible if itemizing)
$325,000 Grovetown single-family — funding fee ~$6,988 (deductible if itemizing)
$400,000 Martinez/Evans — funding fee ~$8,600 (deductible if itemizing)
$475,000 Evans median — funding fee ~$10,213 (deductible if itemizing)
Actual tax benefit depends on your filing status, income, and whether your total itemized deductions exceed the standard deduction. Consult a tax professional.
A few practical takeaways:
You can structure offers around seller-paid closing costs. With Columbia County leaning toward a buyer's market, asking sellers to contribute toward closing — including the funding fee — is reasonable. The VA allows sellers to pay up to 4% of the loan amount in concessions, which on most local price points more than covers the funding fee.
A small down payment moves the needle. Going from 0% down to 5% drops your fee from 2.15% to 1.50%. On a $400,000 purchase in Evans, that's $2,600 in savings. If you have the cash and don't need it for moving expenses, the math often pencils out.
Roll-in vs. pay-at-closing depends on your timeline. If you plan to stay in the home five-plus years, rolling the fee into the loan is fine — the cash flow advantage usually outweighs the long-term interest cost. If you might sell or refinance inside three years, paying at closing saves money.
Pairing the fee update with current Augusta-area conditions
The 2026 environment is genuinely friendlier for buyers than the last few PCS cycles have been. A few data points worth knowing as you plan:
30-year mortgage rates in the Augusta market have been hovering in the low- to mid-6% range through May 2026, per Bankrate's Georgia tracker. VA rates typically run slightly below conventional.
Days on market in Evans have stretched to roughly 87 days, compared to 47 a year ago — meaning more time to negotiate and inspect rather than rushing.
Inventory is up across the county, particularly in established subdivisions like Mullins Crossing, West Lake, River Island, and Cambridge in Evans, and Crawford Creek and Tillery Park in Grovetown.
Fort Eisenhower's expansion — $1.6 billion in new construction through 2028, bringing roughly 17,000 additional personnel — is creating sustained demand pressure that should support resale values in Columbia County over a typical assignment cycle.
FAQ
Can I roll the VA funding fee into my loan and still deduct it on taxes in 2026?
Yes. Rolling the fee into your loan amount doesn't change its deductibility for the 2026 tax year. You'd still claim it as an upfront mortgage insurance premium on Schedule A, regardless of whether you paid it in cash at closing or financed it.
How do I know if I'm exempt from the funding fee?
Your Certificate of Eligibility (COE) shows your exemption status. If you have a service-connected disability rating, are a Purple Heart recipient, or are a qualifying surviving spouse, you're exempt. Your lender will pull the COE during pre-approval — flag any exemption claim early so it gets documented before closing.
Is the VA funding fee higher for second-time buyers in Columbia County?
Yes. First-use buyers with no down payment pay 2.15%; subsequent-use buyers pay 3.30%. A 5%+ down payment lowers both tiers. If you've used a VA loan before — even years ago at a previous duty station — you're in the subsequent-use category.
Planning your purchase around the 2026 changes
The new tax treatment doesn't change your buying decision, but it does change the after-tax cost of using your VA benefit this year. Combined with a softer Columbia County market and Fort Eisenhower's continued growth, 2026 is a reasonable year to buy if your timeline and finances line up.
If you're PCSing to Fort Eisenhower this summer, relocating to support the medical district at Augusta University, or moving in from out of state and trying to figure out where in Columbia County to start your search, you don't have to sort all of this out alone. I've walked hundreds of military families and relocating professionals through the process — from the first COE pull to the final walkthrough — and I can help you build an offer strategy that uses every advantage the 2026 rules give you.
Moving to Fort Eisenhower? Call or text Noah McBride at 706.701.5940 — I've helped hundreds of military families find their home here.
Best regards,
Noah McBride | Broker | The McBride Team | 706.701.5940 | Guiding you home.
