VA Funding Fee
VA Funding Fees is a fee charged by the Department of Veteran Affairs not your mortgage lender. Your mortgage lender collects the fee as part of the loan process but send the fee to the VA. The fee is to offset the liability and administrative charges of managing the va loan program. The VA does not offer home loans, but they do offer the lenders that provide loans, a guarantee if the veteran defaults on the loan, the lender will get paid by the VA.
By offering to do this, the lender does not require the buyer to purchase Private Mortgage Insurance, also known as PMI. This saves the veteran $50-$150 per month and reduces the monthly payment!
The VA Funding fee can be paid as part of the closing fees or it can be financed as part of the loan. Most military veterans buy homes with little or no down payment so they prefer to finance the fee.
The VA Funding fee is based on the sales price of the home.
Example $200,000 X 3.30% = $6,600 VA Funding fee
First time users of VA Loan benefits (Purchase / Construction Loans)
| |
Active duty/Retired |
Guard/Reserve |
0 down payment |
2.15% |
2.40% |
5-10% down payment |
1.50% |
1.75% |
10% or more down payment |
1.25% |
1.50% |
Additional use of VA Loan benefits (Purchase / Construction Loans)
| |
Active duty/Retired |
Guard/Reserve |
0 down payment |
3.30% |
3.30% |
5-10% down payment |
1.50% |
1.75% |
10% or more down payment |
1.25% |
1.50% |
VA Cash Out Refinance
| |
Active duty/Retired |
Guard/Reserve |
1st Time Users |
2.15% |
2.4% |
Additional Uses |
3.3% |
3.3% |
VA Interest Rate Reduction Refinance Loan (IRRRL)
| |
Active duty/Retired |
Guard/Reserve |
1st Time Users |
0.50% |
0.50% |
Additional Uses |
0.50% |
0.50% |
VA Funding Fee Exemptions
There are three exemptions to the VA funding fee.
- If the Veteran is receiving disability compensation from the Department of Veteran Affairs, the fee is waived.
- If the veteran WOULD be receiving VA compensation but is receiving retirement pay instead, the fee is waived.
- A surviving spouse of a veteran whom died in service or from a service connected disability, the fee is waived.
As with any circumstance the VA is the final authority and can choose to make determinations on a case by case basis.
VA Certificate
If you do not have your VA certificate, you can either apply to the Department of Veteran Affairs in writing and wait 2-4 weeks, or you can apply online and let a veteran loan officer get you an electronic certificate within minutes.
Visit our va certificate website for more information
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VA Loans
