Facts and Information about the VA Funding Fee
In order to defray the cost of administering the VA home loan program, each veteran must pay a funding fee to VA at loan closing. Unless exempt from the fee, each veteran must pay a funding fee to VA.
For all types of VA loans, the loan amount may include the VA funding fee.
VA Funding Fee Exemptions
Who is Exempt from Paying the Funding Fee?
The following persons are exempt from paying the funding fee:
- Veterans receiving VA compensation for service-connected disabilities.
- Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.
- Veterans who are rated by VA as eligible to receive compensation as a result of pre-discharge disability examination and rating.
- Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).
The VA home loan funding fee is required by law and differs for different down payment amounts and whether the VA loan is a first or consecutive one.
VA Funding Fee Table
Good through 09/30/2011
| Regular Military Members | ||
|---|---|---|
| First-time | No down payment | VA funding fee of 2.15% |
| Second time | No down payment | VA funding fee of 3.30% |
| First and consecutive time | Up to 10% down payment | VA funding fee of 1.50% |
| More than 10% down payment | VA funding fee of 1.25% | |
| Reserves / National Guard | ||
| First-time | No down payment | VA funding fee of 2.40% |
| Second time | No down payment | VA funding fee of 3.30% |
| First and consecutive time | Up to 10% down payment | VA funding fee of 1.75% |
| More than 10% down payment | VA funding fee of 1.50% | |
| Cash-out refinance for regular military | ||
| First-time | VA funding fee of 2.15% | |
| Consecutive time | VA funding fee of 3.30% | |
| Cash-out refinance for reserves/national guard | ||
| First-time | VA funding fee of 2.40% | |
| Consecutive time | VA funding fee of 3.30% | |
| VA IRRRL (Interest Rate Reduction Loan) | VA funding fee of 0.50% | |
| VA Manufactured Home Loans | VA funding fee of 1.00% | |
First Time Use
The funding fee for an initial VA loan, with no down payment is 2.2 percent for a veteran of active duty and 2.4 percent for persons qualifying solely on Reserve or Guard duty.
The funding fee for an initial VA loan with no down payment, is 2.15 percent for a veteran of active duty and 2.4 percent for persons qualifying solely on Reserve or Guard duty.
The funding fee for a VA loan closed before October 1, 2011, with a down payment of greater than 5 but less than 10 percent is 1.5 percent for a veteran of active duty and 1.75 percent for persons qualifying solely on Reserve or Guard duty.
The funding fee for a VA loan closed before October 1, 2011, with a down payment of greater than 10 percent is 1.25 percent for a veteran of active duty and 1.50 percent for persons qualifying solely on Reserve or Guard duty.
NATIVE AMERICAN DIRECT LOANS
Native American Direct VA Loan funding fee is 1.25 percent
VA ASSUMPTIONS
The Funding Fee for a VA Assumptions is 0.5 percent.
Subsequent Use:
- The funding fee for a subsequent VA loan with no down payment, for both veterans of active duty and Reserve/Guard, increases to 3.3 percent for loans closed on or after January 1, 2004 through September 30, 2011.
- The funding fee for a VA loan closed before October 1, 2011, with a down payment of greater than 5 but less than 10 percent is 1.5 percent for a veteran of active duty and 1.75 percent for persons qualifying solely on Reserve or Guard duty.
- The funding fee for a VA loan closed before October 1, 2011, with a down payment of greater than 10 percent is 1.25 percent for a veteran of active duty and 1.50 percent for persons qualifying solely on Reserve or Guard duty.
The down payment is computed on the sales price. When a sales price is above the reasonable value of the property, as determined by the VA, the portion of the down payment attributable to reducing the VA to reasonable value may be used to calculate the fee. In cases involving partial entitlement, the down payment required to permit sale of the VA loan in the secondary market also counts toward the 5- or 10-percent down payment for funding fee calculation.
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