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VA Funding Fee
(Lender’s Handbook, paragraph 8.08)
The law requires that VA be paid a funding fee on guaranteed loans. The only exceptions
are loans made to:
- Veterans receiving VA compensation for service-connected disabilities.
- Veterans who would be entitled to receive compensation if they were not receiving military retirement pay.
- Loans made to surviving spouses of veterans who died in service or from service-connected disabilities.
Veterans whose entitlement is based on active duty will pay a 2.15% fee on their first VA loan and 3.30% on all future loans for the purchase of a home or cash-out refinances.
Veterans whose entitlement is based on Guard/Reserve service will pay 2.40% on their first loan and 3.30% on all future loans for the purchase of a home or cash-out refinances.
A down payment will reduce the amount of the funding fee (see chart).
The funding fee on VA Assumptions and Interest Rate Reduction Refinance Loans is currently 0.5%. This rate remains unchanged regardless of the number of times it is used.
VA funding fee must be paid within 15 days of closing.
The funding fee may be financed into the loan amount (over and above the appraised value of the property).
| VA FUNDING FEE SCHEDULE | |||
| Loan Type | Required Down Payment | Active Duty Personnel and Veterans | National Guard and Reservists |
| First Time Use of VA Loan Guaranty Benefits | |||
| Purchase/Construction | 0% down 5% down 10% down |
2.15% 1.50% 1.25% |
2.40% 1.75% 1.50% |
| Regular Cash Out Refinance | 2.15% | 2.40% | |
| Second or subsequent use of VA Loan Guaranty Benefits | |||
| Purchase/Construction | 0% 5% 10% |
3.30% 1.50% 1.25% |
3.30% 1.75% 1.50% |
| Regular Cash Out Refinance | 3.30% | 3.30% | |
| VA FUNDING FEE SCHEDULE (CONT’D) | ||
| Loan Type | Active Duty Personnel and Veterans | National Guard and Reservists |
| All Interest Rate Reduction Refinance Loans | 0.50% | 0.50% |
| Native American Direct Loans | 1.25% | 1.25% |
| Manufactured (Mobile) Home Loans | 1.00% | 1.00% |
| Assumptions** | 0.50% | 0.50% |
| Vendee Loans | 2.25% | 2.25% |
**This pertains to loans originally closed on or after March 1, 1988. There is no funding fee required for assumption of loans closed prior to March 1, 1988.
Lenders must use the Funding Fee Payment System at www.pay.gov/va to remit funding fee payments and to request refunds of payments made in error.
History :: The Complete Lenders Training Guide :: General Rules For Eligibility :: VA Eligibility Center :: Military Records Centers :: Restoration of Entitlement :: Maximum Loan Amount :: Eligible Loan Purposes :: Interest Rate Reduction Refinance Loans :: Cash Out/Other Refinancing Loans :: Refinance Comparison Chart :: Energy Efficient Mortgages :: Joint Loans :: Farm Residence Loans/Adjustable Rate Mortgages :: Prior Approval Loans :: Guaranty :: Appraisal Assignments :: Special Adapted Housing :: VA Repossessed Properties :: Income Verification :: Assets :: Debts and Obligations :: CAIVRS :: Credit Analysis :: Compensating Factors :: Completing VA Form 26-6393 :: Maintenance and Utility Guidelines :: Automated Underwriting Systems :: Closing Packages :: Seller Concessions :: VA Funding Fee :: Guaranty Procedures :: Quality Review :: VA Forms :: Acronyms :: VA Training Broadcasts :: Jurisdiction Codes :: Regional Loan Centers :: VA Loan Number :: Contacting VA
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