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VA Loan Funding Fee

By: Grant Moon 08/27/12 09:17 pm

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VA Loan Funding Fee

 

The VA Loan funding fee is a fee that is required by the VA for the VA Home Loan Program. The purpose of the funding fee is to off-set the cost of providing the VA Loan benefit.

Eligible veterans and service members with a disability rating from the VA and receive compensation are eligible to have the fee waived. The highest funding fee percentage is b 3.3% of the value of the loan therefore having the fee waived can be a substantial savings.

The VA Loan funding fee can be financed into the total loan amount for the veteran. The below tables provided by the VA give the funding fee amounts based on category of service and number of usage.

Purchase and Construction Loans

Type of Veteran Down Payment First Time Use Subsequent Use for loans from 1/1/04 to 9/30/2011
Regular Military None5% or more (up to 10%)10%or more

2.15%

1.50%

1.25%

   3.3%  *

1.50%

1.25%

Reserves/Guard None5% or more (up to 10%)10% or more

2.4%

1.75%

1.5%

   3.3%  *

1.75%

1.5%

 Note: The funding fee for regular military first time use from 1/1/04 to 9/30/04 is 2.2 percent.  This figure drops to 2.15 percent on 10/1/04.

Cash-Out Refinancing Loans

Type of Veteran

Percentage for First Time Use

Percentage for Subsequent Use

Regular Military 2.15% 3.3%  *
Reserves/National Guard 2.4% 3.3%  *

 

 

 

* The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home loan.

Other Types of Loans

Type of Loan Percentage for Either Type of Veteran  Whether First Time or Subsequent Use
Interest Rate Reduction Refinancing Loans

.50%

Manufactured Home Loans

1.00%

Loan Assumptions

.50%

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