VA Funding Fee Explained

The VA Funding Fee is paid directly to the Department of Veteran’s Affairs and is the reason they can guarantee this no-money-down loan program. This fee is paid so that VA eligibile borrowers can enjoy loan benefits such as $0 down financing and no mortgage insurance (PMI) payments.

VA Funding Fee Chart

The Funding Fee is calculated by looking at 4 different factors: Loan type (Purchase or Refinance), type of service, down payment (if any) and prior VA loan use. Take a look at the charts below to determine the amount of your VA Funding Fee.

 

                                                  Purchase First Time Use

 

Down Payment                        Active Duty/Retired                         Guard/Reserve

$0 Down                                  2.15%                                                 2.40%

5-10% Down                             1.50%                                                 1.75%

10% or More                             1.25%                                                 1.50%

 

                                                 Purchase Additional Use

 

Down Payment                       Active Duty/Retired                          Guard/Reserve

$0 Down                                 3.30%                                                 3.30%

5-10% Down                            1.50%                                                 1.75%

10% or More                            1.25%                                                 1.50%

 

                                                Cashout Refinance

 

VA Usage                               Active Duty/Retired                          Guard/Reserve

1st Time Use                           2.15%                                                 2.40%

Additional Use                       3.30%                                                 3.30%

 

                                                IRRL (Interest Rate Reduction Loan)

 

VA Usage                              Active Duty/Retired                           Guard/Reserve

1st Time Use                          0.5%                                                   0.5%

Additional Use                      0.5%                                                   0.5%

 

How the Funding Fee is Paid

The VA Funding Fee is typically included in the loan, but can also be paid by the seller or by the borrower at the closing table.

VA IRRL

A VA IRRL is a refinance of an existing VA mortgage. If you are refinancing from any other loan type that is not VA, the loan cannot be an IRRL and standard underwriting guidelines, funding fees, appraisal requirements and termite inspection will apply.

VA Funding Fee Exemption

Borrowers are exempt from paying the funding fee if they receive any disability payments from the VA or are considered at least 10% disabled.

For More Information Call  619-264-5611

If you have any questions about your VA loan benefit, the Funding Fee, Funding Fee Exemptions or how the VA Funding Fee chart works please contact Bill Marshall.