VA FUNDING FEE REQUIREMENT 

The law requires that VA be paid a funding fee with guaranteed VA loans. The only exceptions are VA loans made to veterans receiving VA compensation for service-connected disabilities, or who, but for receipt of retirement pay, would be entitled to receive compensation, and VA loans made to surviving spouses of veterans who died in service or from service-connected disabilities.

First Time Use

1. The fee for an initial VA loan, with no downpayment, closed on or after January 1, 2004 and up until September 30, 2004, is 2.2 percent for a veteran of active duty and 2.4 percent for persons qualifying solely on Reserve or Guard duty.
2. The fee for an initial VA loan with no downpayment, closed on or after October 1, 2004 through September 30, 2011, is 2.15 percent for a veteran of active duty and 2.4 percent for persons qualifying solely on Reserve or Guard duty.
3. The funding fee for a VA loan closed before October 1, 2011, with a downpayment 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.
4. The funding fee for a VA loan closed before October 1, 2011, with a downpayment 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 Fee for a VA Assumptions is 0.5 percent.

Subsequent Use:

1. The fee for a subsequent VA loan with no downpayment, 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. **
2. The funding fee for a VA loan closed before October 1, 2011, with a downpayment 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.
3. The funding fee for a VA loan closed before October 1, 2011, with a downpayment 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.
4. ** Temporary Funding Fee Increase: The law increases the funding fee from 3.3 percent to 3.35 percent for subsequent loans with less than a five percent down payment closed during Fiscal Year 2007 (October 1, 2006 – September 30, 2007).

The downpayment is computed on the property sales price. When a sales price is above the reasonable value of the property, as determined by the VA, the portion of the downpayment attributable to reducing the VA loan amount to reasonable value may be used to calculate the fee. In cases involving partial entitlement, the downpayment required to permit sale of the VA loan in the secondary market also counts toward the 5- or 10-percent downpayment for funding fee calculation.

IRRL 

The funding fee for an IRRL remains at 0.5 percent.

Cash Out Refinance Loans