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VA Loan Funding Fees

The VA funding fee is required by law. The fee, currently 2.15% on no down payment loans for a first-time use, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users who do not make a down payment is 3.3%. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a down payment.

For purchase and construction loans, members of the regular military fall into the category of first time user or subsequent user. For first time users, no down payment requires a 2.15% fee, down payment of at least 5 percent but less than 10 percent requires a 1.5% fee, and down payment of 10% or more requires a 1.25% fee. For subsequent users, no down payment requires a 3.3% fee, down payment of at least 5 percent but less than 10 percent requires a 1.5% fee, and down payment of 10% or more requires a 1.25% fee.

For the category of Reserves / National Guard, first time users with no down payment requires a 2.4% fee, down payment of at least 5 percent but less than 10 percent requires a 1.75% fee, and down payment of 10% or more requires a 1.5% fee. For subsequent users for the category of Reserves / National Guard, no down payment requires a 3.3% fee, down payment of at least 5 percent but less than 10 percent requires a 1.75% fee, and down payment of 10% or more requires a 1.5% fee.

Cash-out refinancing loans for regular military require a 2.15% fee for first time users and a 3.3% fee for subsequent users. For Reserves / National Guard, the requirement is a 2.4% fee for first time users and a 3.3% fee for subsequent users. If there are down payments involved, refer to the information above. On interest rate reduction loans, the VA funding fee is .50% and it is 1.0% on Manufactured Home Loans.

 

THE FOLLOWING PERSONS ARE EXEMPT FROM PAYING THE VA 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.
  • 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).

**Please note that the VA has the final say on who is exempt.

As retired veterans of the 82nd Airborne Division, CSM(Ret.) King O. and Latonia Parks spent a combined 44 years serving their country.  

With their experience from countless PCS moves they founded Top Bragg Realty as a means of helping ACTIVE DUTY, RETIREES, VETERANS and each of their family members navigate the unique challenges associated with buying or selling a home in the Fort Bragg/Fayetteville and surrounding areas.  

This also includes property management for those individuals wishing to rent their home without the headaches of qualifying potential tenants as well as on-going home maintenance. They really are your "one-stop" shop for all of your Real Estate needs.

For more information about ANY other properties on the market, please feel free to contact them at 910-779-0305. 

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