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Your VA funding Fee


Your VA funding Fee

When you use your VA eligibility to purchase a home, the VA charges a fee, per transaction.  This charge is called a funding fee.  The money collected from VA purchases and refinances from this funding fee goes towards the guarantee the VA provide the lenders that loan the money to you, the borrower.  The VA guarantees 25% of the loan amount for the lenders.  This guarantee allows the VA Home Loan program to offer 100% financing and no monthly mortgage insurance.

If it is your first time purchasing a home and you are or were regular military, the funding fee that will be charged to you is 2.14% of your loan amount.  If you have already used your VA eligibility to purchase a home, you will be charged what is called subsequent use, which is 3.3% of your loan amount. If you are in the reserves or National Guard, your first time use fee will be 2.4%, subsequent use is the same as regular military, at 3.3%.

If you are collecting disability from the VA, you are exempt from paying the VA funding fee.  The minimum disability rating is 10%, which would eliminate the funding fee. Even if you have received a Purple Heart, you would have to be examined by a VA doctor to determine the amount of disability to be collected from the VA.  Your Certificate of Eligibility (COE) will tell a lender if you do not have to pay the VA Funding fee.  Vamortgage.com can pull your COE electronically within a few minutes and let you know your status.

The link below is from the VA and gives the complete breakdown of all the different funding fees.

http://www.benefits.va.gov/homeloans/documents/docs/funding_fee_table.pdf