Overview of the VA Loan Program

Costs of Obtaining a VA Loan

FUNDING FEE

A basic funding fee of 2.15 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent downpayment will reduce it to 1.25 percent.

A funding fee of 2.40 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.75 percent and a 10 percent downpayment will reduce it to 1.5 percent.

The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.

Veterans who are using entitlement for a second or subsequent time who do not make a downpayment of at least 5 percent are charged a funding fee of 3.3 percent.

NOTE: For all VA home loans, the funding fee may be paid in cash or it may be included in the loan.

OTHER CLOSING COSTS

Reasonable closing costs may be charged by the lender. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among lenders and also throughout the nation because of differing local laws and customs.

• VA appraisal
• Credit report
• Loan origination fee (usually 1 percent of the loan)
• Discount points
• Title search and title insurance
• Recording fees
• State and/or local transfer taxes, if applicable
• Survey

No commissions, brokerage fees or "buyer broker" fees may be charged to the veteran buyer.

NEED MORE INFORMATION ABOUT VA LOANS?

Veterans seeking more detailed information concerning the VA home loan program may request VA Pamphlet 26-4 or VA Pamphlet 26-6 from the nearest VA office. Loan Guaranty personnel at that office will also be pleased to answer specific questions and provide any other assistance they can.

Remember, VA-guaranteed financing is a benefit which Congress intended eligible veterans should have. If you are a veteran homebuyer or know of one, it makes sense to look into the VA loan program as a good way to finance a home purchase.

Overview of the VA Loan Program

1. Five Easy Steps to a VA Loan
2. About VA Home Financing
3. Uses for a VA Home Loan
4. Who is Eligible for a VA Loan?
5. Entitlements and Restorations
6. How to Get a VA Loan
7. Costs of Obtaining the Loan