VA Loan Funding Fee

02 Oct VA Loan Funding Fee

– Good News for Purple Heart Recipients –

by Scott Oelke, www.VegasValleyRealtor.com

15 Years Full-time Experience

Copyright, All Rights Reserved

How’s this sound:  no down-payment, no closing costs, no mortgage insurance, and a great rate?  Sound too good to be true?  It’s not.  At least not for some Veterans and active-duty military.  Here’s the skinny.

As of 1 January 2020, certain changes were implemented to VA loans.  Before these changes, the only people who were exempt from the VA Funding Fee were qualified* Vets with a VA-approved disability of 10 percent or more.  That’s the key—only Veterans, separate military, not active duty—were eligible for the funding fee exemption.  Now, with these changes, active-duty Purple Heart recipients who qualify are eligible to have the funding fee waived—no VA-approved disability required.  (“Duh! You can’t qualify for any VA benefits until you separate.”)

Why is this a big deal?  Because it can save you some serious cabbage.  If you’re a first-time VA loan user, the funding fee is 2.3 percent of the loan amount.  On a $300,000 loan, that’s $6,900.  This gets tacked on to your purchase price, increasing you loan.  For second-time (and subsequent) users, the funding fee is 3.6 percent.

Other VA-approved fees still apply, but none come close to the funding fee.  It’s always wise to do your homework and compare rates and fees among various lenders.  Remember, the VA does not actually loan money; it guarantees the loans.  (In the loan industry, they say the VA is a “guarantor,” not an “originator.”)  Fees and rates vary among lenders, though all must abide by VA guidelines.  Best to shop around.

Need a great agent?  Contact me directly (702-232-7070).  I’d love to help you buy the home you love.  Or sell the one you’ve got.  J

*Qualify means you are eligible for a VA loan per the VA guidelines.