Buying a home is getting less expensive for Veterans. Effective for Veteran Affairs (VA) loans closed on or after October 1, 2011, the VA funding fee will change. According to VA Circular 26-11-12, changes in the VA funding fee are prompted by the passage of Public Law 112-26, Restoring GI Bill Fairness Act of 2011, and other previous legislation. The following chart is a list of the current and new VA funding fees scheduled to take effect on October 1, 2011.
*Includes “Cash-Out” Refinancing Loans More information on mortgages for Veterans.
Use/Purpose | Down Payment | Active Duty Veteran | Reservist/National Guard | ||
Current | New | Current | New | ||
| First Time | Less than 5%* | 2.15% | 1.40% | 2.40% | 1.65% |
| First Time | 5% - 9.99% | 1.50% | 0.75% | 1.75% | 1.00% |
| First Time | 10% or more | 1.25% | 0.50% | 1.50% | 0.75% |
| Subsequent | Less than 5%* | 3.30% | 2.80% | 3.30% | 2.80% |
| Subsequent | 5% - 9.99% | 1.50% | 0.75% | 1.75% | 1.00% |
| Subsequent | 10% or more | 1.25% | 0.50% | 1.50% | 0.75% |
| Interest Rate Reduction | N/A | 0.50% | 0.50% | 0.50% | 0.50% |
| Assumptions | N/A | 0.50% | 0.50% | 0.50% | 0.50% |