VA Loans.
With more than 25.5 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.
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Benefits of VA Loans
- No down payment required
- Sellers are typically allowed to pay all of the Veterans closing costs
- No PMI
- VA loans are assumable by Non-Veterans
- No per-payment penalty
Request More Information on VA Mortgages
Funding Fee Chart
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VA loans do require an up front funding fee, unless the Veteran has been discharged with a disability:
| Type of Veteran | Down Payment | First Time Use | Subsequent Use for loans from 1/1/04 to 9/30/2011 |
| Regular Military | None 5% or more (up to 10%) 10% or more | 2.15% 1.50% 1.25% | 3.3% * 1.50% 1.25% |
| Reserves/ National Guard | None 5% or more (up to 10%) 10% or more | 2.4% 1.75% 1.5% | 3.3% * 1.75% 1.5% |
| Cash-Out Refinancing Loans |
| Type of Veteran | Percentage for First Time Use | Percentage for Subsequent Use |
| Regular Military | 2.15% | 3.3% * |
| Reserves/National Guard | 2.4% | 3.3% * |
| * The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home loan. |
| Other Types Of Loans | ||
| Type of Loan | Percentage for Either Type of Veteran Whether First Time or Subsequent Use | |
| Interest Rate Reduction Refinancing Loans | .50% | |
| Manufactured Home Loans | 1.00% | |
| Loan Assumptions | .50% |
Note: The funding fee for regular military first time use from 1/1/04 to 9/30/04 was 2.2 percent. This figure dropped to 2.15 percent on 10/1/04. If you have a service connected disability that you are compensated for by the VA or if you are a surviving spouse of veteran who died in service or from service connected disabilities, the funding fee is waived.
