Written By: Stacey Sprain
As anticipated for quite some time, VA finally formally announced changes to VA funding fee structure that will be effective for VA loans not closed on and after 10/01/2011-See VA Circular 26-11-12. On the positive side is that the funding fees are decreasing which is great news for our U.S. veterans! Lower funding fees may give a boost to VA home loan financing products and allow them to be more competitive with the record-low interest rates on other programs.
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The new funding fee structure looks like this:
Veteran Reservist/
National Guard
First Time Use of Entitlement-Purchases
Downpayment 0 - 4.99%
Through 9/30/2011 2.15% 2.40%
Effective for closings on and after 10/01/2011 1.40% 1.65%
Downpayment 5 - 9.99%
Through 9/30/2011 1.50% 1.75%
Effective for closings on and after 10/01/2011 0.75% 1.00%
Downpayment >=10%
Through 9/30/2011 1.25% 1.50%
Effective for closings on and after 10/01/2011 0.50% 0.75%
Subsequent Use of Entitlement-Purchases
Downpayment 0 - 4.99%
Through 9/30/2011 3.30% 3.30%
Effective for closings 10/01/2011-09/30/2012 2.80% 2.80%
Effective for closings 10/01/2012-09/30/2013 2.15% 2.15%
Effective for closings after 9/30/2013 1.25% 1.25%
Downpayment 5 - 9.99%
Through 9/30/2011 1.50% 1.75%
Effective for closings on and after 10/01/2011 0.75% 1.00%
Downpayment >=10%
Through 9/30/2011 1.25% 1.50%
Effective for closings on and after 10/01/2011 0.50% 0.75%
First Time Use of Entitlement - Cash-Out Refinance Loans
Through 9/30/2011 2.15% 2.40%
Effective for closings on and after 10/01/2011 1.40% 1.65%
Subsequent Use of Entitlement - Cash-Out Refinance Loans
Through 9/30/2011 3.30% 3.30%
Effective for closings 10/01/2011-09/30/2012 2.80% 2.80%
Effective for closings 10/01/2012-09/30/2013 2.15% 2.15%
Effective for closings after 9/30/2013 1.25% 1.25%
All Interest Rate Reduction Refinance Loans (IRRRL) 0.50% 0.50%
(Unchanged)
Assumptions (Unchanged) 0.50% 0.50%
Need FHA Training? CLICK HERE: http://www.FHA-Classes.org
Also from VA
VA Circular 26-11-11 announced that effective on and after 9/12/2011, Certificates of Eligibility will include a new field entitled “Funding Fee” near the top of the COE. One of three statuses will be reflected in that field- “Exempt”, “non-exempt” or “Contact RLC.” By having the funding fee status shown on the COE, lenders will no longer be required to fax the Department of Veterans Affairs (VA) Form 26-8937, Verification of VA Benefits, to a VA office for processing in most cases. There will still be instances where faxing VA Form 26-8937 is necessary, but the majority of FF exemption determinations will be processed internally and displayed on the COE.
About The Author
Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at: contact@mortgageprocessor.org.
