How VA funding fee changes may impact you

On October 5, 2011, President Obama signed the Veterans Health Facilities Act Capital Improvement Act, which includes provisions impacting the amount active-duty military and veterans must pay upfront for a VA loan.  

It was reported that the new funding fee structure would go into effect as of October 1, 2011.  However, under the Act, the new fees actually go into effect as of November 18, 2011.  

As a result, any loans that closed based on the lower funding fee amount between October 1, 2011 and October 5, 2011, will have the difference in the funding fee waived, according to the Secretary of the Department of Veterans Affairs.  

For those loans closing after the date the Act was signed and prior to the effective date of the funding fee change, the rates remain the same as they were prior to October 1, 2011.

The new funding fee amounts are as follows:

For first-time use

Down Payment Time Period Veteran Reservist/National Guard
Less than 5% Oct. 1, 2011-
Oct. 5, 2011
 1.40%  1.65%
  Oct. 6, 2011-
Nov. 17, 2011
 2.15%  2.40%
  On or after
Nov. 18, 2011
 1.40%  1.65%
At least 5% but
less than 10%
Oct. 1, 2011-
Oct. 5, 2011
 0.75%  1.00%
  Oct. 6, 2011-
Nov. 17, 2011
 1.50%  1.75%
  On or after
Nov. 18, 2011
 0.75%  1.00%
10% or more Oct. 1, 2011-
Oct. 5, 2011
 0.50%  0.75%
  Oct. 6, 2011-
Nov. 17, 2011
 1.25%  1.50%
  On or after
Nov. 18, 2011
 0.50%  0.75%

For second-time use

Down Payment Time Period Veteran Reservist/National Guard
Less than 5% Oct. 1, 2007-
Oct. 1, 2011
 3.30%  3.30%
  Oct. 1, 2011-
Oct. 5, 2011
 2.80%  2.80%
  Oct. 6, 2011-
Nov. 17, 2011
 3.30%  3.30%
  Nov. 18, 2011-
Oct. 1, 2012
 2.80%  2.80%
  Oct. 1, 2012-
Oct. 1, 2013
 2.15%  2.15%
  On or after
Oct. 13, 2013
 1.25%  1.25%
At least 5% but
less than 10%
Oct. 1, 2011-
Oct. 5, 2011
 0.75%  1.00%
  Oct. 6, 2011-
Nov. 17, 2011
 1.50%  1.75%
  On or after
Nov.18, 2011
 0.75%  1.00%
10% or more Oct. 1, 2011-
Oct. 5, 2011
 0.50%  0.75%
  Oct. 6, 2011-
Nov. 17, 2011
 1.25%  1.50%
  On or after
Nov.18, 2011
 0.50%  0.75%

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