N.B: On the day before I published this, HR 674 passed, reverting the funding fee amounts to the “old” levels. It was updated in VA Circular 26-11-19, published November 22, 2011. The “new” lower funding fee schedule was in effect for three days, from Nov 18-21. Sorry for the confusion.
The Veterans Administration lowered the funding fee it charges, to insure loans made to active-duty or retired military personnel. The new funding fee schedule distinguishes first-time users and repeat users and between active-duty, reservists, prior military.
Can you use your VA loan guaranty benefit more than once?
Of course you can. The VA even allows for two outstanding loans (under certain circumstances) but generally, veterans can only have one VA loan outstanding. A common misunderstanding is that a veteran can only use a VA loan once. The benefit can be used as many times as the veteran wishes.
Can you still get a zero-down VA home loan, again?
Indeed you can. The new funding fee schedule, for zero-down loan purchases, is only 1.40% for first-time users who are active-duty veterans and 1.65% for reservist/guardsmen veterans. Zero-down home loans, for the second and subsequent VA home loans, require a 2.8% funding fee for all veterans: active duty, reservists, and guardsmen.
Can you lower the funding fee if you use a down payment?
Yes you can. If veteran home buyers put 5% down, with a VA loan, the funding fee drops to .75% for active duty veterans (1.0% for reservists and guardsmen). For a 10% down payment, the funding fee drops to .5% for active-duty veterans and .75% for reservists and guardsmen.
Here is a list of the current and new VA funding fees scheduled to take effect on November 18, 2011.
|
Use/Purpose |
Down Payment |
Active Duty Veteran |
Reservist/National Guard |
||
| Old | New | Old | 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% |
