VA Releases Funding Fee Update

Today VA release a cicular which provides a “circular” route to a funding fee discount. This may not be over November 18 either.   The previous chart on fees was located in our 9-19-2011 posting.  Just scroll down to review that chart.

Veterans Benefits Administration Circular 26-11-15

Department of Veterans Affairs October 6, 2011

Washington, DC 20420

UPDATED FUNDING FEE CHANGES

1. Purpose. The President signed H.R. 2646, Veterans Health Facilities Act Capital

Improvement Act of 2011 on October 5, 2011. The bill includes a provision resulting in

funding fees reverting to the same rates that existed prior to October 1, 2011 for loans

closed October 6, 2011 through and including November 17, 2011. Rates for loans

closed prior to enactment of H.R. 2646 and for loans closed on or after November 18,

2011 are discussed below.

2. Fee Changes

a. Loans closed October 1 through October 5, 2011: Funding fees for loans closed on

these dates will be those cited in the Department of Veterans Affairs (VA) Circular 26-

11-12, dated September 8, 2011.

b. Loans closed October 6 through and including November 17, 2011: Funding fees

for loans closed during this period, will be the same rates in effect prior to October 1,

2011. The fees can be found in the VA Lender’s Handbook, Chapter 8, Topic 8.

c. Loans closed on or after November 18, 2011: Funding fees for loans closed on or

after November 18, 2011 will be reduced as shown on the attached Exhibit A.

d. Funding fees for other loans: Funding fees for Interest Rate Reduction Refinancing

Loans (IRRRLs) and Assumptions will not change. They will remain at .50 percent.

3. Possibility of Future Funding Fee Changes. VA believes it likely that Congress will

pass other legislation in the coming weeks that will make additional changes to the

funding fee structure. Should this occur, VA will immediately publish a notice on

http://www.benefits.va.gov/homeloans

and the VA Funding Fee Payment System (FFPS), and

release another Circular once any such bill becomes law.

Lenders should closely monitor VA FFPS for information on funding fee changes

4. Waiver of the Difference in Funding Fees. For cases in which lenders have closed

loans based on lower funding fees cited in the Good Faith Estimate (GFE) rather than the

higher fees provided in HR 2646, the Secretary, under existing authority, will waive the

difference in the fees. Specifically, VA will waive the right to collect the difference in

fees (between the lower October 1 rates and the higher H.R. 2646 rates) for loans for

which a GFE was prepared prior to October 6 based on the lower fees, and that was

closed after the enactment of H.R. 2646. Instructions

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2 Responses to VA Releases Funding Fee Update

  1. thanks a lot for nothing says:

    this really sucks. i was going to save about 2 grand. this makes no sense why this was pushed back.

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