There are a few exceptions that allow for the funding fee to be waived:
- Veterans who are getting VA compensation due to service related disabilities.
- Veterans who would be receiving VA compensation due to service related disabilities if they were not already receiving retirement pay.
- Loans for spouses of veterans who passed away in service or because of service related disabilities.
The amount of the VA funding fee required varies based on the amount of the down payment, whether this is the first time the borrower has taken out a VA loan, and whether the borrower served in active duty or in the reserves or National Guard.
For VA loans, borrowers who have served in active duty are categorized as either a first time user or a subsequent user.
For first time users, the fee structure is set up as follows:
- No down payment to 4.99% down payment: 2.15% fee
- 5% to 10% down payment: 1.5% fee
- More than 10% down payment: 1.25% fee
For subsequent users the fee structure is:
- No down payment to 4.99% down payment: 3.3% fee
- Up to 10% down payment: 1.5% fee
- More than 10% down payment: 1.25% fee
If you are considering taking out a VA loan in California and would be classified as a subsequent user (meaning you have already taken out a VA loan in the past), then you should strongly consider making a down payment.
For military members who have served in the active duty obtaining cash-out refinancing loans, the fee for first time users is 2.15% while the fee for subsequent users is 3.3%.
The funding fee requirement for both the Reserves and National Guard members is as follows.
For first time users, the fee structure is:
- No down payment to 4.99% Down Payment: 2.4% fee
- 5% to 10% down payment: 1.75% fee
- More than 10% down payment: 1.5% fee
For subsequent users the fee structure is:
- No down payment: 3.3% fee
- Up to 10% down payment: 1.75% fee
- More than 10% down payment: 1.5% fee
For Reserves and National Guard member cash-out refinancing loans, the fee for first time users is 2.4% while the fee for subsequent users is 3.3%.
In addition to the loans listed above, the VA requires funding fees for interest rate reduction loans, also known as IRRLs. The rate for an IRRL is currently set at .5%.
Lastly, the funding fee for a Native American Direct VA Loan is 1.25% at present, and the funding fee for a VA IRRL is .5% at this time for both first time use and subsequent use.
You may also like to Read – California Loan Limits for VA Loans
The table below summarizes the funding fees effective for loan closed between Nov 22, 2011 through September 30, 2016.
