On August 3rd, the Restoring GI Bill Fairness Act of 2011 became law and reduced the VA Funding Fee for loans closed on or after October 1st.

The fee is significantly lowered for all first time & subsequent use purchases as well as cash-out refinances. ?It is also going to be lowered again in 2012 & 2013 for subsequent use purchases with less than 5% down.

Here?s a summary of the changes:

First Time Use (Active Duty – National Guard & Reserves add 0.25%)

  • No Down Payment: Reduced from 2.15% to 1.40%
  • 5% Down or More: ?Reduced from 1.50% to 0.75%
  • 10% Down or More: ?Reduced from 1.25% to 0.50%

Subsequent Use (Less than 5% Down – Active Duty/Guard/Reserves)

  • As of 10/1/11: Reduced from 3.30% to 2.80%
  • As of 10/1/12: Reduced from 2.80% to 2.15%
  • As of 10/1/13: Reduced from 2.15% to 1.25%

Note: With 5% down or more, the first time use rates apply

Remember, if you have a VA disability rating of 10% or more, you can have the VA funding fee waived. ?If not, the funding fee does not need to be paid out of your pocket, it can be rolled into your loan amount.

Aloha veterans and thank you for your service!