San Diego VA Funding Fee May Change

San Diego County has many Active and Retired Military families looking to take advantage of VA financing. The obvious benefit is the home buyer’s ability to take advantage of 100% financing with no mortgage insurance.  Although there is no mortgage insurance, VA does charge a Funding Fee, and this amount could change.

Good news came out earlier in the year that the Veteran’s Administration funding fee for Active and Retired Military was to be reduced (See chart below).  Then an announcement was made that the decision was to be reversed.

A bill in Congress called H.R. 674 is pending Congressional Action.  This is the bill that reverts the VA funding fee on Purchase and Refinance transactions back to the existing levels.  It has currently passed the Senate, and is being considered by the House of Representatives.  The legislation would keep VA Funding Fees at it’s current level through 2016.  If the bill is not signed the proposed lower Funding Fees will be enacted.  For homeowners in San Diego County, a lower Funding Fee means a lower monthly payment each month.  Cross your fingers.

Type of Veteran/Military Status Down Payment % For First Time Use % For Subsequent Use
Veteran/Active Duty Less than 5% 2.15% 3.30%
5% or more (up to 10%) 1.50% 1.50%
10% or more 1.25% 1.25%
Reserves or National Guard Less than 5% 2.40% 3.30%
5% or more (up to 10%) 1.75% 1.75%
10% or more 1.50% 1.50%
Disabled Veteran
(service-connected disability)
n/a 0.00% 0.00%


Type of Veteran/Military Status % For First Time Use % For Subsequent Use
Veteran/Active Duty 2.15% 3.30%
Reserves or National Guard 2.40% 3.30%
Disabled Veteran
(service-connected disability)
0.00% 0.00%


Type of Veteran/Military Status % For First Time Use % For Subsequent Use
Any 0.50% 0.50%

11/21/2011 UPDATE- On November 21, 2011, the President signed H.R. 674. Section 265 of the law raises funding fees to the pre-November 18, 2011 levels. The fees specified in Section 265 are valid through September 30, 2016.

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