latest updates

VA loans 2020

recent
changes

updated July, 2020
Whether you’re looking to purchase or refinance, VA loans offer flexible terms and some of the lowest interest rates on the market. In fact, according to Ellie Mae, in 2019 VA loans were 23 basis points lower than their conventional loan counterparts. Moreover, the average credit score was also lower — 709 compared to 753 for conventional loans.

what's new.
as of January 2020

no more loan limits.

No minimum down payment is required and you can access to up to 100%  of the equity in your home.

new funding fee structure.

Funding fees are now  broken up into three categories based on your down payment: 0%, 5% and 10%.

credit score minimums.

While there is no minimum credit score set by the VA, individual lenders do set preferences. The current COVID-19 adjusted score is 620.

equal funding fees.

All service members will now pay equal amount in funding fees, whether you’re a veteran, on active-duty, a National Guard, or are otherwise eligible for VA benefits.

funding fee exemptions.

If you’re a recipient of the Purple Heart or if you’re otherwise entitled to VA compensation, you do not have to pay any funding fees.

how the VA funding
fees work.

what determines my funding fee?

  1. the type of VA loan you’re getting
  2. the total loan amount
  3. whether it’s your first time using your VA benefits
  4. the percentage of your down payment

when do I have to pay?

You can pay this fee at the time of closing, in full, or you can amortize it into your total loan (meaning you can pay for it over the life of your loan).

  • your lender will charge interest on the total amount borrowed, including the funding fee, closing costs, etc.
  • the funding fee is on top of the total loan amount, so it you’re accessing 100% equity you will be borrowing a little bit more than the total value of the home

who is exempt from Funding fees?

  • you receive or are eligible to receive VA compensation for a service-related disability
  • you’re an active-duty service member who has received the Purple Heart on or before your closing date
  • before your loan closes, you have a memorandum rating that confirms that you’re eligible for compensation due to a pre-discharge claim
  • you’re the surviving spouse of a Veteran who died as a result of service or who is completely disabled and you are receiving Dependency and Indemnity Compensation (DIC)
funding fee

Rate Chart

purchase &
construction

0–5%
down payment
first-time use: 2.3%
subsequent use: 3.6%
5–10%
down payment
first-time use: 1.65%
subsequent use: 1.65%
10%+
down payment
first-time use: 1.4%
subsequent use: 1.4%

cash-out & interest
rate reduction
refinancing

cash-out
first-time use
2.3%
cash-out
subsequent use
3.6%
irrrl
interest rate reduction refinance loan
0.5%

Native American direct loan (NADL)

purchase
1.25%
refinance
0.5%
side note:
down payment amount & previous use will not impact your funding fee

exceptions &
other loan types

manufactured homes
1%
loan assumptions
0.5%
vendee loan
buying a VA-acquired property
2.25%

Frequently asked questions

For a VA Cash-Out you will be required to submit income documents, bank statements, tax returns, as well as establish candidacy through a Certificate of Eligibility (COE) or DD-214. You will also need to get a credit report and an appraisal. For a VA IRRRL, there is much less paperwork required and no appraisal necessary. However, you cannot have made more than one payment more than 30 days past due for the last 12 months.

VA Loans typically take 50 days from start to closing. A VA IRRRL, or VA Streamline, usually takes less than a month as it does not require as much paperwork nor does it require an appraisal. 

Note: some processes take longer as a consequence of shutdowns and backlogs from COVID-19. However, this has not affected VA loans more than any other loan types.

Because VA loans are all funded by different lenders, each comes with its own set of terms, rates, and fees. In fact, an inquiry into 2019 applications found that VA Loans had the widest spread between the lowest and highest quote of any mortgage type. 

Scroll to Top