Just for the record, the VA Loan is also referred to as the GI Bill of Rights through the Servicemen’s Readjustment Act. The said bill, which provides veterans with a federally guaranteed home without the need for them to shoulder the down payment, was signed into law by the then President Franklin D. Roosevelt.
The main purpose of the VA Loan, of course, is to offer housing assistance to the veterans and their families. This helped pave the way for millions of veterans to make their dreams of owning a house a resounding reality.
Aside from being arguably the most helpful program in history to improve the welfare of its recipients, the GI Bill is also notable for helping in the economic development of the country.
How Much Is The VA Funding Fee?
Now, side by side with the VA Loan is the VA funding fee, which is required by law. This fee, which at present is slated at 2.15 percent on no down payment loans for a person who is using it for the first time, is charged to let the veterans who make use of the VA home loan to actually contribute in the cost of the said benefit.
This would spell out fairness to everyone because it means that the cost other taxpayers have to pay for it is actually reduced. Meanwhile, the VA funding fee for second time users is 3.3 percent if they do not make a down payment prior to that.
The reason for a higher percentage of fee for second timer users is that these veterans already had the chance to avail of the VA loan before, and they also had enough time to already save up for a down payment.
The VA fee and the down payment required are determined by quite a number of factors. For instance, there are a few options for members of the regular military who want to take advantage of purchase and construction loans. It’s no down payment and a 2.15 percent fee; or up to 10 percent down payment with a 1.5 fee; or 10 percent and above down payment with a 1.25 percent fee.