q. Calculation of the Funding Fee

Apply the appropriate funding fee percentage to any portion of the loan allocable to a veteran using his or her entitlement who is not exempt from the funding fee.  Determine the appropriate percentage for the type of veteran involved from the funding fee tables in section 8 of chapter 8 of this handbook.

Example:  On a no-down payment loan to three veterans; one a first-time homebuyer, one a subsequent user, and one a first-time reservist; funding fee percentages of 2.0%, 3.0%, and 2.75%, respectively, would each be applied to one-third of the loan amount.

No funding fee will be assessed on any portion of a joint loan allocable to

·   a nonveteran

·   a veteran who did not use his or her entitlement, or

·   a veteran who used his or her entitlement, but is exempt from the funding fee.

Downpayment:  The actual loan amount is allocated equally between the borrowers for purposes of calculating the funding fee, whether or not a down payment is made, and regardless of where the funds for such a down payment come from.

Example:  On a veteran/nonveteran loan, the nonveteran makes a $5,000 (5%) down payment out of his cash resources, to purchase a $100,000 property, resulting in a $95,000 loan amount.  The veteran is a first-time homebuyer.  The veteran must pay a funding fee of $712.50, based on 1.5% of his/her $47,500 portion.

If situations arise which are not addressed here, contact VA for assistance.