Change Date

September 15, 2004, Change 4

This section has been changed to create subsection lettering and references.

a. All VA Loans

For all types of VA loans, the loan amount may include the VA funding fee. 

No other fees and charges or discount points may be included in the loan amount for regular purchase or construction loans.

Only refinancing loans may include other allowable fees and charges and discount points in the loan amount.

Note:  Maximum loan amounts are discussed in section 3 of chapter 3.

b. “Cash-out” Refinancing Loans

For “cash-out” refinancing loans, allowable fees and charges and discount points (as discussed in section 2 of this chapter) may be paid from cash proceeds of the loan, as long as total loan proceeds do not exceed 90% of the reasonable value of the property. 

Only the VA funding fee (and the cost of any energy efficiency improvements) can be added to the 90% limit to increase the loan amount.

c. IRRRLs

The following fees and charges may be included in an Interest Rate Reduction Refinancing Loan (IRRRL):

·   Any allowable fees and charges discussed in section 2 of this chapter.  This includes closing costs from the “Itemized Fees and Charges” list, the funding fee, and the lender’s flat charge.

·   However, there is one limitation unique to IRRRLs:  While the borrower may pay any reasonable amount of discount points in cash, no more than two discount points can be included in the loan amount.