Announcement 19-0088: Updated VA Funding Fee

December 3, 2019


VA has announced the VA Funding Fee rates for purchase and cash out refinance transactions will change effective for loan transactions closed January 1, 2020 and later.

Please note: Interest Rate Reduction Refinancing Loans (IRRRLs) are not impacted by this change.

Funding Fee Updates

Funding Fee rates are generally increasing for first time use from 2.15% to 2.30%, and for subsequent use from 3.30% to 3.60%.  Veterans making a down payment of 5% or more on purchase transactions will continue to receive a reduced Funding Fee.  Funding Fees will no longer differ for members of the Reserves and National Guard.

Type of Veteran Down Payment First-time Use Subsequent Use
Active Duty,
Reservists, and
National Guard
None 2.30% 3.60%
5 percent 1.65% 1.65%
10 percent 1.40% 1.40%

As a reminder, the reduced Funding Fee rates do not apply to refinance loans.

Impact to Applicant(s) / Borrower(s) and CMS:

VA loans that are closed prior to the close of business on Wednesday, December 31, 2019 will not be affected by the fee change.

Loans with an Estimated Closing Date or Closing Date of January 1, 2020 and later must be disclosed and underwritten using the new Funding Fee table.

As a reminder, the maximum LTV for purchase transactions is 100% plus the financed Funding Fee.  The maximum LTV for cash-out refinance transactions is 90% including any financed Funding Fee.


Please contact with any questions. Carrington thanks you for your business.

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Carrington Mortgage Services LLC
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San Antonio, TX 78269-2408

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