FHA Loan

The Department of Veteran Affairs recently announced in VA Circular 26-11-12 that the VA Funding Fee will go lower for loans closed on or after October 1, 2011. This is great news and will save Orange County Veterans using VA financing thousands of dollars over the next year. All VA loans are potentially subject to a “Funding Fee”, which helps to pay for VA’s ability to guaranty Zero Down financing for Active Duty and Retired Military personnel.  In Orange County, CA a Veteran can purchase a home for up to $700,000 with no down payment. The VA loan limits for Orange County will remain at $700,000 through the end of 2011.

VA Funding Fee Comparison Chart

Below is a chart comparing the Funding Fee for VA loans closed prior to October 1, 2011, and loans closed on or after October 1, 2011.

It is important to note that in some cases the Funding Fee can be waived altogether. For Veterans who have military related disabilities, rated to at least “10%”, the Funding Fee can be waived.

VA Funding Fee Example for Orange County Veteran

The Funding Fee can be financed into the loan, which is what most VA loan borrowers do.  For example, a Veteran purchasing a home in Irvine for $700,000, and using their VA eligibility for the first time, would be subject to a 2.15% Funding Fee based on the “prior to October 1″ fee percentage. This equates to a Funding Fee of $15,050 and a total VA loan of $715,050. But with the new Funding Fee percentage of only 1.4%, the Funding Fee is $9,800, with a total VA loan of $709,800. That is a savings of $5,250. It also effects the payment slightly, to the tune of $25 per month.

VA Loan PreApproval is the First Step for Orange County Veterans

The first step in determining how the VA Funding Fee will benefit your ability to purchase a home is to contact a local, Orange County, CA VA loan specialist who can prepared custom loan scenarios based on a combination of what you “qualify” for, what you can actually “afford”, and how much payment you are “comfortable” with. The loan scenarios will give you a complete breakdown of the purchase price, loan amount, payment, and amount needed to close, if any.  If everything looks good, then its time to gather your income and asset documentation and get “Preapproved” for a VA loan.