Veterans Benefits Administration FUTURE FUNDING FEE CHANGE
Veterans Benefits Administration Circular 26-11-17
Department of Veterans Affairs November 4, 2011
Washington, DC 20420
FUTURE FUNDING FEE CHANGES
1. Purpose. This circular discusses the possibility of future funding fee changes for
Department of Veterans Affairs (VA) home loans.
2. Funding Fee Rates.
VA funding fee rates, including rates for loans closed on or after November 18, 2011.
As noted in the circular, absent Congressional action, funding fees for most loans will
decrease on November 18, 2011. A subsequent circular,
VA Circular 26-11-16, datedOctober 13, 2011, provided guidance for refunds of overages paid when a Good Faith
Estimate was issued prior to the enactment of the law reestablishing rates at a higher
level. The circular also noted that VA believed it likely that Congress would make
additional changes to funding fees in the near future.
3. Possibility of Congressional Action. VA believes it is highly likely that
Congress will pass a bill keeping funding fees at their present level. If a bill is passed
and signed into law, the funding fees will not decrease as scheduled on November 18,
2011. VA is closely monitoring the situation and will post notices on our website and
Funding Fee Payment System page, as well as issue a circular, as soon as we receive
definite information.
4. Lender and VA Actions. VA understands lenders cannot issue a Good Faith
Estimate based on what a funding fee rate “might” be going forward. However, we
feel it is important to alert lenders of the strong possibility of impending action by
Congress on this issue. Furthermore, the refund procedures described in VA Circular
26-11-16 will not automatically carry over for future changes. VA will evaluate the
situation when the law does change and decide what action to take. We hope this
advance notice will allow lenders to make the appropriate decisions. We regret the
series of changes to funding fees in a relatively short period of time, and appreciate
the flexibility lenders have shown in dealing with this matter.
Circular 26-11-17 November 4, 2011
5. Rescission: This circular is rescinded on October, 1, 2012.
By Direction of the Under Secretary for
Benefits
Michael J. Frueh
Acting Director, Loan Guaranty Service
Distribution: CO: RPC 2021
SS (26A1) FLD: VBAFS, 1 each (Reproduce and distribute based on RPC 2021)
