VA Allowable & Non-Allowable Fees

HANG ON TO THIS LIST! 🙂

Veterans are one of the best types of buyers in the market place, with zero money down payment required up to 636,150, in OC and LA counties. However you can go above that loan amount with just a small down payment, usually less than 5% as well, and the rates are slightly better for VA loans and very few hits for lower FICO scores. Also, if the Veteran has ANY monthly disability income, the 2.15% first time use, usually financed VA Funding Fee (VA’s MI) is waived! 🙂 Here are the fees that are allowed and not allowed. The non-allowables can be paid by the seller or the Lender, or the Realtor. First the Non-Allowables:

VA Non-Allowable Fees:

  • Application and Processing Fees*
  • Document Preparation Fee*
  • Underwriting Fee*
  • Loan Closing or Settlement Fee*
  • Notary Fees*
  • Interest Rate Lock-in Fee*
  • Tax Service Fee*
  • Delivery/Wire Fees*
  • Commitment or Marketing Fees*
  • Trustee’s Fees or Charges*

VA Allowable Itemized Fees and Charges:

  • Appraisal Fee and Compliance Inspection
    • Reconsideration of value if requested by Veteran
  • Attorney Fee only if attorney was independently retained by the veteran
    • Veteran and Co-Borrower must execute a Veteran’s Attorney Certification
  • Closing Protection Letter Fee- Should not exceed $35.00 Page
  • Credit Report
  • Flood Certification Fee
  • Flood Insurance- If required
  • VA Funding Fee (unless veteran is exempt)
  • Homebuyer Assistance Program
    • Fees may not exceed $250.00 without approval
  • Hazard Insurance
  • HOA dues (prorated)
  • Loan Discount (must be able to prove discount points with rate sheet)
  • Loan Origination Fee (may not exceed 1% of the loan amount)*
  • MERS registration fee- reasonable and customary
  • Pest Inspection (Termite)- refinance transactions only, not allowed on purchase transactions
  • Prepaids (interest, taxes, assessments, etc.)
  • Recording Fees/Taxes
  • Recording of Warranty Deed
  • Septic Inspection
  • Survey (Condo loans must check with the underwriting department)
  • Taxes
    • Purchase- the portion of the taxes, assessments and similar items for the current year chargeable to the borrower and initial
    • Refinance- All
  • Tax Stamps
  • Title Endorsement-applicable environmental protection lien endorsements
  • Title Examination/Search
  • Title Insurance
  • Well Inspection

*If you do not see a fee on the “Allowable” list, assume that VA does NOT allow the veteran to pay.

Hang on to this list. Escrow companies have this list usually, but it does not hurt to forward over to them when you open a VA escrow. 🙂

All the best,

Don