Posts from February 3rd, 2020
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What You Need to Know About Using a VA Loan in 2020
VA home loans provide a fantastic opportunity for veterans and their families to put a solid foundation under their financial future. There are some changes to the VA home loan program that make it easier for soldiers, sailors, and airmen to purchase a home. These changes will affect loan limits, fees, and other elements of the program that our REALTORS® want you to know about and think over before you apply.
Funding Fees Rise for Some Borrowers
The funding fee for VA home loans is rising to 2.30% for first-time active duty borrowers, which is a slight increase over the 2.15% it is at currently. This change will go into effect on January 1, 2021, so there is still plenty of time to purchase a home before it affects borrowers. On the other side of the coin, Purple Heart recipients who are still on active duty will no longer have to pay the funding fee starting on January 1, 2020. The subsequent use fee is also rising. It is currently set at 3.3% but will increase to 3.6% on January 1, 2020.
The Funding Fees are based on a sliding scale for regular military personnel based on their down payment.
| Down Payment | Fee for First-Time Home Buyers | Fee for Subsequent Use |
| 0% | 2.3% | 3.6% |
| 5-10% | 1.65% | 1.65% |
| >10% | 1.4% | 1.4% |
Further, the Blue Water Navy Vietnam Veterans Act of 2019 streamlines the funding fees for all military personnel. Starting January 1, 2020, National Guard, reservists, and active-duty personnel will be subject to the same funding fees without distinction to which branch they serve.