The following fees are allowable.
| · Lender's 1% Flat Charge - Maximum 1% of the loan amount - The lender’s flat charge is intended to cover all of the lender’s costs and services which are not reimbursable as “itemized fees and charges.” For Interest Rate Reduction Refinancing Loans (IRRRLs), this fee may not exceed 1 percent of the existing VA loan balance of the loan being refinanced PLUS the cost of any energy efficient items LESS any cash payments from the veteran. · Actual Cost of Itemized Fees and Charges From Third Party Services:- A veteran may pay reasonable and customary amounts for the following services. Whenever these itemized fees relate to services performed by a third party, the veteran MAY ONLY PAY the actual amount charged by the third party. o Appraisal and Compliance Inspection Fee required for loan application o Credit Report Fee o Recording Fee o Survey Fee o Flood Zone Determination Fee o Title Examination and Title Insurance o Special Mailing Fees for Refinancing Loans o Mortgage Electronic Registration System (MERS) Fee · Real Estate Taxes · Home Owners Insurance |
The following fees CAN NOT be charged to the VA borrower:
This list is LARGER - The following fees must be covered by the lender out of the 1% Flat Fee charge. If an origination fee is charged, lenders may NOT assess veterans any other fees, other than the allowable fees listed above. If an origination fee is not charged, the lender may assess other fees as long as the aggregate amount does not exceed one percent of the loan.
· Lender’s appraisals – when the lender or seller request reconsideration of value (not when the appraisal is required for loan application per above).
· Lender’s inspections, except in construction loan cases
· Loan closing or settlement fees
· Document preparation fees
· Preparing loan papers or conveyance fees
· Attorney’s services charged by the lender. This DOES NOT include attorney charges for title work and/or veteran seeking independent legal representation.
· Photographs
· Interest rate lock-in fees
· Postage and other mailing charges, stationery, telephone calls, and other overhead
· Amortization schedules, pass books, and membership or entrance fees
· Escrow fees or charges
· Notary fees
· Commitment fees or marketing fees of any secondary purchaser of the mortgage and preparation and recording of assignment of mortgage to such purchaser
· Trustee’s fees or charges
· Loan application or processing fees
· Fees for preparation of truth-in-lending disclosure statement
· Fees charged by loan brokers, finders or other third parties whether affiliated with the lender or not
· Tax service fees
· Brokerage Fee - Fees or commissions charged by a real estate agent or broker in connection with a VA loan
· Prepayment Penalties - A veteran refinancing his or her existing mortgage cannot use loan proceeds to pay prepayment penalties of the existing lien. A veteran who purchases a property with a VA loan cannot pay prepayment penalties required to be paid by the seller as a payoff requirement on existing liens.
· HUD/FHA Inspection Fees for builders - If the veteran is purchasing proposed construction in which the dwelling was constructed under HUD supervision, the cost of any inspections or re-inspections must be borne by the builder or sponsor and CANNOT be charged to the veteran-purchaser. This includes:
o Re-inspections by VA or HUD of onsite or offsite work for which an escrow agreement was established, and any additional re-inspections deemed necessary by VA to assure conformity with VA regulations.
As you can see from the list above, it's always a good idea to use a realtor familiar with the needs of the VA borrower so they can negotiate with the seller to help pay for the non-allowable VA fees at closing.
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