FAQ: How is the VA Funding Fee Amount Calculated In Charlie?

Q: How is the VA Funding Fee Amount Calculated in Charlie?

A: The VA funding fee is a one-time charge applied to most VA-backed loans to help fund the program and reduce costs for taxpayers. Charlie automates the calculation of this fee based on loan type, borrower eligibility, down payment percentage, and VA exemption status.

This FAQ provides a detailed breakdown of how the VA funding fee is determined within Charlie, including rounding rules, required input fields, and calculation logic. It also includes a requirements chart outlining the applicable funding fee percentages for different loan scenarios.

By leveraging Charlie’s built-in automation, lenders can ensure accurate VA funding fee calculations while maintaining compliance with VA guidelines.

Details:

Rounding Rules

• There is no rounding of the VA funding fee calculation.  The amount is cut off after the hundredths place (2 decimal places).
  • Example:  If the calculated funding fee is $3649.6523, the funding fee amount collected is $3649.62

• For the down payment, the funding fee is rounded to 2 decimal places.  

Input Fields

• The following fields are used to trigger the calculation of the VA funding fee amount: 
  • Mortgage Type = VA 
  • Loan Purpose Type = Purchase, Refinance or Other
  • Purchase Price or Base Loan Amount
  • Down Payment Amount
  • Borrower Funding Fee Percent
  • VA Funding Fee Exemption Type

Parameters

Based on Loan Fee Rates for Loans Closing On or After April 7, 2023 and prior to November 14, 2031

Purchase Loan - First-Time VA Loan Borrower Funding Fee:

• Down Payment Percent Less than 5% = 2.15%.

• Down Payment Percent Between 5% and 10% = 1.5%.

• Down Payment Percent Greater than or Equal to 10% = 1.25%.

Purchase Loan - Subsequent VA Loan Borrower:

• Down Payment Percent Less than 5% = 3.3%.

• Down Payment Percent Between 5% and 10% = 1.5%.

• Down Payment Percent Greater than or Equal to 10% = 1.25%.

Cash-Out Refinance:

• First-Time VA Loan Borrower: = 2.15%.

• Subsequent VA Loan Borrower = 3.3%.

Interest Rate Reduction Refinance Loan (IRRRL)

• 0.5%.

Native American Direct Loan (NADL)

• 1.25%

Exemption Calculations