Seller paying closing costs...does that include the VA funding fee?

Asked by Desperatly Hoping, Los Angeles, CA Wed Aug 8, 2012

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Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Sat Aug 11, 2012
Good morning Desperatly Hoping,

Typically the VA Funding Fee is financed into the total loan. While this is disclosed to you as a closing cost on your Good Faith Estimate (GFE), and you have a Seller's concession for closing costs, most Lenders include the VA Funding Fee in the total loan made to the Veteran.

VA Basics

Eligible Borrowers: Veterans of the Armed Forces and National Guard. Non-veterans are not eligible except as the spouse of an eligible Veteran. (Subject to Veteran’s individual Certificate of Eligibility)
Eligible Property Types: 1-4 Family Homes (although the Underwriting criteria for multi-family homes are so restrictive that you should basically focus on Single Family homes).

VA Approved Condominiums are eligible. Find VA Approved Condominiums here:

Maximum Financing: 100% LTV. Loan Limit: $417,000 or high-cost county loan limit.

Seller Contributions: All closing costs and discount points may be paid by the seller, regardless of amount.

Qualifying: We qualify a Veteran’s Loan with two calculations. The first is a standard debt-to-income percentage ratio as in FHA and Conventional loans. The second calculation focuses on the monthly “residual income” depending on family size after a Veteran has paid the mortgage, income taxes, utilities, commuting costs, child care expenses and other debt servicing. This is a very realistic manner to qualify a homebuyer as it closely resembles a family budget. The Veteran’s Administration sets the baseline residual income based on family size and location of the property.

Mortgage Insurance: NONE. There is no monthly mortgage insurance paid on VA Loans. The VA Guarantees the mortgage loan and charges an upfront Guaranty Fee as a percentage of the loan amount (based on the Veteran’s standing and use of the Certificate of Eligibility) that is financed with the loan.

Thank you for your Service to our Nation!
Trevor Curran
NMLS #40140
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Kathleen Bec…, Agent, Santa Monica, CA
Sat Aug 11, 2012
Hi Desperatly Hoping:

You would need to refer back to your purchase contract to see if the VA Funding fee is the Seller's responsibility or yours.

Good luck!

All the best,

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Sona Gallatin, Agent, Santa Clarita, CA
Wed Aug 8, 2012
Yes it can include the VA funding costs as long as it was worded that way in the contract. Ask for credit towards all closing costs not just the non reoccurring ones.Or you can put an amount that you're requesting as long as you have the final cost from your lender. Give Steve at Midgate Mortgage a call or email him directly at He is very familiar with VA loans.

Good luck!
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carlos parra…, Other Pro, Monrovia, CA
Wed Aug 8, 2012
Typically, VA Loan officer wants to see all costs paid by seller. Therefore you have to take this into account when you make an offer. A full price offer with a VA Loan or FHA loan is less appealing to a Seller than a full price offer with a conventional loan.
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Ron Escobar -…, Agent, Beverly Hills, CA
Wed Aug 8, 2012
it is allowed for the seller to pay for the costs... including occurring and non-reoccurring... this includes the VA funding fee...

I use as a great lender for my VA clients... shoot him an email and he can get you answers and a great rate!

Best of luck!

And thank you for serving our country! Ohhhrah! Semper Fi!

Ron Escobar
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Cindy Davis, Agent, San Diego, CA
Wed Aug 8, 2012
It is not uncommon for the seller to pay the VA funding fee...but this is certainly negotiable.
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Tim Moore, Agent, Kitty Hawk, NC
Wed Aug 8, 2012
It is always best to list the closing costs being paid rather than just saying "Seller will pay up to $xxx in closing costs". Saying that then comes down to what is normal and common in your area as far as closing costs.
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