VA Allowable Fees and Charges

All questions and points of clarification should be referred to Chapter 8 of the VA Lenders Handbook or the VA web site: http://www.benefits.va.gov/warms/pam26_7.asp

ALLOWABLE FEES AND CHARGES:

The following list of allowable items is published in 38 CFR 36.4312 and applies to all VA home loans.

• VA Appraisal Fee
• Appraiser Compliance Inspection
• Recording Fees
• Credit Report
• Escrow Account (Taxes & Insurance)
• Initial Hazard Insurance Policy
• Survey
• Title Examination and Title Insurance
• VA Funding Fee
• Authorized State and Local Fees
• Flood certification fee if made by a 3rd party who guaranteesthe accuracy of the determination
• Borrower's share of prepaids: taxes, ins., assessments
• mailing fees on refinances only if savings on per diem exceedscost to borrower.

ORIGINATION FEE

The 1% origination fee is intended to cover all of the Lender's costs and services which are not reimbursable as "itemized fees and charges" noted above

• Lender's Appraisal
• Lender's inspections (except in construction loan cases)
• Loan Closing or Settlement Fees
• Doc Prep fees
• Preparing loan papers or conveyancing fees
• Attorney's services other than for title work
• Photographs
• Interest rate lock-in fees
• postage and other mailing charges, telephone calls etc
• Amoritzation Schedules
• Escrow fees or charges

ITEMS THAT CAN NOT BE CHARGED TO THE VETERAN

• Notary Fees
• Commitment fees or mrketing fees of any secondary purchaser
• Trustee's fee
• Loan application or processing fees
• Fees charged by loan brokers, finders or other third parties whether affiliated with lender or not
• Tax Service Fee

Note:Termite Reports and Courier Fees are allowable charges to veterans only on refinances. Notary fees are chargeable in Louisiana in addition to the 1% origination fee.

Seller Concessions

A seller concession is anything of value added to the transaction by the builder or seller for which the buyer pays nothing additional and which the seller is not customarily expected or required to pay or provide

Seller concessions include but are not limited to the following:

• payment of the buyer's VA funding fee
• prepayment of buyer's property taxes and insurance
• gifts such as a television set or microwave
• payment of extra points to provide permanent interest rate buydown
• provision of escrowed funds to provide temporary interest ratebuy-downs, and
• payoff of credit balances or judgments on behalf of the buyer.

Seller concessions do not include:

• payment of the buyer's closing costs, or
• payment of points as appropriate to the market.

Example:If the market dictates an interest rate of 7.5% with 2 discount points, the seller's payment of the 2 points would not be a seller concession. If the seller paid 5 points, 3 of these points would be considered a seller concession.
(Seller concessions or combinations may not exceed 4% of the reasonable value.)