VA Itemized Fees and Charges Policy & Procedure

Overview

VA regulations limit charges made against or paid by the borrower. They do not limit the payment of fees and charges by other parties.

In addition to reasonable and customary amounts for any or all of the allowable “itemized fees and charges”designated by VA, the lender may charge either:

a)     A 1% flat origination fee. Reasonable discount is also allowed (non-allowable fees may not be charged).

b)    In lieu of the 1% origination charge, lenders can charge buyers on an item-by-item basis provided the total does not exceed 1% of the loan amount.

Note: loanDepot Wholesale (LDW) will allow up to $500 in non-allowable fees to be lender paid. Fees in excess of this amount will need to be reduced and/or removed as a cure.

If the veteran is charged a flat 1% fee on the loan (calculated as 1% of the total principal balance on a refi or 1% of the lower of the sales price or base loan amount on a purchase) the following fee schedule applies:

Allowable Fees that CAN be charged to the Veteran in addition to the 1% flat fee

 Unallowable Fees that CANNOT be charged to the Veteran and must be included in the 1% flat fee and paid by the lender

Appraisal Fee and Compliance Inspections ( Except on IRRRL loans and those requested by lender or seller for reconsideration of value )

Amortization schedules

Attorney Fee for title examination or title insurance only

Appraisal Re-Inspection Fee

Credit Report Fee- $100 Maximum Fee

Attorney services other than for title examination or title insurance

Discount Points

Commitment Fees

Flood Certification Fee

Doc Prep Fees

Hazard Insurance/Flood Insurance Premiums

Escrow Fees and charges

MERS Registration Fee

Fees to Loan Brokers or other third parties

Prorated Taxes, Assessments and initial deposit for escrow account

Lenders Appraisal/Inspection

Recording Fees and Recording Taxes

Loan Application and Processing Fee

Survey/Plot Plan Fee

Loan Closing or Settlement Fee by Attorney, Settlement Agent, Escrow etc.

Title Exam/Title Insurance Fees

Notary Fees

VA Funding Fee

Photographs

Water Catchment System Test (Hawaii)*

Postage and other mailing charges

Well and/or Septic Inspections

Preparing title company of conveyance fees

Express Mail Fees for Refinance Loans

Tax Service Fee

Other Fees Authorized by VA (requires local RLC approval)

Trustee Fee

VA State Fees/Charges Deviations Table **

Underwriting Fee

 

Interest Rate Lock-in Fees

* Water catchment system test in Hawaii is an allowable charge veteran can pay (see VA Local Requirements/Circular 26-14-4)

** The VA State Deviations Table lists fees (typically considered unallowable) that are exceptions by state the veteran is allowed to pay as an allowable charge. (ie: CA, “Wood destroying insect/pest inspection fee may be paid by Veterans”)

 

Certain Fees are allowable based on the transaction type (purchase vs. refi). The table below documents those fees based on transaction type and whether or not they must be included in the 1% fee

Fee

Transaction Type

Veteran Can Pay

Subordination Fee

Purchase

NO

Subordination Fee

Refinance

YES- can be charged in addition to the 1% fee

HOA Certification Fee

Purchase

NO

HOA Certification Fee

Refinance

YES- can be charged in addition to the 1% fee

Pest Inspection/Termite Inspection

Purchase

NO – if not listed on VA State Deviations Table

YES - if on the VA State Deviations Table

Pest Inspection/Termite Inspection

Refinance

NO – if not listed on VA State Deviations Table

YES - if on the VA State Deviations Table

Prohibited Fees

The following fees can never be charged to the veteran regardless if the 1% origination fee was paid or not:

Itemization of Fees

VA requires all allowable fees and charges to the borrower and any lender/seller credits must be listed in the appropriate column(s) on the Closing Disclosure (CD). Fees charged to the veteran must be listed in the “Borrower-Paid”, seller credits in the “Seller-Paid” and lender credits placed in the “Paid by Others” columns. A separate itemized list of credits and charges are not acceptable.

CD example/instructions

 

 

V.I.E: 1/30/19