San Diego CA - The Department of Veterans Affairs (VA) home loan program does not charge mortgage insurance, unlike an FHA insured loan or a Fannie Mae/Freddie Mac loan with less than 20% down payment.
However, in order to defray the cost of administering the VA Home Loan program, the VA does charge a VA Funding Fee which may be paid in cash at closing, paid by the seller, paid by the lender, or most commonly - financed into the loan. 
REMEMBER: The current Zero Down VA Home Loan Limit in San Diego County is $562,350 - larger loan amounts are allowed, but with some down payment, for more info go to: VA Home Loan Limits for 2015, San Diego County
How much is the VA Funding Fee on home purchase? That depends on the type of military service, the amount of the down payment if any, and whether it is for a 1st time use or a subsequent usage. Check out this chart: 
The percentages for the VA Funding Fee are based on the base loan amount, i.e., the purchase price minus down payment if any. *The higher subsequent use fee does not apply if the veteran's only prior use of entitlement was for a manufactured home loan.
What are the VA Funding Fee amounts for a refinance? There are two types of VA refinances: a VA cash-out refinance (this is a refinance of a non-VA loan to a VA loan, or a refinance where actual cash in hand is receive at closing or other bills are paid through closing), and the VA Interest Rate Reduction Refinance Loan (IRRRL) otherwise known as the VA Streamline.
For a VA cash-out refinance loan also known as a regular VA refinance, there are no reduced VA Funding Fees based on equity unlike a VA purchase loan. The VA Funding Fee for a VA cash-out refinance is as follows:
For a VA Streamline refinance, the VA Funding Fee is as follows:
So, now that we know the amounts of the VA Funding Fee, according to the VA who is EXEMPT from paying the VA Funding Fee?
- Veterans receiving VA compensation for service-connected disabilities.
- Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.
- Veterans who are rated by VA as eligible to receive compensation as a result of pre-discharge review of existing medical evidence (including service medical and treatment records) that results in issuance of a memorandum rating.
- Veterans entitled to receive compensation, but who are not presently in receipt because they are on active duty.
- Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan)
Lender are required the verify the exempt status prior to closing, and if unable to verify, then the VA Funding Fee must be charged.
Are you looking to use your VA Home Loan Benefits to buy or refinance a home in California? Contact me today to discuss your VA home loan options - I've been doing VA home loans for 20+ years!
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