VA issued Circular 26-21-11 to clarify processes relating to the remittance of the statutory funding fee. Per the Circular, VA is concerned that lenders are not exercising due diligence in determining when a borrower is exempt from having to pay the funding fee and that lenders have advised borrowers to finance the funding fee, so that they could effectively receive cashback after loan closing. VA Clarified processes with respect to: the funding fee exemption determination; Interest Rate Reduction Refinancing Loans (IRRRLs); loans other than IRRRLs; and funding fee corrections and refund requests. The Circular went into effect July 15, 2021.
Click to view the VA Circular 26-21-11: https://www.tenaco.com/wp-content/uploads/2021/07/VA-Circular-26-21-11-07-15-21.pdf
