source:
  type: guide
  id: va-m26-7-ch08-t03
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 3 — Fees and
    Charges the Veteran-Borrower Cannot Pay
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 3 — Fees and
    Charges the Veteran-Borrower Cannot Pay.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch08-t03-full
  canonical_id: va-m26-7-ch08-t03-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 3 — Fees and Charges
    the Veteran-Borrower Cannot Pay
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 3 — Fees and
      Charges the Veteran-Borrower Cannot Pay
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 8f28fe2bcf1f2e28
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:44aecfeb4beae872a5dbb59f87b324e1fc8730143eaf4185b6cb0d71698e60f3
    paragraph_quote: '3. Fees and Charges the Veteran-Borrower Cannot Pay Change Date
      November 08, 2010, Change 15 • This section has been updated to make minor grammatical
      edits. a. Lender’s Use of One Percent Flat Charge The lender’s maximum allowable
      flat charge of one percent of the loan amount (or greater percentage in the
      case of construction loans) is intended to cover all of the lender’s costs and
      services which are not reimbursable as “itemized fees and charges.” The lender
      may pay third parties for services or do as it wishes with the funds from the
      flat charge, as long as the lender complies with the Real Estate Settlement
      Procedures Act (RESPA). Section 2, subsections c and d, of this chapter provide
      some examples of items that cannot be charged to the veteran as “itemized fees
      and charges.” This section provides more examples of items that cannot be paid
      by the veteran, but can be paid out of the lender’s flat charge or by some party
      other than the veteran. b. Attorney’s Fees The lender may not charge the borrower
      for attorney’s fees. However, reasonable fees for title examination work and
      title insurance can be paid by the borrower. They are allowable itemized fees
      and charges. VA does not intend to prevent the veteran from seeking independent
      legal representation. Therefore, the veteran can independently retain an attorney
      and pay a fee for legal services in connection with the purchase of a home.
      Closing documents should clearly indicate that the attorney’s fee is not being
      charged by the lender, but is being paid by the veteran as part of an independent
      arrangement with an attorney. Continued on next page VA Pamphlet 26-7, Revised
      Chapter 8: Borrower Fees and Charges and the VA Funding Fee 8-10 3. Fees and
      Charges the Veteran-Borrower Cannot Pay, Continued c. Brokerage Fees Fees or
      commissions charged by a real estate agent or broker in connection with a VA
      loan may not be charged to or paid by the veteran-purchaser. While use of “buyer”
      brokers is not precluded, veteran-purchasers may not, under any circumstances,
      be charged a brokerage fee or commission in connection with the services of
      such individuals. Since information on property available for purchase and financing
      options is widely available to the public from a variety of sources, VA does
      not believe that preventing the veteran from paying buyer-broker fees will harm
      the veteran. d. Prepayment Penalties A veteran obtaining a VA refinancing loan
      cannot use loan proceeds to pay penalty costs for prepayment of an existing
      lien. A veteran purchasing a property with a VA loan cannot pay penalty costs
      required to discharge any existing liens on the seller’s property. e. HUD /
      FHA Inspection Fees for Builders In proposed construction cases in which the
      dwelling was constructed under the Department of Housing and Urban Development
      (HUD) supervision, the cost of any inspections or re-inspections must be borne
      by the builder or sponsor and are not chargeable to the veteran-purchaser. This
      includes: • re-inspections by VA or HUD of onsite or offsite work for which
      an escrow agreement was established, and • any additional re-inspections deemed
      necessary by VA to assure conformity with VA regulations. VA Pamphlet 26-7,
      Revised Chapter 8: Borrower Fees and Charges and the VA Funding Fee 8-11'
  judgment: false
