source:
  type: guide
  id: va-m26-7-ch03-t07
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 3, Topic 7 — Discount
    Points
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 3, Topic 7 — Discount
    Points.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch03-t07-full
  canonical_id: va-m26-7-ch03-t07-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 3, Topic 7 — Discount Points
  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 3, Topic 7 — Discount
      Points
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 73e5d344e2743889
    fetched_at: '2026-05-23T01:53:52Z'
    content_hash: sha256:b452379ce6dbdb528896ce1d9ac9ca8a9cf03b5fab6fa9af7766dc2dc17c2bbe
    paragraph_quote: '7. Discount Points Change Date November 8, 2012, Change 21 •
      This section has been updated to make minor grammatical edits. a. Requirement
      Veterans may pay reasonable discount points on VA-guaranteed loans. The amount
      of discount points is whatever the borrower and lender agree upon. Discount
      points can be based on the principal amount of the loan after adding the VA
      funding fee, if the funding fee will be paid from loan proceeds. b. When Can
      Points be Included in the Loan? Discount points may be rolled into the loan
      only in the case of refinancing loans, subject to the following limitations:
      Interest Rate Reduction Refinancing Loans A maximum of two discount points can
      be rolled into the loan. If the borrower pays more than two points, the remainder
      must be paid in cash. Refinancing of Construction Loans, etc. Loans to refinance
      are: • a construction loan, • an installment land sales contract, or • a loan
      assumed by the veteran at an interest rate higher than that for the proposed
      refinancing loan Any reasonable amount of discount points may be rolled into
      the loan as long as the sum of the outstanding balance of the loan plus allowable
      closing costs and discount points does not exceed the VA reasonable value. Reference:
      See the maximum loan limitations in section 3 of this chapter. Cash-out Refinancing
      Loans While discount points cannot specifically be included in the loan amount,
      the borrower can receive cash from loan proceeds, subject to maximum loan limits
      (See section 3 of this chapter). The cash received by the borrower can be used
      for any purpose acceptable to the lender, including payment of reasonable discount
      points. Continued on next page VA Pamphlet 26-7, Revised Chapter 3: The VA Loan
      and Guaranty 3-18 7. Discount Points, Continued c. Changes to the Agreed Upon
      Discount Points The lender and borrower are expected to honor any agreements
      they have entered into which impact the discount points paid on the loan. VA
      does not object to changes in the agreed upon points, as long as no lender/borrower
      agreements are violated. The following procedures apply in such cases. Any increase
      in discount points requires: • verification that the borrower has sufficient
      assets to cover the increase, • documentation of the change, and • a new or
      corrected URLA with any corrections initialed and dated by the borrower. Reference:
      For prior approval loans, see section 4 of chapter 5. VA Pamphlet 26-7, Revised
      Chapter 3: The VA Loan and Guaranty 3-19'
  judgment: false
