source:
  type: guide
  id: va-m26-7-ch08-t02
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 2 — Fees and
    Charges the Veteran-Borrower Can Pay
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 2 — Fees and
    Charges the Veteran-Borrower Can Pay.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch08-t02-full
  canonical_id: va-m26-7-ch08-t02-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 2 — Fees and Charges
    the Veteran-Borrower Can 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 2 — Fees and
      Charges the Veteran-Borrower Can 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: '2. Fees and Charges the Veteran-Borrower Can Pay Change Date
      November 8, 2012, Change 21 • This section has been updated to make minor grammatical
      edits. a. VA Regulations VA regulations in 38 CFR 36.4312 provide the list of
      fees and charges that the veteran can pay. b. Overview The veteran can pay a
      maximum of: • reasonable and customary amounts for any or all of the “Itemized
      Fees and Charges” designated by VA, plus • a one percent flat charge by the
      lender, plus • reasonable discount points. Note: Some special provisions apply
      to construction, alteration, improvement, and repair loans. Reference: See subsection
      e, “Construction Loans,” in section 2 of this chapter. c. Itemized Fees and
      Charges The veteran may pay any or all of the following itemized fees and charges
      in amounts that are reasonable and customary. Charge Description Appraisal and
      Compliance Inspections • The veteran can pay the fee of a VA appraiser and VA
      compliance inspectors. • The veteran can also pay for a second appraisal if
      he or she is requesting reconsideration of value. • The veteran cannot pay for
      an appraisal requested by the lender or seller for reconsideration of value.
      • The veteran cannot pay for appraisals requested by parties other than the
      veteran or lender. Continued on next page VA Pamphlet 26-7, Revised Chapter
      8: Borrower Fees and Charges and the VA Funding Fee 8-4 2. Fees and Charges
      the Veteran-Borrower Can Pay, Continued c. Itemized Fees and Charges (continued)
      Charge Description Recording Fees The veteran can pay for recording fees and
      recording taxes or other charges incident to recordation. Credit Report The
      veteran can pay for the credit report obtained by the lender. For Automated
      Underwriting cases, the veteran may pay the evaluation fee of $50 in lieu of
      the charge for a credit report. For “Refer” cases, the veteran may also pay
      the charge for a merged credit report, if required. Prepaid Items The veteran
      can pay that portion of taxes, assessments, and similar items for the current
      year chargeable to the borrower and the initial deposit for the tax and insurance
      account. Hazard Insurance The veteran can pay the required hazard insurance
      premium. This includes flood insurance, if required. Flood Zone Determina- tion
      The veteran can pay the actual amount charged for a determination of whether
      a property is in a special flood hazard area, if made by a third party who guarantees
      the accuracy of the determination. The veteran can pay a charge for a life-of-the-loan
      flood determination service purchased at the time of loan origination. A fee
      may not be charged for a flood zone determination made by the lender or a VA
      appraiser. Survey The veteran can pay a charge for a survey, if required by
      the lender or veteran. Any charge for a survey in connection with a condominium
      loan must have the prior approval of VA. Continued on next page VA Pamphlet
      26-7, Revised Chapter 8: Borrower Fees and Charges and the VA Funding Fee 8-5
      2. Fees and Charges the Veteran-Borrower Can Pay, Continued c. Itemized Fees
      and Charges (continued) Charge Description Title Examination and Title Insurance
      The veteran may pay a fee for title examination and title insurance, if any.
      If the lender decides that an environmental protection lien endorsement to a
      title policy is needed, the cost of the endorsement may be charged to the veteran.
      Special Mailing Fees for Refinancing Loans For refinancing loans only, the veteran
      can pay charges for Federal Express, Express Mail, or a similar service when
      the saved per diem interest cost to the veteran will exceed the cost of the
      special handling. VA Funding Fee Unless exempt, each veteran must pay a funding
      fee to VA. Mortgage Electronic Registration System (MERS) Fee The veteran may
      pay a fee for MERS. MERS is a one-time fee for the purpose of electronically
      tracking the ownership of the beneficial interest in a loan and its servicing
      rights. Other Fees Authorized by VA Additional fees attributable to local variances
      may be charged to the veteran only if specifically authorized by VA. The lender
      may submit a written request to the Regional Loan Center for approval if the
      fee is normally paid by the borrower in a particular jurisdiction and considered
      reasonable and customary in the jurisdiction. Whenever the charge relates to
      services performed by a third party, the amount paid by the borrower must be
      limited to the actual charge of that third party. Example: If the lender obtains
      a credit report at a cost of $30, the lender may only charge the borrower $30
      for the credit report. The lender may not charge $35, even if it believes that
      a $5 handling charge is fair. VA Pamphlet 26-7, Revised Chapter 8: Borrower
      Fees and Charges and the VA Funding Fee 8-6 2. Fees and Charges the Veteran-Borrower
      Can Pay, Continued c. Itemized Fees and Charges (continued) In addition, the
      borrower may not pay a duplicate fee for services that have already been paid
      for by another party. Examples: • An appraisal is completed on a property and
      paid for by a prospective purchaser, but the sale is never completed. A second
      purchaser applies for a loan before the validity period of the Notice of Value
      (NOV) expires. The lender uses the same NOV. The lender may not charge the second
      purchaser an appraisal fee if no second appraisal is ordered. • A survey or
      flood zone determination, if the lender elects to use an existing survey or
      flood determination. d. Lender’s One Percent Flat Charge In addition to the
      “itemized fees and charges,” the lender may charge the veteran a flat charge
      not to exceed one percent of the loan amount. Calculate the one percent on the
      principal amount after adding the funding fee to the loan, if the funding fee
      is paid from loan proceeds (except Interest Rate Reduction Refinancing Loans
      (IRRRLs). Note: For IRRRLs, use VA Form 26-8923, IRRRL Worksheet, for the calculation.
      The lender’s flat charge is intended to cover all of the lender’s costs and
      services which are not reimbursable as “itemized fees and charges.” Continued
      on next page VA Pamphlet 26-7, Revised Chapter 8: Borrower Fees and Charges
      and the VA Funding Fee 8-7 2. Fees and Charges the Veteran-Borrower Can Pay,
      Continued d. Lender’s One Percent Flat Charge (continued) The following list
      provides examples of items that cannot be charged to the veteran as “itemized
      fees and charges.” Instead, the lender must cover any cost of these items out
      of its flat fee: • lender’s appraisals • lender’s inspections, except in construction
      loan cases • loan closing or settlement fees • document preparation fees • preparing
      loan papers or conveyancing fees • attorney’s services other than for title
      work • photographs • interest rate lock-in fees • postage and other mailing
      charges, stationery, telephone calls, and other overhead • amortization schedules,
      pass books, and membership or entrance fees • escrow fees or charges • notary
      fees • commitment fees or marketing fees of any secondary purchaser of the mortgage
      and preparation and recording of assignment of mortgage to such purchaser •
      trustee’s fees or charges • loan application or processing fees • fees for preparation
      of truth-in-lending disclosure statement • fees charged by loan brokers, finders
      or other third parties whether affiliated with the lender or not, and • tax
      service fees. Continued on next page VA Pamphlet 26-7, Revised Chapter 8: Borrower
      Fees and Charges and the VA Funding Fee 8-8 2. Fees and Charges the Veteran-Borrower
      Can Pay, Continued e. Construction Loans The lender can charge an additional
      flat charge on construction, alteration, improvement, or repair loans. If the
      lender supervises the progress of construction and/or makes advances to a veteran
      in excess of 50 percent of the loan during construction, alteration, improvement,
      or repair, then the lender may charge the veteran up to two percent of the loan
      amount in addition to the lender’s one percent flat charge. Example: Total charges
      to the veteran in these cases would be, at a maximum, itemized fees and charges
      plus a three percent flat charge plus discount points. If the lender does not
      supervise the progress of construction or make advances to a veteran in excess
      of 50 percent of the loan during construction, alteration, improvement, or repair,
      then the lender may charge the veteran up to one percent of the loan amount
      in addition to the lender’s one percent flat charge. Example: Total charges
      to the veteran in these cases would be, at a maximum, itemized fees and charges
      plus a two percent flat charge plus discount points. This provision also applies
      to supplemental loans. VA Pamphlet 26-7, Revised Chapter 8: Borrower Fees and
      Charges and the VA Funding Fee 8-9'
  judgment: false
