Which type of loan has a non-refundable funding fee?

Which type of loan has a non-refundable funding fee?

• A. conventional loan
• B. FHA loan
• C. subprime loan
• D. VA loan

Answer: (D)

The type of loan with a non-refundable funding fee is tied to the VA loan program. The Department of Veterans Affairs imposes a funding fee to help support the loan guaranty program, and this fee is non-refundable—once paid, it isn’t returned if you later pay off the loan or refinance. The amount can be financed into the loan and varies based on factors like whether it’s the borrower’s first VA loan and the down payment, with exemptions available for certain veterans and circumstances. Conventional loans don’t involve a government funding fee, FHA loans use mortgage insurance premiums instead, and subprime loans aren’t defined by a non-refundable funding fee.

The type of loan with a non-refundable funding fee is tied to the VA loan program. The Department of Veterans Affairs imposes a funding fee to help support the loan guaranty program, and this fee is non-refundable—once paid, it isn’t returned if you later pay off the loan or refinance. The amount can be financed into the loan and varies based on factors like whether it’s the borrower’s first VA loan and the down payment, with exemptions available for certain veterans and circumstances. Conventional loans don’t involve a government funding fee, FHA loans use mortgage insurance premiums instead, and subprime loans aren’t defined by a non-refundable funding fee.