What is one consequence for borrowers who do not pay the VA Funding Fee?

If borrowers do not pay the VA Funding Fee, they may become ineligible for a VA loan. The VA Funding Fee is a crucial element of the VA loan program, which helps to offset the costs to taxpayers and allows veterans and active-duty service members to access favorable loan terms without mortgage insurance. This fee is generally a one-time charge, and while some veterans may qualify to have the fee waived, those who do not pay it and do not qualify for a waiver may not be able to secure a VA loan.

Ineligibility for the VA loan program means that borrowers will not be able to take advantage of the unique benefits that VA loans offer, such as competitive interest rates, no down payment requirement, and no private mortgage insurance. Therefore, paying the VA Funding Fee is essential for maintaining eligibility in the program and accessing those valuable benefits.