Greetings,

Due to a system defect identified after a recent system release, the Funding Fee Payment System (FFPS) is incorrectly charging a 3.3% Funding Fee for cash-out refinance loans closed on, or after, January 1, 2020. 

In accordance with Public Law 116-23, Blue Water Navy Vietnam Veterans Act of 2019 and VA Circular 26-19-30, the correct amount to be remitted is 3.6%. 

This issue is tentatively scheduled to be resolved with a system fix on January 16, 2020.  There is no manual work around. 

VA is instructing lenders to suspend VA funding fee payments for cash-out refinance loans closed on, or after, January 1, 2020, and until the system fix is implemented.  The system fix will be announced on WebLGY Announcements and on the FFPS Login page, at which point lenders should immediately begin processing funding fee payments for cash-out refinance loans. 

Lenders who have submitted an incorrect funding fee payment amount due to this defect will be required to remit the deficit.  Any late fees and interest incurred as a result of this defect will be waived or refunded.  Lenders will have 30 additional days (90 days total) to secure the VA Guaranty.  These allowances and adjustments will only be applied to loans directly impacted by this defect. 

Additional communication will be sent out to lenders on the plan to correct errors in funding fee charged between January 1, 2020, and January 16, 2020.  We regret any inconvenience this defect may have caused and will be providing additional updates on the WebLGY Announcements page and FFPS login page.

Sincerely,

Loan Guaranty Service