Plan beyond zero down
Closing charges, prepaid taxes and insurance, escrow deposits, inspections, and moving expenses can still require cash. Purchase borrowers can finance the VA funding fee, but not other closing fees and charges into the VA purchase loan.
Purchase funding fee rates
For a nonexempt purchase borrower with less than 5% down, the fee is 2.15% for first use and 3.3% for subsequent use. At least 5% down reduces it to 1.5%, and at least 10% down to 1.25%. The fee applies to the base loan amount. Different loan types and special prior-use situations have different rules; confirm with your lender.
Check exemptions
Exemptions include qualifying service-connected disability compensation situations, certain surviving spouses receiving DIC, qualifying pre-discharge ratings, and active-duty Purple Heart recipients. Confirm your actual status with your lender and VA.
Seller credits and concessions
VA distinguishes closing-cost credits from seller concessions. Concessions are limited to 4% of reasonable value; ordinary closing-cost credits are treated differently. Have your lender review the proposed credits before your agent writes the offer.
Check the official guidance
Program rules can change. Confirm your circumstances with VA and your lender.
VA.gov: Funding fees & closing costsGeneral education only. Loan approval, property eligibility, costs, and contract rights depend on individual circumstances. We are an independent resource, not VA or a lender.
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