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Manny Oloyede | NMLS 1824463

Veterans

VA Loan Closing Costs and Who Pays Them

Which closing costs veterans can pay on a VA loan, non allowable fees, how seller concessions work, and how to structure an offer to reduce cash needed.

Updated 2026-08-21| Applies to: Veterans budgeting cash to close on a VA purchase.

The short answer

VA loans limit certain fees a veteran may pay, which is one of the program's protections. Standard costs such as the appraisal, title work, recording, prepaid taxes and insurance, and the funding fee are typically paid by the buyer or negotiated to the seller. Some fees are non allowable to the veteran and must be absorbed by the lender or the seller.

Typical buyer paid items

  • Appraisal and credit report
  • Title examination, lender's title insurance and recording
  • Prepaid interest, taxes and homeowners insurance
  • VA funding fee, unless exempt
  • Discount points, if you choose to buy the rate down

The non allowable concept

Certain fees cannot be charged to the veteran. When those charges exist in a transaction, they must be covered by another party, most often the lender through a credit or the seller through concessions. This is why VA offers often look different from conventional offers on the settlement statement.

Reducing cash to close

  1. 1.Negotiate seller paid closing costs within program limits.
  2. 2.Ask for a lender credit in exchange for a slightly higher rate.
  3. 3.Finance the funding fee rather than paying it in cash.
  4. 4.Time the closing to manage prepaid interest and the first payment date.

Structure matters more than most buyers realize. Before you write an offer, let me show you the concession target that gets you to the cash number you want.

Educational purposes only. Refinance and VA loan guidelines vary by program, borrower circumstances, property type, entitlement status, documentation and lender requirements. All financing is subject to application, verification, applicable program guidelines and underwriting approval. Not a commitment to lend. Manny Oloyede | Mortgage Broker | NMLS 1824463 | Ultimate Mortgage Brokers LLC. Equal Housing Opportunity.

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Frequently Asked Questions

Sellers can pay closing costs, and concession limits apply to certain categories of contributions.

With full entitlement, no down payment is commonly required, though other cash items still apply.

It is a separate one time charge that can typically be financed into the loan.

Yes, discount points are allowable and are a choice, not a requirement.

Yes, earnest money is part of the purchase contract and is credited at closing.

People also ask

Are discount points tax deductible?

Points may be deductible in some circumstances, but tax treatment depends on your situation, so it is worth checking with a tax professional.

Read: Mortgage Points, Fees, and Lender Credits: What Do They Mean?

Are closing costs the same for every loan program?

No. Some programs have specific limits on certain fees or allow different levels of seller contribution, so costs can vary by program even for the same purchase price.

Read: How Much Will My Closing Costs Be?

Is a down payment ever required on a VA loan?

Not always, but it can depend on your remaining entitlement, the loan amount, and lender-specific requirements, so this should be confirmed for your specific situation.

Read: VA Loan Benefits in Ohio

Does VA eligibility expire?

Earned eligibility generally does not expire, though entitlement can be tied up by an existing VA loan.

Read: VA Loan Eligibility and the Certificate of Eligibility

Is the funding fee the same as mortgage insurance?

No. It is a one time charge, not a recurring monthly premium.

Read: The VA Funding Fee Explained

Can I have two VA loans at once?

It is possible in certain circumstances when sufficient entitlement remains and occupancy requirements are met.

Read: VA Entitlement and Using a Second VA Loan

Terms used in this guide

Closing Costs
The lender, title, government and prepaid costs due at closing, separate from your down payment.
VA Loan
A mortgage guaranteed by the Department of Veterans Affairs for eligible service members, veterans and certain surviving spouses, often with no down payment and no monthly mortgage insurance.
Browse the full mortgage glossary

Written by

Manny Oloyede, Mortgage Broker

NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX

I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.

More about my backgroundAsk a question

Keep reading

Veterans

The VA Funding Fee Explained

What the VA funding fee is, why it exists, who is exempt, how down payment and prior use change it, and whether to finance it into the loan.

Mortgage Costs

How Much Will My Closing Costs Be?

Understand the main categories that make up mortgage closing costs, including lender fees, title, taxes, insurance, escrows, and credits.

Veterans

VA Loan Benefits in Ohio

Learn about VA loan eligibility, down payment flexibility, mortgage insurance, funding fees, entitlement, occupancy, and property requirements for Ohio veterans.

Mortgage Costs

Mortgage Points, Fees, and Lender Credits: What Do They Mean?

Understand discount points, origination charges, lender credits, and APR so you can evaluate closing cost options and estimate a rough break-even point.

Questions about your own numbers?

Send over your goal, income type and timeline and you'll get a straight answer on what is realistic.

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