VA Allowable Fees 2026: Complete Guide to VA Loan Closing Costs
VA loans protect veterans from junk fees. The VA publishes a strict list of allowable fees and prohibited fees — saving veterans $1,000-$3,000 compared to conventional loans. Plus, seller concessions can cover 100% of closing costs. Here's every fee you can and cannot be charged.
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VA allowable fees include: appraisal ($500-$800), credit report ($30-$100), title insurance, recording fees, origination fee (max 1% of loan), discount points, and VA funding fee (2.15% first-time, 0% down — can be financed). Prohibited fees include: application fees, lender attorney fees, commitment fees, and prepayment penalties. Sellers can pay up to 4% of the loan amount in concessions to cover all closing costs. Compare VA lenders and their fee structures →
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Some VA lenders waive the 1% origination fee entirely. Compare VA-approved lenders to find the lowest-fee option.
Compare VA Lenders Free →Complete List of VA Allowable Fees
| Fee | Typical Cost | Who Can Pay | Notes |
|---|---|---|---|
| Appraisal fee | $500-$800 | Borrower or Seller | Required by VA. VA-assigned appraiser. |
| Credit report | $30-$100 | Borrower or Seller | Pulled by lender for qualification. |
| Origination fee | Max 1% of loan | Borrower or Seller | $4,000 max on $400K. Some lenders waive. |
| Discount points | 0.25-2% of loan | Borrower or Seller | Optional. Each point = 0.125% rate reduction. |
| Title insurance | $1,500-$3,500 | Borrower or Seller | Lender + owner policy. Varies by state. |
| Title search | $200-$400 | Borrower or Seller | Confirms clear title. |
| Recording fees | $50-$200 | Borrower or Seller | County clerk fee for recording deed/mortgage. |
| Survey (if required) | $300-$700 | Borrower or Seller | Only if required by appraiser or title company. |
| Pest inspection | $100-$300 | Borrower or Seller | Only if required by appraiser (termite areas). |
| Flood certification | $15-$30 | Borrower or Seller | Determines if property is in flood zone. |
| Tax service fee | $50-$100 | Borrower or Seller | Monitors property tax payments. |
| Document prep | $50-$150 | Borrower or Seller | Customary and reasonable fee only. |
| Notary fees | $50-$200 | Borrower or Seller | For loan signing. Cannot be charged by lender. |
| VA funding fee | 2.15-3.3% | Borrower (financed) | Can be financed into loan. Exempt for disabled vets. |
| Home inspection | $300-$500 | Borrower only | Optional but recommended. Not a closing cost. |
Fees the VA Prohibits (Cannot Be Charged to Veteran)
The VA explicitly prohibits lenders from charging veterans these fees. If a lender tries to charge any of these, it's a VA violation — report it and find another lender.
Key protection: The 1% origination fee cap includes ALL lender charges for processing, underwriting, and origination. Lenders cannot break out separate processing or underwriting fees in addition to the origination fee. This saves VA borrowers $1,000-$3,000 vs conventional loans. Find VA lenders with no junk fees →
VA Funding Fee Rates in 2026
| Down Payment | First-Time Use (Regular) | Subsequent Use (Regular) | First-Time (Reservist) | Subsequent (Reservist) |
|---|---|---|---|---|
| 0% down | 2.15% | 3.3% | 2.4% | 3.3% |
| 5-10% down | 1.5% | 1.25% | 1.75% | 1.5% |
| 10%+ down | 1.25% | 1.25% | 1.5% | 1.5% |
Disabled veterans exemption: Veterans receiving VA disability compensation (10% or more) are exempt from the funding fee entirely. This saves $8,600 on a $400K loan (2.15%). Surviving spouses of veterans who died in service or from service-connected causes are also exempt.
Financing the funding fee: You can roll the funding fee into your loan amount. Example: $400K home, 0% down, 2.15% funding fee = $8,600. Your total loan becomes $408,600. This means you still pay $0 out of pocket at closing. Get pre-approved and calculate your funding fee →
VA Seller Concessions: How to Get $0 Closing Costs
The 4% Rule
The VA allows the seller to pay up to 4% of the loan amount in concessions toward closing costs and prepaids (taxes, insurance, HOA). This is separate from normal seller costs like realtor commissions.
Example: $400,000 VA Loan
- Max seller concession: $400,000 × 4% = $16,000
- Typical VA closing costs: $8,000-$12,000
- Prepaids (taxes + insurance): $3,000-$5,000
- If seller pays $12,000-$16,000 → borrower pays $0 at closing
What Seller Concessions Can Cover
- All closing costs (appraisal, title, etc.)
- Origination fee (up to 1%)
- Discount points
- Prepaid property taxes
- Prepaid homeowners insurance
- VA funding fee (if not financed)
- HOA fees (prepaid)
- Payoff of borrower's debts (judgment, collection)
What Seller Concessions CANNOT Cover
- Real estate agent commissions (separate)
- Home repairs (must be completed before closing)
- Cash back to borrower at closing
- Down payment (borrower must qualify for $0 down VA)
- Prepaid interest on the loan
VA vs Conventional: Closing Cost Comparison
| Fee Category | VA Loan | Conventional | Savings |
|---|---|---|---|
| Origination fee | Max 1% ($4,000) | 0.5-2% ($2K-$8K) | Capped at 1% |
| Application fee | PROHIBITED | $500-$1,000 | $500-$1,000 |
| Lender attorney | PROHIBITED | $300-$800 | $300-$800 |
| Prepayment penalty | PROHIBITED | Allowed in some states | No penalty risk |
| PMI/MIP | NONE ($0) | $100-$400/month | $36K-$144K over 30yr |
| Down payment | $0 | 3-20% ($12K-$80K) | $12K-$80K |
| Seller concessions | Up to 4% | Up to 3% (conv) | 1% more = $4K |
Based on $400,000 loan. VA loans save borrowers $15,000-$95,000+ compared to conventional loans when you factor in no PMI, no down payment, and prohibited fee protections. Compare VA lenders →
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Frequently Asked Questions About VA Allowable Fees
What fees are allowed on a VA loan?
VA allowable fees include: appraisal fee ($500-$800), credit report ($30-$100), title insurance and title search, recording fees, survey (if required), notary fees, origination fee (max 1% of loan amount), discount points (paid by borrower or seller), and VA funding fee. The VA also allows customary and reasonable fees for document preparation, tax service, flood certification, and pest inspection (if required by appraiser).
Compare VA lenders and their fee structures →What is the maximum origination fee on a VA loan?
The VA caps the origination fee at 1% of the loan amount. On a $400,000 loan, the maximum origination fee is $4,000. Some lenders waive this fee entirely. The 1% cap includes all lender charges for processing, underwriting, and origination. Discount points are separate from the origination fee and are not capped.
Find VA lenders with $0 origination fees →What fees are NOT allowed on a VA loan?
The VA prohibits these fees from being charged to the veteran: attorney fees (lender's attorney), broker price opinions, application fees, commitment fees, marketing fees, escrow fees (in some states), lock-in fees, notary fees charged by the lender, and prepayment penalties. The seller or lender must pay these fees if they apply. This protection saves VA borrowers $1,000-$3,000 compared to conventional loans.
Compare VA lenders with no junk fees →Who pays closing costs on a VA loan?
The borrower pays for the appraisal, credit report, title insurance, recording fees, origination fee, and discount points. However, the VA allows the seller to pay ALL closing costs (up to 4% of the loan amount) as a seller concession. This means a motivated seller can cover 100% of the borrower's closing costs and prepaids. Many VA borrowers negotiate seller concessions to cover all costs, resulting in a true $0 down, $0 closing cost loan.
Get pre-approved and negotiate seller concessions →How much is the VA funding fee in 2026?
The VA funding fee for 2026 is: 2.15% for first-time use with 0% down (regular military), 3.3% for subsequent use with 0% down, 1.5% for first-time use with 5-10% down, 1.25% for subsequent use with 5-10% down, 1.5% for any use with 10%+ down. Reservists/National Guard pay 2.4% first-time, 3.3% subsequent. Disabled veterans and surviving spouses are exempt from the funding fee. The fee can be financed into the loan.
Calculate your VA funding fee and get pre-approved →Can a veteran get a VA loan with no closing costs?
Yes. VA borrowers can get a true $0 down, $0 closing cost loan by: (1) Negotiating seller concessions — the VA allows sellers to pay up to 4% of the loan amount toward closing costs and prepaids. (2) Using lender credits — some lenders offer a credit in exchange for a slightly higher rate (0.125-0.25% higher). (3) Combining both — seller pays most costs, lender credit covers the rest. This is one of the biggest advantages of VA loans.
Find VA lenders offering $0 closing cost loans →Related VA Loan Guides
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Meet Sarah
Senior Mortgage Advisor & VA Loan Specialist
Sarah Mitchell brings over 12 years of mortgage industry expertise, specializing in VA loans and first-time homebuyer programs. As a certified NMLS professional, she has helped thousands of veterans and military families achieve homeownership through specialized loan programs. Her deep understanding of VA benefits and down payment assistance programs makes her a trusted advisor for service members transitioning to civilian life.
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Helped 2,500+ veterans secure home loans