One of the most frequently asked questions I hear as a loan officer is whether it is possible to roll closing costs into a VA home loan. Given that the VA loan program offers a zero down payment option, many potential homebuyers hope to complete their purchase without needing cash at closing. In this post, I’ll break down how these costs work and what options you have.
If you want to know how much of this you can actually roll in on your file, send me your Loan Estimate and I will run the numbers against your scenario.
Take the 30 second mortgage quiz to see if you qualify
The only closing cost that can be included in the VA loan amount is the VA funding fee. This fee is typically over 2% for first-time use when no down payment is made; for instance, if you purchase a home for $100,000, the loan amount can be just over $102,000 to include this fee.
For the rest of the fees, and the ones a lender cannot charge you at all, see my guide to VA loan closing costs.
While you might wish to add other costs—like title fees, appraisal fees, and insurance—into the loan, this cannot be done. Lenders avoid allowing excessive financing that pushes the loan amount significantly over the purchase price, which could lead to financial risk for both the borrower and the lender. Rolling in too many costs could result in the loan amount climbing to 8-10% over the purchase price, which is problematic.
Worth separating the general mortgage question from the VA one, because the answers are different and people arrive here searching for both.
On a purchase, no loan program lets you simply add closing costs to the loan amount. Your loan is sized against the purchase price and the appraised value, not against price plus costs, so there is no room to stack fees on top. That is true for conventional, FHA and VA alike. What does exist are three ways to avoid paying those costs out of pocket: a lender credit funded by a slightly higher rate, seller paid closing costs negotiated into the contract, or gift funds. The VA funding fee is the one genuine exception, because VA allows it to be added to the loan.
On a refinance it is different. There you are borrowing against your own equity rather than a purchase price, so closing costs can be financed into the new balance, subject to the program limits. On a VA streamline refinance the costs can be included in the loan, only up to two discount points can be financed, and federal law still requires those costs to be recouped inside 36 months out of your lower payment. You can test that with the VA IRRRL recoupment calculator.
The practical takeaway is the same either way. “Rolling in” is usually shorthand for someone else paying, or for paying through your rate. Both are legitimate, both cost you something, and the numbers should be on paper before you choose. If you want a second set of eyes on yours, here is how to read the Loan Estimate.
Although you can’t roll closing costs into a VA home loan in the traditional sense, there are several effective options to consider:
Start by reading the numbers correctly. Here is how to read a VA Loan Estimate.
Lender Credits: Lender credits refer to a small amount of money offered by the lender to cover your closing costs. This typically involves accepting a slightly higher interest rate in exchange for these credits. In a favorable interest rate environment, this could mean getting $1,000 to $2,000 credited towards your closing costs. However, in a higher rate environment, the credits may not be sufficient to cover all costs.
Seller Concessions: Seller concessions are a popular way to reduce your cash-to-close requirements. You negotiate with the seller to cover a portion of your closing costs, which is then included in the purchase contract. If you need $5,000 in closing costs, you could increase the purchase price by that amount while asking for a credit for closing costs. Just be mindful that the home must appraise for the higher sale price.
Gift Funds: Another option is to receive gift funds from relatives or friends. The VA does put limits on the donor. Chapter 4, Topic 4 of the VA Lender’s Handbook says a gift can be provided by a donor that does not have any affiliation with the builder, developer, real estate agent, or any other interested party to the transaction. You also need a gift letter stating the dollar amount, the donor’s statement that no repayment is expected, and the donor’s name, address, phone number and relationship to you, plus documentation that the funds actually transferred. With proper documentation showing the source of the funds, you can use these gifts to make your closing process more manageable.
Take the 30 second mortgage quiz to see if you qualify
In summary, while you cannot roll most closing costs into your VA home loan, you do have several avenues available to help cover these expenses. Understanding how the VA funding fee works and exploring options like lender credits, seller concessions, and gifts can significantly ease your financial burden at closing.
Have questions about VA home loans? Click here to contact me.
A condition by condition comparison of VA minimum property requirements and Fannie Mae’s conventional property condition rules, with the Selling Guide sections cited.
VA revised Chapter 12 effective May 1, 2026. Here is what changed on paint, radon, sheds and heaters, what did not change, and how I handle each on a live file.
A walkthrough of VA Loans Made Easy, my free VA loan community: the classroom lessons, the calculator section, a free copy of my book, and a chat area where you can ask me a question and get an answer.
Take the 30 second mortgage quiz to see if you qualify
