VA closing costs, seller concessions and gift funds
Which fees a veteran can pay, the VA's 1% rule, how seller concessions work and how gift funds can help at closing.
Written by the FLO Mortgage team · Licensed mortgage broker, NMLS #1835856 · Updated October 2026
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At a glance
- VA limits fees veterans can be charged
- Seller can pay normal closing costs
- Concessions up to 4% on top
- Gift funds allowed with documentation
Talk with a licensed loan officer
VA closing costs
VA loans come with built-in protections on closing costs. The VA limits what a veteran can be charged, lets the seller pay closing costs, and allows gifts to help with cash needs. Here's how the pieces fit together.
Fees a veteran can pay
Veterans can pay reasonable, customary third-party charges and a limited lender charge. Typical examples:
- Appraisal and credit report
- Title insurance, title exam and recording fees
- Survey and flood certification
- Prepaid taxes, homeowners insurance and interest
- Discount points, if you choose to buy down the rate
- The VA funding fee, unless you're exempt
On the lender side, the VA allows either itemized charges or a flat fee of up to 1% of the loan. When a lender uses the flat 1%, it can't also charge the veteran separately for things like processing, underwriting or document preparation.
Seller-paid costs and the 4% concession limit
A seller can pay all of the veteran's normal closing costs and discount points. On top of that, the VA allows seller concessions of up to 4% of the home's value. Concessions include things like:
- Paying the VA funding fee
- Prepaying property taxes and insurance
- Paying off some of the buyer's debts to help them qualify
- Gifts such as appliances
Negotiating seller help is often how VA buyers close with very little cash. Rules on buyer's agent fees have changed in recent years, so ask us how they apply to your purchase.
Using gift funds
Family members and other acceptable donors can give money toward closing costs or other cash needs. Your lender will need a signed gift letter and documentation showing the transfer. Gifts can't come from anyone with an interest in the sale, such as the seller or an agent, except where allowed as a concession.
Questions, answered
How much are VA closing costs?
They vary by price, location and lender, and typically include third-party fees, prepaid items and a limited lender charge. Many buyers negotiate for the seller to pay some or all of them. Ask us for a written estimate.
Can the seller pay all my closing costs on a VA loan?
Yes. The seller can pay all normal closing costs. Separate concessions, like paying the funding fee or prepaids, are capped at 4% of the value.
What is the VA 1% rule?
The lender can charge either itemized fees or a flat charge of up to 1% of the loan. If it uses the flat charge, it can't add separate processing or underwriting fees.
Can I roll closing costs into a VA loan?
On a purchase, the VA funding fee can be financed, but most other closing costs are paid at closing, often by the seller. On refinances, more costs can usually be included.
Can I use gift money for a VA loan?
Yes, from acceptable donors with a gift letter and documentation of the transfer.
More answers in the VA Answer Center.
More VA loan guides
- VA home loans overview
- VA loan questions, answered
- VA loan tools and calculators
- VA home buying roadmap
- VA loans for first-time buyers
- VA loans for active duty
- VA loans for Guard and Reserve
- VA appraisals and property requirements
- VA occupancy rules
- VA entitlement and second VA loans
- Assumable VA loans
- VA condos and property types
- VA manual underwriting
- Disabled veteran property tax exemptions
- VA streamline refinance (IRRRL)
- VA cash-out refinance
- VA funding fee exemption
- VA loans for surviving spouses
- VA residual income explained
- VA loans after bankruptcy or foreclosure
VA loans by state: Florida · Georgia · Michigan · North Carolina · Tennessee · Texas
Local VA loan help
Talk to a FLO Mortgage loan officer
Every FLO loan officer helps veterans, service members and military families with VA loans. Have a question these guides don't answer? Ask our team.
This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, property eligibility and program availability. Lender requirements may be stricter than the program guidelines described here. Not all applicants will qualify. Figures reflect 2026 VA guidelines and may change without notice. FLO Mortgage is licensed in Florida, Georgia, Michigan, North Carolina, Tennessee and Texas. Company NMLS #1835856. Equal Housing Opportunity. FLO Mortgage is not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any government agency. Licensing & Disclosures.
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Every FLO Mortgage loan officer can walk you through this program, run the numbers for your situation and compare it with your other options. Have questions? Call our main office at (386) 882-9980.
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