VA Home Loans
Down Payment & Closing Costs

Down Payment

One of the best things about a VA loan is that they do not require a down payment. There are certain special circumstances where a down payment is required. However, this requirement only applies to homes located in certain "high cost areas" as defined by the VA. Unless the selling price or the amount you intend to refinance exceeds $424,100, you will not need to make a down payment.

Here’s an illustration of how significant this benefit is when purchasing a home.
VA vs. Conventional Loans – Down Payment Comparison
VA Conventional
Loan Amount 0% 5% 10% 20%
$150,000 $0 $7,500 $15,000 $30,000
$225,000 $0 $11,250 $22,500 $45,000
$300,000 $0 $15,000 $30,000 $60,000

Closing Costs

There are closing costs associated with a VA loan. However, one of the great things about a VA loan is that you may be able to avoid paying for closing costs out-of-pocket.

Although your VA benefit does not pay your closing costs for you, here are some "non-cash" approaches you can take with closing costs.

When purchasing a home.

When purchasing a home you may ask the seller to pay closing costs during negotiation. Additionally, you may apply a financial gift from a family member or relative toward some or all of your closing costs.

When refinancing an existing mortgage.

When refinancing a home, ask your VA mortgage advisor to add your closing costs to your loan amount. Financial gifts from a family member or relative may be applied toward closing costs on a refinance loan.

Cash-out refinance.

Generally, the purpose for which the cash-out proceeds will be used are subject to approval by the lender.

The following requirements must be satisfied with cash-out refinancing:

  • The new loan amount may not exceed

    100% of Property Value
    + The VA Funding Fee
    Total Amount Available with a Cash-Out Refinance

  • Borrower must pay off any existing lien(s) on the property.
  • If cash-out proceeds are being used to pay off existing debts, an itemization of debts to be paid off by the loan proceeds is required.
  • The purpose of the cash-out proceeds will be subject to approval by the lender.

For a servicemember on active duty - Refinance of a VA loan, be sure to check with your legal council on benefits that may be affected.

Mortgage or Refinance
Applying is fast and easy. Simply apply online or stop by one of our branch locations to learn more.