On a $400,000 Goochland County home purchase, a first-use VA buyer putting 0% down could finance an $8,600 VA funding fee and bring about $2,555 to closing after a $4,000 seller credit. At a hypothetical 6.25% fixed rate, financing that fee raises principal and interest from about $2,462 to $2,515 per month – a $53 monthly difference. Over five years, that is roughly $3,180 in additional payments, while about $8,140 of the funded fee remains in the loan balance.
That is a useful VA loan closing cost example because it separates the costs you pay at settlement from the costs you can finance, negotiate, or prepare for through credits. The exact numbers change with the property, tax timing, insurance, rate, and contract terms, but the framework helps buyers make a confident offer without guessing.
By Duane Buziak, NMLS #1110647
Table of contents
- What makes up VA closing costs
- A $400,000 Virginia purchase example
- What a seller can pay
- VA costs compared with other loan types
- Local factors for Goochland-area buyers
- Frequently asked questions
What makes up VA closing costs?
Closing costs are not one charge. They are a collection of third-party services, government recording charges, prepaid items, and escrow deposits collected before ownership transfers. The VA funding fee is separate. Eligible veterans with qualifying service-connected disability compensation may be exempt from that fee; confirm eligibility directly through the Department of Veterans Affairs before relying on an estimate.
A typical Virginia VA purchase may include an appraisal, title and settlement services, recording fees, a credit report, prepaid daily interest, the first year of homeowners insurance, and an initial property-tax and insurance escrow deposit. Depending on the transaction, a survey, well test, septic inspection, or additional property review may also be appropriate.
VA rules limit which charges a borrower may pay. That protection matters, but it does not mean every closing cost disappears. A mortgage broker should review the Loan Estimate line by line so you can see what is a true transaction expense, what is prepaid, and what may be handled with a seller credit or a no-out-of-pocket closing option.
A VA loan closing cost example for a $400,000 home
Assume a single-family home purchase in Goochland County with no down payment, a first-use VA funding fee of 2.15%, and a 30-year fixed rate of 6.25%. This is an illustration, not a rate quote or a promise of costs.
The base loan amount is $400,000. The 2.15% funding fee equals $8,600, producing a financed loan amount of $408,600. The buyer’s estimated settlement charges could look like this:
| Cost category | Example amount | Can it be financed? | Who may pay it? |
|---|---|---|---|
| VA funding fee at 2.15% | $8,600 | Yes | Buyer, if not exempt |
| Appraisal, title, settlement, recording, and credit | $2,855 | No | Buyer or seller credit |
| Prepaid interest and homeowners insurance | $1,950 | No | Buyer or seller credit |
| Initial tax and insurance escrow deposit | $1,750 | No | Buyer or seller credit |
| Total non-financed closing and prepaid items | $6,555 | No | Buyer or seller credit |
| Seller credit in this example | -$4,000 | Not applicable | Seller |
| Estimated buyer funds due at closing | $2,555 | No | Buyer |
This example does not include earnest money already paid, which is credited back to the buyer at closing. It also assumes the buyer does not receive an appraisal waiver, does not need specialized inspections, and is not buying acreage with a private well or septic system. Those details can materially change the final number.
What can a seller pay on a VA loan?
A seller can often pay customary closing costs and provide concessions within VA guidelines. The 4% concession limit is frequently misunderstood. Certain seller-paid items count toward that limit, while customary closing costs are treated differently. The purchase contract, closing disclosure, and program rules all matter, so this should be structured before an offer is submitted rather than corrected at the closing table.
For a $400,000 purchase, 4% equals $16,000. That does not automatically mean a buyer should request or use $16,000. Credits cannot exceed actual allowable costs, and a large credit request can affect offer strength in a competitive situation. On a well-priced home in Manakin-Sabot or near Tuckahoe Creek, a modest credit paired with clean terms may be more realistic than asking for the maximum.
The VA does not establish one universal minimum credit score. Many VA programs available through wholesale channels begin around 580, while 620 or higher commonly creates more options and smoother underwriting. Standard one-unit VA purchases may not require reserves, but a multi-unit home, a significant payment increase, or layered risk factors can call for documented reserves. Three to six months of payments is a practical planning target when the scenario is more complex.
Local factors that can move your closing number
Goochland County properties can bring expenses that a suburban buyer may not expect. A larger-lot home in Oilville, Sandy Hook, or Hadensville may need a well yield test, water quality test, septic inspection, survey review, or repair negotiation. These are not automatically VA closing costs, but they are real cash-planning items.
Goochland’s median sale price has hovered around the low-to-mid $500,000s in recent market reporting from Redfin, which means many local VA buyers are financing above the national conventional baseline rather than below it. VA eligible borrowers with full entitlement do not have a VA county loan limit, though the home still must appraise and fit the buyer’s income, credit, debt, and property eligibility profile.
For comparison, the Federal Housing Finance Agency’s 2025 baseline conforming loan limit was $806,500 for a one-unit property in most U.S. counties. That makes conventional financing viable for many Goochland purchases, but it does not make it automatically better. VA financing can be especially compelling when preserving cash for repairs, a move, or improvements to an older rural home matters more than making a down payment.
VA versus conventional and FHA closing costs
A VA loan is not the only path for a Virginia buyer. Conventional financing can work well for buyers with larger down payments, strong credit, or a desire to avoid a funding fee. FHA may help where credit flexibility is the priority, though it has its own upfront and monthly mortgage insurance costs. The right choice depends on the complete payment, cash-to-close amount, property type, and long-term plan.
For a $400,000 purchase, a conventional buyer putting 5% down needs $20,000 before closing costs. An FHA buyer putting 3.5% down needs $14,000 before closing costs. A VA buyer may need less upfront cash, particularly when the funding fee is financed and seller credits are negotiated. That does not mean the VA option always has the lowest long-term cost. A funding-fee exemption, rate difference, and expected time in the home can change the answer.
Frequently asked questions
How much are VA closing costs in Virginia?
Many VA buyers should plan for roughly 2% to 4% of the purchase price in closing costs and prepaid items before seller credits and earnest-money credits. The funding fee is separate and may be financed or waived for eligible borrowers.
Can VA closing costs be rolled into the loan?
The VA funding fee can generally be financed. Standard settlement charges, prepaid interest, insurance, and escrow deposits generally cannot be added to the base loan amount.
Does the seller have to pay VA closing costs?
No. A seller is not required to pay them, but seller credits are commonly negotiated as part of the purchase contract.
Are VA buyers exempt from the funding fee?
Some borrowers are exempt, including many veterans receiving qualifying service-connected disability compensation. Confirm your individual status through VA documentation.
What is the VA funding fee on a first-use purchase?
For many first-use, zero-down VA purchases, the funding fee is 2.15% of the base loan amount. The percentage can vary by use, down payment, and exemption status.
Can I use a VA loan for a home with a well and septic system?
Yes, if the property meets VA requirements and the well and septic systems are acceptable. Budget for inspections that may be prudent for rural properties.
Is there a minimum credit score for a VA loan?
The VA does not set one universal minimum. Many program options begin around 580, while a 620 score often provides broader options.
Can I buy above the conventional conforming limit with VA financing?
Eligible borrowers with full entitlement may purchase above the conforming limit without a VA-imposed county limit. Qualification still depends on appraisal and underwriting approval.
VA rules, funding-fee schedules, and local tax escrows can change, so use this as a planning example rather than a closing-cost quote. Before writing an offer, ask for a personalized estimate that accounts for the property, your exemption status, credit profile, earnest money, and the seller-credit strategy. A careful review up front can help you protect cash while keeping your offer practical for the home and market you are pursuing.
Legal disclaimer: This article is for general educational purposes only and is not a commitment to make a mortgage loan, an offer of credit, legal advice, tax advice, or a guarantee of approval, rate, costs, or closing date. Loan programs, VA eligibility, funding fees, underwriting requirements, property standards, and closing costs are subject to change. All loans are subject to credit, income, asset, appraisal, title, and program approval.