What Closing Costs Actually Run on a VA Loan in San Diego County
The funding fee, who is exempt from it, and the costs the VA will not let you finance.
The VA loan gets you in with nothing down. It does not get you in with nothing. That is the gap where people get surprised, usually about ten days before closing when the number shows up and nobody warned them.
None of it is a secret. It is just that most of what gets written about VA loans stops at "no down payment" because that is the fun part. Here is the rest.
The funding fee
This is the big one, and it is the one nobody sees coming. The VA charges a one-time fee on the loan. It is what keeps the program running without taxpayer money, which is a decent trade, but it is real money.
These are the current purchase rates, effective April 7, 2023, published by the VA:
| Down payment | First use | Used it before |
|---|---|---|
| Less than 5 percent | 2.15% | 3.3% |
| 5 percent or more | 1.5% | 1.5% |
| 10 percent or more | 1.25% | 1.25% |
On an $800,000 purchase with nothing down and first use, that is roughly $17,200. Second time using the benefit with nothing down, it is closer to $26,400. That is not a rounding error and it is worth knowing before you fall in love with a house.
The one piece of good news: the funding fee is the only closing cost the VA lets you roll into the loan. You do not have to bring it in cash. You will pay interest on it for thirty years, which is a real cost, but it does not have to come out of your savings at the table.
A lot of people are exempt and do not know it
You pay no funding fee at all if any of these apply:
- You receive VA compensation for a service-connected disability
- You are eligible for that compensation but take retirement or active duty pay instead
- You have a proposed or memorandum rating before closing
- You are a surviving spouse receiving Dependency and Indemnity Compensation
- You are active duty and provided evidence of a Purple Heart before closing
Check this before you assume the fee applies. On an $800,000 purchase it is a $17,000 question, and we have seen it caught late more than once.
What you cannot finance
Everything except the funding fee has to be paid at closing. Cash, seller credit, or lender credit, but paid. You cannot fold escrow fees or title insurance into the loan the way you can with the funding fee.
That is the sentence that catches people. "No down payment" and "nothing due at closing" are two very different statements, and only the first one is true.
What the costs actually are in San Diego County
Roughly three buckets. Lender charges, third party services, and California specific items.
Lender side
Origination, underwriting, processing, credit report, and the appraisal. The VA caps what a lender can charge in origination, which protects you from the worst of it. The VA appraisal here runs around $700 for a single family home and closer to $950 on a two to four unit property, because multi-unit requires supplemental reports.
Third party
Escrow fee, title insurance, notary, recording, and any inspections you order. A general home inspection in North County starts around $450 as of September 2026 and climbs with square footage. Add-ons stack on top of that. Pool, solar, sewer lateral, and termite each carry their own fee when the property has them. Inspection and appraisal figures per Paul Newell, United American Mortgage, September 2026. Confirm current pricing when you are ready.
California and San Diego County specific
County documentary transfer tax runs $1.10 per $1,000 of value, and in San Diego County it is customarily paid by the seller. Some cities add their own. Customary is not the same as required, so read your contract rather than assuming.
The part everyone confuses with closing costs
Prepaids and impounds are not closing costs, even though they show up on the same page and come out of the same pocket.
Your lender collects a few months of property taxes and homeowners insurance up front to seed the escrow account, plus interest from your closing date to the end of the month. That money is not a fee. It is your money, being paid early, for bills that would have come to you anyway.
It still has to be funded at closing. So when you are asking "what do I need to bring," the answer is closing costs plus prepaids, and a lot of online estimates only show you the first one.
The move that changes the number: seller concessions
A seller can contribute up to 4 percent of the reasonable value of the home toward things like your funding fee, prepaids, and certain debts. That is on top of the seller paying customary costs, and it is separate from a plain price reduction.
On an $800,000 purchase, 4 percent is $32,000 of room. In a market where a seller has been sitting for sixty days, asking for a credit instead of a price cut is very often the better trade for both sides. They protect the headline number, you keep cash in your pocket. That is a negotiation your agent should be running for you, not something you should have to bring up.
- Funding fee can be financed. Everything else cannot
- Many veterans are exempt and never check
- Prepaids are not fees, but they are still due
- Seller concessions up to 4 percent are the real lever
How to get a real number instead of an estimate
- Ask a lender who writes VA loans weekly for a Loan Estimate. It is a standardized federal form, so you can lay two lenders side by side and actually compare them. Any lender who will not produce one is telling you something.
- Confirm your funding fee status first. If you have a disability rating or a pending claim, say so up front.
- Ask for the total cash to close, not the closing costs. Those are different numbers and the second one is the one you have to come up with.
- Before you write an offer, decide whether you are asking for a seller credit. That is easier to build into the offer than to add later.
Related reading
What Your BAH Actually Buys in San Diego County covers the monthly payment side, including the four costs your allowance does not cover.
How Your VA Entitlement Works in San Diego County covers full versus partial entitlement and the property types that work.
Common questions
Can I roll all my closing costs into a VA loan?
No. Only the funding fee can be financed. Every other closing cost has to be paid at closing, whether from your own funds, a seller credit, or a lender credit.
How much is the VA funding fee?
For a purchase with nothing down, 2.15 percent on first use and 3.3 percent if you have used the benefit before. It drops to 1.5 percent with 5 percent down and 1.25 percent with 10 percent down. Those rates took effect April 7, 2023. Verify current rates at VA.gov before you rely on them.
Who pays closing costs on a VA loan?
Both sides pay some. In San Diego County there are customary splits, and on top of that a seller can contribute up to 4 percent of the home's reasonable value toward your costs. How that gets negotiated is a real part of what your agent is doing for you.
Am I exempt from the funding fee?
If you receive VA compensation for a service-connected disability, you are. So are several other groups including some surviving spouses and active duty Purple Heart recipients. Confirm your status with the VA or your lender rather than guessing, because it is often worth five figures.
Do I still need money at closing with a VA loan?
Usually yes. No down payment is not the same as nothing due. Closing costs and prepaids still have to be funded, though a seller credit can cover a large share of it when the deal is structured that way from the start.
There are no stupid questions. Not about entitlement, not about escrow, not about what a funding fee is. Text 760-274-0991 or email kyle@buyorsellsocal.com and tell us what you are working with. We will tell you what your options are. No pressure, no pitch.
VA funding fee rates shown are the purchase loan rates published by the U.S. Department of Veterans Affairs, effective April 7, 2023. Funding fees, loan limits, program rules, and interest rates change periodically. Verify current terms at VA.gov and with your lender. Escrow, title, transfer tax, inspection, and appraisal costs vary by property and provider and must be confirmed for any specific transaction. Customary cost splits are customary, not required, and are governed by your purchase contract. This page is general information, not lending, legal, or tax advice. Kyle Souza is a licensed California real estate agent, not a lender, attorney, or tax professional. Buy Or Sell SoCal Homes is not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any government agency. Questions for the VA directly: 1-877-827-3702 or VA.gov.
Kyle Souza · DRE# 01506738 · Keller Williams Carlsbad · Equal Housing Opportunity · Reviewed September 2026
