Down Payment & Closing Costs

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 $726,200, you will not need to make a down payment.

Here's an illustration of how significant this benefit is 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 a home, ask your VA loan 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.
  
• Or, you may be able to have a cash-out refinance. Generally, the purpose for which the cash-out proceeds will be used are subject to approval by the lender.
  

• Purchase and rate & term refinances will allow the Veteran to borrow 100% of the value of the home or purchase price plus the VA funding fee. Cash-out refinances limit loan amounts to 90% of the value of the home plus the VA funding fee.
  
• 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.