Clearances For Va/Fha Loans
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$3 – $5
of the loan amount
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What most Petaluma homeowners pay at each tier.
Lower end of closing costs, potentially with some seller concessions or for smaller loan amounts.
Average closing costs including the VA funding fee and standard processing fees for most loan amounts.
Higher end of closing costs, possibly for larger loan amounts or with certain additional fees.
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Common questions about costs and estimates for this service.
The "1 percent rule" is a guideline established by the VA regarding the maximum amount Veterans can be charged for certain non-allowable fees. This flat 1 percent fee covers the lender's costs associated with originating, processing and underwriting the loan.
There is no government program handing out a $42,000 check to knock down your mortgage balance. What's being marketed is the savings veterans can realize by using their VA loan benefit instead of a conventional or FHA loan.
The VA limits seller concessions to 4% of the home's reasonable value, while allowing unlimited seller credits for normal closing costs. This is a two-bucket rule, not one cap. The key is that the cap applies only to “extras” beyond standard closing costs, and it's based on the VA Notice of Value—not your loan amount.
While VA loans are known for having lower overall closing costs and often no down payment, specific situations can vary. Both VA and FHA loans have limitations on certain fees, but the final cost will depend on the loan amount, lender fees, and any negotiated seller concessions. It's best to compare Loan Estimates for both types of loans if you qualify for both.
While the VA funding fee can often be financed into the loan amount, most other closing costs for VA loans typically need to be paid upfront at closing. However, sellers can contribute up to 4% in concessions, which can help offset some of these out-of-pocket expenses. It's important to discuss all financing options with your lender.