VA Loan Closing Costs in San Diego: What Military Buyers Actually Pay in 2026

Every week I sit down with a Sailor at 32nd Street, a Marine at Miramar, or a retiring Chief in Chula Vista who has been told the same thing: “VA loans are zero down, so you don’t need any money.”

Zero down is true. Zero cost is not.

A VA loan removes the down payment. It does not remove closing costs. On an $800,000 San Diego home — right around the county’s typical price point in 2026 — a military buyer should plan on roughly $9,000 to $16,000 in cash at closing, and that is before the VA funding fee.

Here is exactly where every dollar goes, which fees you are legally not allowed to pay, and how I hand a large piece of that money back to you at closing.

How Much Are VA Loan Closing Costs in San Diego in 2026?

VA loan closing costs in San Diego typically run 3% to 5% of the loan amount. On an $800,000 purchase with no down payment, that is roughly $24,000 to $40,000 in total transaction costs — but the veteran does not pay all of it. A large share is either prohibited by VA rule, paid by the seller, or covered by a buyer rebate.

Here is the honest breakdown on an $800,000 San Diego home, zero down, first-time use of the VA benefit:

• VA funding fee — 2.15% of $800,000 = $17,200 (usually financed into the loan, not paid in cash)
• VA appraisal — $800 to $1,100 in California
• Credit report — $50 to $110
• Lender’s title insurance and endorsements — approximately $1,100
• Recording fees — $150 to $250
• Loan origination fee — capped at 1% of the loan amount; many VA lenders charge less
• Prepaid interest — roughly $2,200 depending on your closing date
• First year of homeowners insurance — $1,600 to $2,800
• Property tax impounds — $2,800 to $4,200 (higher in Mello-Roos areas like Otay Ranch and EastLake)
• HOA transfer and document fees — $300 to $600 if applicable

Realistic cash to close for a San Diego military buyer on an $800,000 home: $9,000 to $16,000, with the funding fee rolled into the loan.

What Is the VA Funding Fee in 2026, and Who Is Exempt?

The VA funding fee is a one-time charge paid to the Department of Veterans Affairs. It is what keeps the VA loan program running without taxpayer subsidy, and it is the single largest line item on most VA closings. The current rates took effect April 7, 2023 and are unchanged for 2026.

First use of your VA benefit

• No down payment or less than 5% down — 2.15% of the loan amount
• 5% or more down — 1.5%
• 10% or more down — 1.25%

Subsequent use of your VA benefit

• No down payment or less than 5% down — 3.3% of the loan amount
• 5% or more down — 1.5%
• 10% or more down — 1.25%

On an $800,000 San Diego home with zero down, that is $17,200 the first time you use the benefit and $26,400 the second time. In almost every case the fee is financed into the loan rather than paid in cash.

Who pays no funding fee at all

You are exempt from the VA funding fee — a savings of $17,200 on that same $800,000 purchase — if any of the following apply:

• You receive VA compensation for a service-connected disability
• You are eligible for that compensation but receive retirement or active-duty pay instead
• You are a surviving spouse receiving Dependency and Indemnity Compensation (DIC)
• You have a proposed or memorandum rating before closing on a pre-discharge claim
• You are an active-duty service member who provided evidence of a Purple Heart on or before the closing date

If you have a disability rating and your Certificate of Eligibility does not show the exemption, do not close. Get it corrected first — refunds after closing are possible but slow.

VA Non-Allowable Fees: The Costs a Veteran Is Not Allowed to Pay

This is the part most San Diego buyers have never heard, and it is where a VA-experienced agent earns their keep. The VA specifically prohibits veterans from paying certain fees. Someone else — the seller, the lender, or the buyer’s agent — has to absorb them.

VA non-allowable fees include:

• Escrow and settlement fees — $1,800 to $2,600 on an $800,000 San Diego transaction
• Attorney fees
• Loan application fees
• Loan processing and underwriting fees beyond the 1% origination cap
• Document preparation fees
• Rate lock fees
• Notary fees
• Tax service fees
• Lender-ordered inspections
• Prepayment penalties
• Appraisals ordered by the lender, seller, or a third party rather than the veteran

In California, escrow is a separate service from title, and the escrow fee alone is thousands of dollars on a San Diego purchase. Because it is non-allowable, that money has to come from the seller side of the transaction — and getting that written into the contract correctly is the difference between a clean close and a surprise at signing.

The 1% origination rule

A VA lender may charge a flat origination fee of up to 1% of the loan amount. If they do, that 1% is the ceiling — they cannot then add processing, underwriting, or document prep charges on top of it. On an $800,000 loan, the maximum origination fee is $8,000, and plenty of competitive VA lenders in San Diego charge well under that.

Can the Seller Pay a Military Buyer’s Closing Costs?

Yes — and this is one of the most under-used tools in the VA program.

A seller can pay 100% of a VA buyer’s allowable closing costs. There is no cap on that. The 4% limit people talk about applies to seller concessions, which is a narrower category: paying off the buyer’s debt, funding an interest rate buydown, covering more than a normal amount of prepaids, or gifting personal property.

• Standard closing costs paid by seller — no VA limit
• Seller concessions — capped at 4% of the loan amount ($32,000 on an $800,000 loan)
• The VA funding fee does not count against the 4% concession cap

In a San Diego market where homes are going pending in about 20 days, asking a seller to cover costs takes a strategy, not just a checkbox. Sometimes the right move is a slightly higher offer price with costs credited back. Sometimes it is a shorter contingency period. That negotiation is my job.

Can a Veteran Pay Their Own Agent’s Commission in 2026?

Yes. This changed and it matters.

Before August 2024, the VA flatly prohibited a veteran from paying their own buyer’s agent. After the NAR commission settlement restructured how buyer agents get paid, the VA issued Circular 26-24-14, “Temporary Local Variance for Certain Buyer-Broker Charges,” effective August 10, 2024, allowing VA borrowers to pay reasonable and customary buyer-broker fees. Change 1 to that circular remains valid until rescinded, and the amount the veteran pays is recorded in Section H of the Closing Disclosure.

Two conditions still apply, and San Diego buyers get tripped up by both:

• The buyer-broker fee cannot be financed into the VA loan. It must come from the buyer’s own funds or from seller concessions.
• If the seller pays it as a concession, it counts against the 4% seller concession cap.

Which brings up the obvious question: what if your agent gives you money instead of charging you for it?

How the 1% Buyer Rebate Covers Most of a Military Buyer’s Closing Costs

I represent buyers across San Diego County and I give up to 1% of the purchase price back to my client at closing. On an $800,000 home, that is $8,000 in your pocket.

Put that next to the numbers above. A San Diego military buyer on an $800,000 home is looking at $9,000 to $16,000 in cash to close. An $8,000 rebate covers roughly half to all of it.

Where the rebate is applied is your choice:

• Toward closing costs and prepaid items at settlement
• Toward buying down your interest rate
• As a down payment, if you want to reduce the funding fee tier
• As a check after closing, if your lender prefers it structured that way

California permits real estate commission rebates, and the IRS treats a buyer rebate as an adjustment to the purchase price rather than taxable income — but confirm your specific situation with your CPA. I am a Realtor, not a tax advisor.

VA Closing Costs by San Diego Price Point

San Diego County is not one market. Here is what cash to close looks like across the price ranges military families actually buy in, assuming zero down, first use of the benefit, and no funding fee exemption:

• $650,000 — El Cajon, Santee, parts of Oceanside: funding fee $13,975 financed; approximately $8,000–$13,000 cash to close; rebate up to $6,500
• $800,000 — Chula Vista, Escondido, San Marcos: funding fee $17,200 financed; approximately $9,000–$16,000 cash to close; rebate up to $8,000
• $950,000 — Carlsbad, Bonita, parts of Point Loma: funding fee $20,425 financed; approximately $11,000–$19,000 cash to close; rebate up to $9,500
• $1,200,000 — Coronado, La Jolla, Del Mar: funding fee $25,800 financed; approximately $14,000–$24,000 cash to close; rebate up to $12,000

If you have a service-connected disability rating, delete the funding fee line from every one of those rows. That is the single biggest cost swing in the entire VA program.

The Bottom Line for San Diego Military Buyers

San Diego County is home to more than 115,000 active-duty service members and over 230,000 veterans. You would think that would make every agent here a VA expert. It does not. Most agents in this county have closed a handful of VA transactions and do not know what a non-allowable fee is, let alone how to get the seller to cover one.

Here is what a military buyer should walk away knowing:

• Zero down does not mean zero cash. Budget $9,000 to $16,000 on an $800,000 San Diego home.
• The funding fee is 2.15% on first use and is normally financed, not paid in cash.
• A service-connected disability rating waives the funding fee entirely.
• There is a list of fees you are legally not allowed to pay. Make sure your agent knows it.
• Sellers can pay all of your allowable closing costs, with no VA cap.
• My buyer rebate returns up to 1% of the purchase price to you at closing — $8,000 on an $800,000 home.

I have spent 15 years closing transactions across San Diego County, from Chula Vista to Oceanside, and I am bilingual in English and Spanish. If you are PCSing in, separating, or using your benefit for the first time, let’s run your actual numbers before you write an offer.

Frequently Asked Questions

How much are VA loan closing costs in San Diego?

VA loan closing costs in San Diego typically run 3% to 5% of the loan amount. On an $800,000 home with zero down, a military buyer should expect roughly $9,000 to $16,000 in cash at closing, plus a VA funding fee of $17,200 that is usually financed into the loan rather than paid up front.

What is the VA funding fee in 2026?

For first use of the VA benefit with no down payment, the funding fee is 2.15% of the loan amount. It drops to 1.5% with 5% down and 1.25% with 10% down. Subsequent use with no down payment is 3.3%. These rates took effect April 7, 2023 and are unchanged in 2026. Veterans receiving compensation for a service-connected disability are exempt.

What fees can a veteran not pay on a VA loan?

The VA prohibits veterans from paying escrow and settlement fees, attorney fees, loan application fees, processing and underwriting fees beyond the 1% origination cap, document preparation fees, rate lock fees, notary fees, tax service fees, lender-ordered inspections, and prepayment penalties. These non-allowable fees must be paid by the seller, the lender, or the buyer’s agent.

Can the seller pay all of a VA buyer’s closing costs in California?

Yes. There is no VA limit on how much of a buyer’s allowable closing costs a seller can pay. The separate 4% cap applies only to seller concessions, such as paying off buyer debt, funding an interest rate buydown, or covering more than a normal amount of prepaid items. The VA funding fee does not count toward the 4% cap.

Can a San Diego military buyer get money back at closing?

Yes. California permits real estate commission rebates, and Justin Santolaya returns up to 1% of the purchase price to his buyer clients at closing — $8,000 on an $800,000 San Diego home. That rebate can be applied toward closing costs, prepaid items, an interest rate buydown, or a down payment.

Buying a home in San Diego with your VA loan? Get a free VA closing cost estimate from Justin Santolaya — San Diego’s 1% Realtor and buyer rebate specialist. No pressure, no obligation. Just your real numbers.