The Veterans Administration helps veterans and their families achieve the American dream of home ownership. As there are a lot of closing costs associated with buying a home, many of them must be paid, but others are not allowed by the Veterans Administration.
Costs that are not allowed by the VA
The homeowner may not pay certain costs. Among them are:
- Lender's attorneys fees
- Mortgage broker commissions or brokerage fees
- Real estate agent or broker commissions
- Lender or seller fees associated with appraisal for a Reconsideration of Value
- The cost of lender appraisals
The costs can't be paid by the veteran, but they can be picked up by the lender or the real estate agent.
Costs that are allowed by the VA
There are two major divisions of expenses in closing costs: prepaid finance charges (PFC) and paid outside closing (POC).
PFC costs, related to the mortgage, that the veteran can be asked to pay include:
- Escrow for prepaid interest, homeowner insurance, and property taxes
- The VA Funding Fee, a cost the VA charges, but the veteran can include it in the loan or even ask the seller to pay
- Points for buying down the interest rate
- Homeowner association fees
- Loan origination, underwriting, and processing fees
- A survey
- Title exam and insurance
Other costs that are allowed, the POC fees, that still need to be paid include:
- Credit reports
- Pest inspection fees
- Home inspection if the buyer requests one
- The mandatory VA appraisal
The most important thing to know is that veterans deserve to own their own homes and the VA, with many programs designed to make that easier, helps to make that possible.
There are also many lenders and even agents that specialize in assisting veterans to find the right home, the right loan, and the right help to make this dream a reality.