VA Loan Closing Costs in Williamsburg, Virginia: What Military Buyers Actually Pay

HOW MUCH ARE VA LOAN CLOSING COSTS IN WILLIAMSBURG, VIRGINIA?

VA loan closing costs in the Williamsburg, Virginia area typically run between 3% and 5% of the loan amount. The largest expense for most military buyers is the VA funding fee, which is 2.15% of the loan amount for first-time use with no down payment, or 3.3% for subsequent use. Add in lender origination fees, title and settlement charges paid to a settlement agent, and prepaid expenses like homeowners insurance and property taxes, and on a $450,000 purchase in James City County or York County, plan for roughly $13,500 to $22,500 in total costs before seller concessions and lender credits are applied. Veterans with a service-connected disability rating of 10% or higher are exempt from the funding fee entirely.

By Jackie Berberabe | June 13, 2026 | Licensed Real Estate Agent & Military Relocation Professional, Real Broker LLC

There is a common misconception that VA loans cost nothing to close. It is easy to see where that idea comes from. No down payment. No private mortgage insurance. Those two things alone save military buyers tens of thousands of dollars compared to most conventional loans. But closing costs are a separate category, and they are very real.

What I hear from military buyers all the time is, "I thought VA loans were free." Then they see the Loan Estimate and the number is not what they expected. Understanding what is in that number, and what you can do to reduce it, is the whole point of this post.

I have helped hundreds of military families buy homes in the Greater Williamsburg area, many of them on tight PCS timelines. Here is exactly what to expect at the closing table.

THE VA FUNDING FEE: YOUR LARGEST UPFRONT COST

The VA funding fee is a one-time fee paid to the Department of Veterans Affairs. It helps fund the program for future generations of military buyers. For most people, it is the single biggest line item at closing.

Here is how the fee breaks down based on your loan use and down payment:

• First-time VA loan use, no down payment: 2.15% of the loan amount
• First-time use with 5–9.99% down: 1.65%
• First-time use with 10% or more down: 1.4%
• Second or subsequent use, no down payment: 3.3%

On a $450,000 loan with no down payment and first-time use, that funding fee is $9,675. On a second-use loan at the same price, it climbs to $14,850. These are not small numbers, and a lot of buyers underestimate them when they are building their budget.

Two important points. First, if you have a service-connected disability rating of 10% or higher, you are exempt from the funding fee entirely. Surviving spouses of veterans who died in service or from a service-connected disability also qualify for the exemption. If this applies to you, make sure your lender has your documentation before the loan closes. That one exemption can save you thousands.

Second, the funding fee can be rolled into the loan amount rather than paid at the table. That preserves your cash at closing but increases your loan balance and your monthly payment, so talk through both options with your lender.

LENDER FEES

Your lender can charge an origination fee of up to 1% of the loan amount. The VA sets that cap. On a $450,000 loan, that is a maximum of $4,500. Most VA-experienced lenders stay at or below this cap, and some charge less.

Beyond origination, you may see discount points if you are buying down your interest rate, plus administrative fees. Ask your lender for a Loan Estimate as early as possible in the process, and read it line by line. If anything is unfamiliar, ask before you sign.

THE SETTLEMENT TABLE IN VIRGINIA: WHAT IS DIFFERENT HERE

In Virginia, the closing is handled by a settlement agent rather than an escrow company. If you are relocating from a state that uses escrow, this distinction matters. The process looks a little different, and the terminology is different too.

As the buyer, you have the right in Virginia to choose your own settlement agent. I consistently recommend using a real estate attorney who also serves as the settlement agent. An attorney can review the contract and title for issues a title company alone might miss, and for a transaction of this size, that added layer of legal review is worth it.

Settlement fees in the Williamsburg area typically run $1,500 to $3,000. That covers title examination, preparation of closing documents, disbursement of funds, and recording. You will also pay for lender's title insurance (required by your lender) and owner's title insurance (strongly recommended to protect your investment).

PREPAIDS AND ESCROW SETUP

Prepaids are expenses paid in advance at closing. These are not fees for services. They are costs you would pay eventually anyway, but you pay them upfront at closing to fund your escrow account and cover the transition into homeownership.

They include:

• Homeowners insurance premium, usually one full year paid at closing
• Prepaid interest covering the days between your closing date and the end of the month
• Property tax escrow, funding the account with several months of taxes

The property tax amount depends on where in the Greater Williamsburg area you are buying. York County's current real estate tax rate is $0.78 per $100 of assessed value. James City County's rate is approximately $0.85 per $100. The City of Williamsburg has its own separate rate. Always confirm the current figures with your settlement agent before closing, since rates can change with the fiscal year.

On a $450,000 home in James City County, annual property taxes run roughly $3,825. Your lender will typically collect two to three months of taxes at closing to seed the escrow account.

HOA FEES AND INITIATION COSTS

Several of the most popular communities in the Greater Williamsburg area carry homeowners association fees. Kingsmill, Ford's Colony, Greensprings West, Windsor Forest, and Scott's Pond all have HOAs, and fees and initiation costs vary by community. If you are buying in one of these neighborhoods, budget for the HOA transfer fee, any initiation or capital contribution fee, and possibly a few months of dues at closing.

These come on top of your standard closing costs, so factor them in early. The good news is that the VA allows sellers to cover HOA initiation fees as part of their seller concessions, which leads directly to the most useful tool in your buyer's toolkit.

SELLER CONCESSIONS: YOUR MOST POWERFUL TOOL

The VA allows sellers to contribute up to 4% of the loan amount toward your closing costs. This is called a seller concession, and it is one of the most valuable aspects of buying with a VA loan.

Seller concessions can cover the VA funding fee, prepaid taxes and insurance, HOA initiation fees, and certain other closing costs. On a $450,000 loan, 4% is $18,000. Used strategically, that can cover the majority of your out-of-pocket costs at closing.

Whether you can negotiate concessions into your offer depends on market conditions, inventory, and the seller's situation. In a competitive multiple-offer scenario, a large concession request can cost you the deal. But when conditions allow, structuring your offer to include seller concessions is one of the smartest moves you can make.

This is exactly the conversation I have with every military buyer before we write an offer. Your offer has to work on multiple levels at once: price, terms, timeline, and how you are structuring your cash at closing. There is usually a way to get what you need without giving up the deal

WHAT THE NUMBERS LOOK LIKE ON A REAL PURCHASE

Here is a rough estimate for a $450,000 VA purchase in James City County with no down payment and first-time VA loan use:

• VA funding fee (2.15%): approximately $9,675
• Lender origination fee (1%): approximately $4,500
• VA appraisal: approximately $800
• Title insurance and settlement fees: approximately $2,000
• Prepaids (homeowners insurance, prepaid interest, tax escrow): approximately $4,500
• Estimated total: approximately $21,475

If the seller agrees to $10,000 in concessions, your cash to close drops to roughly $11,475. If you also roll the funding fee into the loan, your out-of-pocket amount at closing goes down further still.

Your specific numbers will vary based on your loan amount, credit profile, closing date, lender, and what you negotiate into the contract. Get a Loan Estimate from a VA-approved lender as early in your search as possible. That document gives you the itemized breakdown and lets you compare lenders accurately side by side.

Every situation is different, and the only way to know your real number is to run it with someone who knows this market and your loan. That is exactly what I walk my clients through before we start writing offers.

FREQUENTLY ASKED QUESTIONS

Can I roll my closing costs into my VA loan?
You can roll the VA funding fee into the loan amount, which is one of the few closing costs the VA allows to be financed. Most other closing costs need to be paid at closing or covered through seller concessions or lender credits. Rolling in the funding fee increases your loan balance and monthly payment, so run the numbers with your lender before you decide.

What is a settlement agent in Virginia, and who picks them?
In Virginia, the settlement agent handles the closing: reviewing the title, preparing documents, disbursing funds, and recording the deed. As the buyer, you have the right to choose your settlement agent. Many buyers use a real estate attorney in this role, which adds a layer of legal review that a title company alone does not offer. I recommend this approach for every transaction.

Are VA loan closing costs higher than a conventional loan?
It depends on how you look at it. VA loans do not require a down payment or PMI, which saves significant money compared to conventional financing. But the VA funding fee is an additional expense that conventional loans do not have. For most military buyers, the combined savings from no PMI and no down payment make the VA loan the better long-term deal, especially if you qualify for a funding fee exemption.

Who is exempt from the VA funding fee?
Veterans with a service-connected disability rating of 10% or higher are exempt. Surviving spouses of veterans who died in service or from a service-connected disability also qualify. If you believe you qualify, make sure your lender has your exemption documentation before your loan closes so it is properly reflected in your costs from the start.

Can the seller pay my closing costs with a VA loan?
Yes. The VA allows sellers to contribute up to 4% of the loan amount in concessions. That money can be applied to the VA funding fee, prepaids, HOA initiation fees, and certain other costs. Whether you can negotiate this into your offer depends on market conditions and the overall strength of your offer. Your agent can help you structure it in a way that is competitive while still working in your favor.

Closing costs are one of those things that catch people off guard when they have not been walked through them. Now you have the full picture. The key is getting your Loan Estimate early, understanding what each line item means, and working with your agent to structure your offer in a way that controls what you bring to the table without costing you the deal.

If you are PCS-ing to the Williamsburg area and working through the buying process, the Williamsburg Military Relocation Guide is a great place to continue. It covers the local market, VA loan process, neighborhoods near the bases, and the details that make a relocation go smoothly. Grab your copy here: https://jacquelinedeleon.lofty.me/military-relocation-guide

ABOUT JACKIE BERBERABE

Jackie Berberabe is a licensed real estate agent in the Commonwealth of Virginia and a Military Relocation Professional with Real Broker LLC, serving Greater Williamsburg, including James City County and York County. With more than 20 years of experience, she helps military families, relocating buyers, and local sellers move through every step from preparation to closing, with deep knowledge of VA loans and the local market. Reach Jackie at 757-870-1902 or jackie@goodtobeehome.com. Real Broker LLC, 855-450-0442.