VA limits certain borrower-paid lender charges and restricts some fees. Sellers may pay ordinary closing costs, while separate seller concessions are generally capped at 4% of the home’s reasonable value. The exact contract and Loan Estimate must still be reviewed.
Five buckets in a Michigan VA Loan Estimate
Origination, underwriting or related charges structured under VA’s borrower-fee rules.
Appraisal, credit, title, settlement, recording and other transaction services.
Homeowners insurance, property taxes and daily interest are not the same as lender fees.
A program fee that may be financed and may be waived for qualifying exempt borrowers.
The VA 1% origination rule
A lender may charge a flat origination fee of up to 1% of the loan amount instead of itemizing certain charges. How the lender structures the fee affects which additional costs the veteran may pay. A legal maximum is not proof that a quote is competitive—compare official Loan Estimates line by line.
Seller-paid costs versus seller concessions
VA treats ordinary closing costs and seller concessions differently. A seller can generally pay a veteran’s ordinary allowable closing costs without those payments counting toward the separate 4% seller-concession limit. Concessions can include items such as paying certain debts or prepaid expenses. The contract must identify credits clearly and stay within current VA rules.
Free standard VA appraisal credit at closing
Mike’s current offer provides a lender or broker credit equal to the actual standard VA appraisal charge on an eligible VA purchase loan that closes and funds through Mike Alkema and Leeward Point Mortgage LLC. It has no cash value and specialized or added appraisal charges may not be covered. Read the complete terms →
How to compare a Veterans United Loan Estimate
Use the same property, loan amount, lock period and assumptions. Then compare the interest rate, discount points, lender credits, Section A lender charges, total loan costs, cash-to-close and APR. Do not compare one lender’s locked quote with another lender’s floating estimate.