How much are FHA closing costs?

On a $285,000 home with 3.5 percent down: $9,644 in cash closing costs plus a $9,975 down payment, for $19,619 cash to close. The 1.75 percent upfront MIP ($4,813) is financed into the loan, not paid in cash.

What is the VA funding fee in 2026?

2.15 percent of the loan for first-time use ($9,675 on a $450,000 zero-down loan) and 3.3 percent for subsequent use. It is usually financed. Veterans with a service-connected disability rating are exempt.

Is FHA or conventional cheaper overall?

FHA is cheaper at the table ($30,984 vs $103,906 cash to close on $450,000) but the 0.55 percent annual MIP lasts the life of the loan, while conventional PMI drops off. Price the lifetime, not just closing day.

Can the seller pay my FHA closing costs?

Yes, up to 6 percent of the price in seller concessions — $17,100 on the $285,000 example, which covers the entire $9,644 cash closing bill.

Do VA loans have mortgage insurance?

No monthly mortgage insurance at all — that is the VA loan's biggest long-term advantage over FHA. The one-time funding fee replaces it.

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The Ledger · Closing costs

FHA and VA Closing Costs Explained

FHA: 3.5% down, a 1.75% upfront premium, and insurance for the life of the loan. VA: 0% down, a 2.15% funding fee, no monthly insurance ever. Every line priced, all three loans compared at the table.

Filed October 21, 2026 · figures checked against 2026 sources

The short answer

Government-backed loans trade a small down payment for extra fees at closing. FHA requires just 3.5 percent down but adds a 1.75 percent upfront mortgage insurance premium — $4,813 on a $275,025 loan, financed into the balance. VA requires zero down but charges a 2.15 percent funding fee for first-time use ($9,675 on a $450,000 loan) or 3.3 percent for subsequent use, also financed. The worked examples: an FHA purchase of a $285,000 home lands at $9,644 in cash closing costs on top of a $9,975 down payment; a zero-down VA purchase of a $450,000 home lands at $14,840 at the table with nothing down.

$4,813

The FHA upfront mortgage insurance premium on a $275,025 loan — 1.75%, financed into the balance rather than paid in cash (matches the published ClosingCost.us example to the dollar).

FHA, line by line: the $285,000 example

The minimum FHA down payment is 3.5 percent: $9,975 on $285,000, leaving a $275,025 loan. Every line, from this site's published model (Florida, where the buyer's transfer-tax share is zero):

Line	Cost
Lender charges (origination, underwriting, appraisal, credit)	$3,208
Title & settlement	$3,175
Transfer tax (buyer share, FL)	$0
Prepaids & escrow (interest $791, insurance $997, tax $784, escrow $689)	$3,261
Cash closing costs	$9,644
Upfront MIP, 1.75% — financed, not cash	$4,813
Cash to close ($9,975 down + $9,644)	$19,619

Two FHA facts that surprise first-time buyers. First, the upfront MIP is financed — the loan becomes $279,838, not $275,025 — so it costs interest for thirty years. Second, FHA also charges annual MIP (0.55 percent for most 2026 loans) as part of the monthly payment, and unlike conventional PMI it does not automatically fall off at 78 percent loan-to-value; it lasts for the life of the loan unless you refinance out. The 3.5-percent down payment is real, and so is the insurance bill that comes with it.

VA, line by line: the $450,000 zero-down example

The VA loan's headline is zero down payment, and it means it: $0 down on $450,000. The trade is the funding fee — 2.15 percent of the loan for first use, 3.3 percent for subsequent use — which most borrowers finance:

Line	First use	Subsequent use
Lender charges	$4,520	$4,520
Title & settlement	$4,000	$4,000
Transfer tax (buyer share, US avg)	$1,125	$1,125
Prepaids & escrow	$5,195	$5,195
Cash closing costs	$14,840	$14,840
Funding fee — financed, not cash	$9,675	$14,850
Cash to close ($0 down + costs)	$14,840	$14,840

The VA advantage compounds: no down payment, no monthly mortgage insurance at all, and the funding fee — while large — is a one-time charge. Veterans with a service-connected disability rating are exempt from the funding fee entirely, which makes the VA loan the cheapest closing in the industry for those who qualify: $14,840 at the table, $0 down, no monthly MI.

FHA vs VA vs conventional, at the table

Same $450,000 home, three loans, cash to close:

	Conventional 20% down	FHA 3.5% down	VA 0% down
Down payment	$90,000	$15,750	$0
Cash closing costs	$13,906	$14,676*	$14,840
Financed fees	$0	$7,599	$9,675
Cash to close	$103,906	$30,426	$14,840
Monthly MI	none	0.55%/yr, life of loan	none

The table is the whole story of low-down-payment lending: the cash barrier collapses (from $103,906 to $14,840), and the cost moves into the loan balance and the monthly payment instead. Neither is free; they are different shapes of the same money.

The boxed insight

FHA's 3.5 percent down is the cheapest door in homebuying — $19,619 at the table on a $285,000 home — but the most expensive hallway: the 1.75 percent upfront premium plus 0.55 percent annual MIP for the life of the loan. Buyers who can reach 5 percent down on a conventional loan often pay less in total despite the bigger check at the table, because conventional PMI falls off and FHA's MIP does not. Price the loan's lifetime, not just the closing day.

The fine print both loans share

Both programs cap what the seller can contribute: FHA allows up to 6 percent of the price in seller concessions — on the $285,000 example, that is $17,100, which covers the entire $9,644 cash closing bill with room to spare. Both require the property to meet minimum standards (the FHA appraisal checks condition, not just value). And both sets of fees change: the VA updates its funding-fee schedule and the FHA its MIP rates from time to time, so confirm the current schedule with your lender rather than trusting any article — including this one — for the exact basis points. The structure above is stable; the digits move.

Sources: ClosingCost.us 2026 FHA example, $4,813 upfront MIP on the $285,000/3.5%-down scenario (https://closingcost.us/); FHA upfront MIP 1.75% and annual MIP schedule, HUD; VA funding fee schedule 2.15%/3.3%, U.S. Department of Veterans Affairs; FHA 6% seller-concession limit; worked figures from this site's published closing-cost model.

Questions about FHA and VA costs

How much are FHA closing costs?: On a $285,000 home with 3.5 percent down: $9,644 in cash closing costs plus a $9,975 down payment, for $19,619 cash to close. The 1.75 percent upfront MIP ($4,813) is financed into the loan, not paid in cash.
What is the VA funding fee in 2026?: 2.15 percent of the loan for first-time use ($9,675 on a $450,000 zero-down loan) and 3.3 percent for subsequent use. It is usually financed. Veterans with a service-connected disability rating are exempt.
Is FHA or conventional cheaper overall?: FHA is cheaper at the table ($30,984 vs $103,906 cash to close on $450,000) but the 0.55 percent annual MIP lasts the life of the loan, while conventional PMI drops off. Price the lifetime, not just closing day.
Can the seller pay my FHA closing costs?: Yes, up to 6 percent of the price in seller concessions — $17,100 on the $285,000 example, which covers the entire $9,644 cash closing bill.
Do VA loans have mortgage insurance?: No monthly mortgage insurance at all — that is the VA loan's biggest long-term advantage over FHA. The one-time funding fee replaces it.