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VA Loans in Texas: No Down Payment Does Not Mean No Closing Costs
By Ross Monsen, NMLS #1579300 • Updated October 14, 2026
Quick answer: Eligible VA borrowers may finance a purchase without a down payment, but closing costs, prepaid expenses, and a possible funding fee still need to be considered.
Eligibility comes first
A Certificate of Eligibility helps establish the VA benefit. The lender also reviews credit, income, occupancy, and the property. Sufficient entitlement and an acceptable appraised value matter; no-down-payment financing is not automatic.
Understand the funding fee
VA generally charges a one-time funding fee unless the borrower qualifies for an exemption. The purchase-loan fee depends on prior use and down payment. Current VA guidance lists 2.15% for first use with less than 5% down and 3.3% for subsequent use with less than 5% down. Confirm exemption status and the applicable fee with your lender.
An illustrative purchase
Suppose an eligible first-use borrower buys for $400,000 with no down payment and is not exempt. At 2.15%, the funding fee would be $8,600. If financed, it increases the loan balance to $408,600 before considering any other permitted adjustments. This illustration is not a quote or approval.
Budget for the rest of the transaction
Ask about settlement charges, insurance, taxes, appraisal, and any negotiated seller contribution. On a VA purchase, the funding fee can generally be financed, while other closing charges require payment or an allowed credit arrangement. A no-down-payment loan can therefore still require cash at closing.
Before you write an offer
Ask for the COE review, an itemized cash-to-close estimate, and confirmation of the funding-fee exemption. If you previously used VA financing, have the lender review remaining entitlement before relying on a zero-down assumption.
Source: VA — Purchase loans • Source: VA — Funding fee and closing costs.
The Mortgage Standard Group, LLC • Company NMLS #2795757 • 4616 Gibson St, Houston, TX 77007.
Ross Monsen, NMLS #1579300 • 713-705-2889 • ross@thestandard.mortgage.
Educational information only; not a commitment to lend. All loans subject to eligibility, underwriting, property, and lender requirements.
Licensed in Texas by the Department of Savings and Mortgage Lending • Texas SML Mortgage Company License • Equal Housing Opportunity.
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