Quick Answer
A PCS buyer using a VA loan on a $350,000 San Antonio home in 2026 should budget $10,500 to $17,500 in total closing costs (3–5% of the loan amount), including the one-time VA funding fee of $7,525 for a first-time user with zero down. But that headline number overstates what comes out of your pocket: the funding fee can be financed into the loan, sellers can cover up to 4% in concessions, and disabled veterans are exempt from the fee entirely — so many military buyers close with very little cash. Here's the full breakdown.
The VA Funding Fee: Your Biggest Line Item
The VA funding fee is a one-time charge paid to the Department of Veterans Affairs at loan closing. It isn't lender profit — it funds the VA home loan program for future service members, and Congress sets the rates. The 2026 rate structure has been in effect since April 7, 2023, and it now applies the same way to active duty, veterans, and National Guard or Reserve members.
Here are the 2026 purchase-loan rates in one table — first-time and subsequent use side by side, with dollar amounts on a $350,000 purchase:
| Down payment | First-time use | Subsequent use |
|---|---|---|
| 0% (no down payment) | 2.15% · $7,525 | 3.30% · $11,550 |
| 5% to 9.99% | 1.50% · $4,987 | |
| 10% or more | 1.25% · $3,937 | |
Subsequent use means you’ve used the VA benefit before and haven’t restored full entitlement. Notice the rates converge once you put 5% down — the penalty for reusing the benefit only hits $0-down buyers.
The fee is calculated on the loan amount, not the purchase price — so if you do put money down, the fee shrinks twice (lower rate, lower base). I dug deeper into these rates in my VA funding fee rates guide for 2026.
Who's exempt
You pay zero funding fee if you receive VA compensation for a service-connected disability, are eligible for that compensation but receive retirement or active-duty pay instead, hold a proposed or memorandum disability rating before closing, received a Purple Heart, or are a surviving spouse receiving Dependency and Indemnity Compensation. For PCS buyers near JBSA — Lackland, Randolph, or Fort Sam Houston — this matters: a large share of relocating military families qualify for exemption, which removes the single largest closing cost entirely. Confirm your status early through your Certificate of Eligibility so your lender builds an accurate cash-to-close plan.
Financing the fee
You don't have to pay the funding fee in cash. In most cases you can roll it into the loan amount — a $350,000 purchase with a $7,525 fee becomes a $357,525 loan. The trade-off: you pay interest on the fee over the life of the loan. Or the seller can cover it as part of your 4% concession allowance.
Everything Else: The Rest of Your Closing Costs
Beyond the funding fee, VA closing costs look a lot like any other loan. For a typical San Antonio purchase in 2026:
- VA appraisal: $600–$900 (required by VA; the appraiser is assigned through the VA)
- Home inspection: $350–$600 (optional but strongly recommended — I never advise skipping it)
- Lender origination: capped by VA at 1% of the loan amount — $3,500 max on a $350,000 loan, and many lenders charge less
- Title examination and lender's title insurance: $700–$1,200
- Owner's title insurance: $1,000–$1,500 — and in most Texas counties, the seller customarily pays this
- Recording fees and taxes: $50–$150
- Credit report: $50–$75
- Survey: $400–$600 in many Texas transactions (varies by property)
- Prepaids and escrow: this is where Texas gets expensive — 2 to 6 months of homeowners insurance and property taxes funded at closing, since Texas property taxes are among the highest in the country
One note for PCS buyers: the VA caps lender charges by flat-rate rule. A VA lender may charge up to 1% as a flat charge instead of itemizing processing, underwriting, and document prep fees — not on top of them. Shop lenders on both rate and the flat charge.
Fees the VA Won't Let You Be Charged
This is one of the VA loan's real advantages. The VA maintains a list of non-allowable charges that a lender cannot pass to the veteran:
- Loan application or processing fees (covered by the flat 1%)
- Settlement or closing fees
- Document preparation fees
- Rate lock or commitment fees
- Notary fees
- Real estate commissions or brokerage fees
- Tax service fees
- Attorney fees beyond title work
- Postage, courier, and overhead charges
If any of these show up on your Loan Estimate with you as the payer, push back. On a conventional loan, many of these get padded in. On a VA loan, they're someone else's problem — usually the lender's or the seller's.
Seller Concessions: Up to 4% on a VA Loan
Here's the lever that changes the math for PCS buyers. On a VA loan, the seller can:
- Pay all of your normal closing costs (title, recording, origination, etc.), plus
- Up to 4% of the purchase price in additional concessions — which can cover discount points, prepaids, escrow setup, and the funding fee.
On a $350,000 home, that 4% concession allowance alone is $14,000. Combined with normal closing costs paid by the seller and a financed funding fee, a well-negotiated VA purchase can close with the buyer bringing only prepaid/escrow reserves — sometimes less. In San Antonio's market, where inventory has been more balanced than Austin's, sellers have been willing to cover $5,000 to $10,000 in buyer costs in many transactions.
This is a negotiation, not a guarantee. Your offer needs to ask for it explicitly in the contract, and your agent needs to read the market on how much is realistic for the specific neighborhood. It's one of the highest-leverage parts of what a buyer's agent does on a military transaction.
Texas-Specific Costs to Plan For
Property taxes and escrow. Texas has no state income tax, so property taxes carry the load. Bexar County's effective rates mean your monthly escrow will be significant — and your lender will want 2 to 6 months funded at closing plus reserves. This is the number that surprises out-of-state PCS buyers most. Budget for it even though it's "not a fee."
Homeowners insurance. Average annual premiums in Texas run roughly $2,900, and parts of the Hill Country near San Antonio can run higher due to storm and hail exposure. Get insurance quotes early — lenders need them to finalize your Loan Estimate, and last-minute quotes are where timelines slip.
San Antonio's HIP 120 program. If your household income is below 120% of area median income, the city's Homeownership Incentive Program (HIP 120) offers up to $15,000 toward down payment and closing costs. Military families with dual income sometimes clear the threshold, but it's worth checking — and state programs through TSAHC and TDHCA offer additional grants and low-interest second liens for qualifying buyers.
A Real-Dollar Example: $350,000 San Antonio Purchase
Let's put it together for a first-time VA user, zero down, financing the funding fee:
Here’s that same $350,000 example, split into what gets financed versus what actually comes out of your pocket:
| Item | Amount |
|---|---|
| Financed — rolled into the loan | |
| Purchase price | $350,000 |
| VA funding fee (2.15%, first-time use, $0 down) | $7,525 |
| Loan amount | $357,525 |
| Cash due at closing | |
| Origination (lender charges 0.75%; VA caps at 1%) | $2,682 |
| VA appraisal | $750 |
| Home inspection | $475 |
| Title + settlement charges | $1,800 |
| Recording fees | $100 |
| Credit report | $65 |
| Prepaid escrow (taxes + insurance, ~4 months) | $3,500 |
| Total cash to close | ~$9,370 |
Now apply a seller concession of $9,000: your out-of-pocket drops to under $400. That isn't a fantasy scenario — it's the structure military buyers use here regularly, as long as the appraisal supports the price. Bump the purchase to $500,000 (a typical range for Stone Oak or Alamo Heights) and scale everything proportionally: funding fee $10,750, total closing ~$13,000–$25,000, with the same 4% concession ceiling ($20,000) available.
PCS Timing: Getting the Documents Right on a Deadline
PCS buyers close on timelines civilians never face. Three documents matter most:
- The Loan Estimate — your lender must deliver it within 3 business days of your application. It itemizes every projected closing cost. Compare lenders on this document, not their advertised rates.
- The Closing Disclosure — final numbers, delivered at least 3 business days before closing. No surprises on closing day is the rule, not the exception.
- Your Certificate of Eligibility (COE) — confirms your entitlement and whether you're exempt from the funding fee. Get it early. Lenders can pull it in minutes through the VA portal, but if there's an entitlement restoration issue from a prior use, you'll want weeks — not days — to resolve it.
If you're buying while deployed or before you arrive in Texas, a specific power of attorney lets a spouse or trusted person sign at closing on your behalf. Texas title companies handle these routinely for military families — just don't show up with a general POA and assume it works. Your lender and title company will tell you exactly what the POA must say.
And plan your BAH around the reality of the San Antonio market: your housing allowance is a budget input, not a price target. Check the current BAH rates for the San Antonio area against actual payment scenarios before you fall in love with a neighborhood.
Four Ways to Lower Your Cash to Close
- Negotiate seller concessions up to 4%. The single biggest lever. Ask for it in the contract, not after inspections.
- Finance the funding fee. Adds ~$7,500 to the loan but removes it from cash to close.
- Take lender credits. Accept a slightly higher rate in exchange for the lender covering some closing costs. Run the break-even math against how long you'll keep the loan — PCS families move often, so credits usually win.
- Check your exemption status. If you have any service-connected disability rating, the funding fee disappears. If you received a rating with an effective date before your closing, you may even be due a refund.
FAQ
1) How much are VA loan closing costs in San Antonio in 2026? Expect 3% to 5% of the loan amount in total closing costs, including the VA funding fee. On a $350,000 home that's roughly $10,500 to $17,500 — though seller concessions of up to 4% and the ability to finance the funding fee can bring your actual cash to close down to near zero.
2) What is the VA funding fee in 2026? For a first-use purchase with no down payment, the 2026 funding fee is 2.15% of the loan amount ($7,525 on a $350,000 loan). It drops to 1.50% with 5% down and 1.25% with 10% down. Subsequent use is 3.30% with less than 5% down. Veterans receiving VA disability compensation are exempt entirely.
3) Can the seller pay my VA closing costs? Yes. On a VA loan, the seller can pay all of your normal closing costs plus up to 4% of the purchase price in additional concessions — which can cover discount points, prepaids, and the funding fee. In Texas, the seller also customarily pays for the owner's title insurance policy.
4) Can I roll VA closing costs into the loan? The VA funding fee can be financed into the loan amount in most cases, so it doesn't have to come out of pocket. Other closing costs generally cannot be rolled into the loan, but they can be offset with seller concessions or lender credits in exchange for a slightly higher rate.
5) What closing costs is a VA buyer NOT allowed to pay? The VA prohibits several fees from being charged to the veteran: loan application or processing fees, settlement/closing fees, document preparation fees, rate lock or commitment fees, notary fees, real estate commissions, tax service fees, and attorney fees beyond title work. The lender may charge a flat 1% origination charge instead of itemizing.
The Bottom Line
VA closing costs in San Antonio are some of the lowest in the country if you work the program's built-in advantages: capped lender fees, non-allowable charge protections, up to 4% in seller concessions, and a financeable funding fee. Most PCS buyers I work with are surprised at how little cash they actually need — the sticker shock comes from looking at the total cost line instead of the cash-to-close line.
If you're PCS-ing to San Antonio in 2026 and want a real cash-to-close estimate built around your orders, your entitlement, and your BAH, reach out. Educating. Serving. Delivering Results.
Contact Cody or call 830-360-5569.