What Does a VA Loan Cost at Closing in Connecticut?

October 6, 2026

The short answer: a VA loan can cover 100% of the purchase price, but it is not free to close. Most first-time VA buyers pay a one-time VA funding fee of 2.15% of the loan, which can be rolled into the loan, plus normal Connecticut closing costs like the attorney, title insurance, and prepaid taxes. Veterans who receive VA disability compensation pay no funding fee at all, and the seller can credit up to 4% of the home's value toward your costs.

What the VA funding fee is

The funding fee is a one-time charge paid to the VA, not to your lender. It keeps the program running so it can offer zero down and no monthly mortgage insurance. It depends on three things: whether this is your first VA loan, how much you put down, and what kind of loan it is.

Purchase loans (rates the VA has used since April 7, 2023):

First VA loan, less than 5% down: 2.15%
Second or later VA loan, less than 5% down: 3.3%
5% or more down, any use: 1.5%
10% or more down, any use: 1.25%

Refinances: a VA cash-out refinance is 2.15% on first use and 3.3% after that. A VA streamline refinance (IRRRL) is 0.5%.

On a purchase, the funding fee is the one closing cost the VA lets you finance into the loan. Everything else is paid at closing or covered by credits.

Who pays no funding fee

You are exempt if any of these apply:

You receive VA compensation for a service-connected disability, or you are eligible for it but receive retirement or active-duty pay instead.
You are a surviving spouse receiving Dependency and Indemnity Compensation.
You are an active-duty service member with a proposed or memorandum disability rating before closing.
You are on active duty and provide evidence of a Purple Heart by closing.

The exemption shows on your Certificate of Eligibility. If you think you qualify and your certificate does not say so, fix that before you close, not after.

A worked example (illustrative numbers)

Say you are buying a $400,000 home in Connecticut on your first VA loan.

Zero down: 2.15% of $400,000 is $8,600. Financed into the loan, your loan amount becomes $408,600 and you bring none of the fee to closing.
5% down ($20,000): the fee drops to 1.5% of $380,000, or $5,700.
Exempt (disability compensation): $0 funding fee, and the loan stays at $400,000.

That last line is why the exemption matters. On the same house, it is worth $8,600.

The rest of your Connecticut closing costs

The funding fee is only part of it. A Connecticut VA buyer typically also pays for:

Your closing attorney. Connecticut purchases close with an attorney.
Lender's title insurance and recording fees at the town clerk.
The VA appraisal and a credit report.
Prepaids and escrows: homeowners insurance and a cushion of property taxes, which in Connecticut can be the biggest single line.
Lender fees. The VA limits which fees a lender can charge a veteran, and AFC does not add a separate VA fee. The funding fee goes to the VA, and your Loan Estimate lists every lender charge up front.

The good news: Connecticut's state conveyance tax is paid by the seller, not the buyer. For a full line-by-line look, read understanding closing costs.

How to bring less cash to closing

Ask for seller concessions. The seller can pay your normal closing costs. On top of that, the VA allows concessions of up to 4% of the home's reasonable value, which can go toward your funding fee, prepaid insurance, or paying off a debt to help you qualify.
Finance the funding fee. It is the one cost the VA lets you roll into the loan on a purchase.
Check your exemption. A disability rating, even one proposed before closing, can remove the fee entirely.
Ask your town assessor about veterans' property tax exemptions. Connecticut towns offer them, the amounts vary by town, and you have to apply.

Why the lender you pick matters

VA rules are the same everywhere, but how smoothly the loan closes is not. AFC is a direct lender: our in-house Approval Team reviews your file, which means fewer handoffs between your offer and your Green Light. If you are comparing VA lenders in Connecticut, start with our VA loans page, or see how VA stacks up against FHA, USDA, and conventional loans.

Want your real numbers, funding fee included? Call or text our team at (203) 452-9899, or get pre-approved.

VA closing cost questions

How much is the VA funding fee in 2026?

For a purchase with less than 5% down, it is 2.15% of the loan on your first VA loan and 3.3% on later ones. It drops to 1.5% with 5% down and 1.25% with 10% down. A VA streamline refinance is 0.5%.

Can I roll the VA funding fee into my loan?

Yes. On a purchase, the funding fee is the only closing cost the VA lets you finance into the loan amount.

Who is exempt from the VA funding fee?

Veterans who receive VA compensation for a service-connected disability, surviving spouses receiving Dependency and Indemnity Compensation, service members with a proposed or memorandum rating before closing, and active-duty Purple Heart recipients.

Can the seller pay my VA closing costs?

Yes. The seller can pay your normal closing costs, plus concessions of up to 4% of the home's reasonable value toward things like the funding fee or prepaid insurance.

Do VA loans have mortgage insurance?

No. VA loans have no monthly mortgage insurance. The one-time funding fee is what replaces it.