Closing costs on a Richmond-area home typically run between 2% and 5% of the loan amount, but the exact number depends heavily on which loan program you choose. A buyer using a VA loan, an FHA loan, and a Conventional loan on the same house will see three different closing cost totals, and the differences come down to mortgage insurance structure, funding fees, and how much seller-paid assistance each program allows. This guide breaks down what’s included in Virginia closing costs, how FHA, VA, and Conventional loans compare, and walks through a real dollar example using city-of-Richmond pricing so you know what to expect before you sit down at the settlement table.
Richmond-Area Closing Cost Snapshot
According to the Consumer Financial Protection Bureau, closing costs generally range from 2% to 5% of the total loan amount, and that range holds true across most of the Richmond market as of 2026. On a typical city-of-Richmond purchase, that translates into several thousand dollars in fees on top of any down payment, which is why buyers need a realistic number well before they get to the settlement table.
What changes that 2% to 5% range isn’t the house, it’s the loan program. VA loans strip out private mortgage insurance but add a funding fee. FHA loans require an upfront mortgage insurance premium that can be rolled into the loan balance. Conventional loans skip upfront mortgage insurance entirely but may carry monthly PMI depending on your down payment and credit profile. Program choice also affects who’s allowed to pay what, since VA and FHA both permit higher seller-paid concession caps than many buyers assume, while conventional guidelines tie concession limits to your loan-to-value ratio.
Duane Buziak, NMLS #1110647, works as both a broker and a lender with access to hundreds of wholesale lenders, which matters here because closing cost structures and lender credit options vary from one wholesale investor to the next. That access lets buyers compare fee structures across programs rather than accepting a single lender’s default pricing. Whether you’re weighing a VA purchase against a conventional loan, or trying to decide if FHA’s upfront premium is worth the lower credit score threshold, the program comparison matters more than shopping for a marginally lower rate. The sections below walk through exactly what’s inside a Virginia closing disclosure, how the three major programs stack up, and what those numbers look like on an actual Richmond-area purchase price.
What’s Included in Virginia Closing Costs
Closing costs are not the down payment. That’s one of the most common points of confusion for first-time buyers, and it’s worth stating plainly: your down payment is equity you’re putting into the home, while closing costs are fees paid to originate the loan, verify the property, and transfer title. Both are due at settlement, but they’re calculated and disclosed separately on your Closing Disclosure.
Closing costs generally fall into three buckets. Lender fees cover origination and underwriting, the administrative work of processing, verifying, and funding your loan. Third-party fees include the appraisal, title insurance, a title search, and recording fees paid to the local circuit court clerk to record the deed and deed of trust. Prepaid items cover the first year of homeowners insurance, property tax reserves, and per-diem interest for the days between closing and your first mortgage payment, all of which get deposited into your escrow account.
Virginia has a few line items that surprise out-of-state buyers. The state grantor’s tax is typically a seller-side cost, calculated on the sale price, and it shows up on the settlement statement even though the buyer isn’t the one paying it. Recording fees vary by locality, so a deed recorded in the City of Richmond may carry slightly different fees than a deed recorded in a neighboring jurisdiction. Title insurance in Virginia is priced by the title company or attorney handling settlement, and buyers can shop this service separately from their loan.
One more distinction worth knowing: your Loan Estimate, the standardized three-page disclosure you receive after applying, itemizes every projected closing cost by category. Federal disclosure rules require lenders to issue this within three business days of a completed application, which gives you a documented, apples-to-apples number to compare against any other lender’s quote.
Closing Costs by Loan Program: VA, FHA, and Conventional
VA loans require no down payment, which is the program’s signature benefit, but they add a VA funding fee that’s calculated as a percentage of the loan amount. Per va.gov, this fee varies based on whether it’s your first use of the benefit, your down payment amount, and whether you’re a first-time or subsequent user. Veterans with a service-connected disability rating are exempt from the funding fee entirely, which can meaningfully reduce total closing costs. The fee can be financed into the loan balance rather than paid in cash at closing, which is one reason VA closing costs often feel lighter out-of-pocket even though the fee itself isn’t small.
FHA loans require a 1.75% upfront mortgage insurance premium, known as UFMIP, calculated on the base loan amount, per hud.gov program guidance. Like the VA funding fee, UFMIP can be financed into the loan rather than paid in cash. Unlike VA loans, FHA also carries an ongoing annual mortgage insurance premium collected monthly for most of the loan’s life, which isn’t a closing cost itself but factors into your overall cost of borrowing and is worth weighing against a conventional PMI structure.
Conventional loans skip upfront mortgage insurance altogether. If your down payment is at least 20%, you avoid mortgage insurance entirely. Below that threshold, you’ll carry monthly PMI, and the cost of that PMI is driven by your credit score and debt-to-income ratio, not a flat percentage like FHA’s UFMIP. A borrower with strong credit and a low DTI can sometimes secure PMI that’s cheaper than FHA’s combined upfront-plus-annual structure, while a borrower with marginal credit may find FHA more affordable overall. This is exactly the kind of program-vs-program math worth running before you commit, since the “cheapest closing costs” program on paper isn’t always the cheapest loan over time.
Worked Example: Closing Costs on a Richmond-Area Home Purchase
To make this concrete, consider a Richmond-area purchase priced at $375,000, a figure consistent with recent city-wide median pricing reported by Zillow’s Richmond home value data. Using the CFPB’s 2% to 5% framework, a buyer should budget roughly $9,375 to $18,750 in closing costs before factoring in program-specific fees. A reasonable planning estimate at 3% lands at $11,250.
Now layer in the program differences. On a VA loan with no down payment, the loan amount stays at $375,000, and a first-time-use funding fee (assuming no exemption) adds a percentage of that loan amount, often financed into the balance rather than paid at closing. So the buyer’s estimated cash-to-close might be limited to the roughly $11,250 in standard closing costs, since the funding fee is rolled in rather than paid out of pocket, and no down payment is required at all.
On a Conventional loan with 5% down, the buyer puts $18,750 toward the purchase price as a down payment, on top of the $11,250 in estimated closing costs, for total cash needed of roughly $30,000. That’s the delta: the VA path requires no down payment and can finance its funding fee, while the conventional path requires real cash down in addition to closing costs. If the buyer instead puts 20% down conventionally to avoid PMI, that’s $75,000 down plus closing costs, a very different cash requirement entirely.
At $375,000, this purchase sits comfortably under the 2026 Richmond-metro conforming loan limit of $832,750, according to FHFA data, so it qualifies for standard agency pricing rather than jumbo underwriting. Buyers shopping above roughly $832,750 in the Richmond metro should expect jumbo guidelines, which often carry higher down payment requirements and additional reserve documentation, both of which change the closing cost and cash-to-close picture significantly.
FHA vs. VA vs. Conventional Closing Costs Compared
The table below lines up the three programs on the factors that most affect your total cash needed at settlement.
| Feature | FHA Loan | VA Loan | Conventional Loan |
|---|---|---|---|
| Minimum down payment | 3.5% | 0% | 3% to 20% |
| Upfront mortgage insurance | 1.75% UFMIP (financeable) | VA funding fee (financeable, waivable for eligible disability rating) | None |
| Ongoing mortgage insurance | Monthly MIP, most of loan term | None | Monthly PMI if under 20% down, removable over time |
| Seller concession cap | Up to 6% of purchase price | Up to 4% of purchase price plus reasonable closing costs | Typically 3% to 9%, tied to loan-to-value |
| Typical closing cost range | 2% to 5% of loan amount | 2% to 5% of loan amount | 2% to 5% of loan amount |
The seller concession row deserves attention. Both VA and FHA allow higher concession caps than many buyers realize, which means a well-negotiated purchase contract can shift a meaningful share of closing costs onto the seller rather than the buyer, particularly in a market where sellers are motivated. Conventional concession limits scale with your down payment: a buyer putting down less than 10% can typically negotiate seller credits up to 3%, while a buyer putting 25% or more down may negotiate up to 9%.
For buyers who’d rather not tie up cash at settlement, no-out-of-pocket closing options let you structure lender credits or a slightly higher rate in exchange for reduced upfront costs, effectively building the expense into the loan rather than paying cash on closing day. This isn’t free money, it’s a trade-off between upfront cash and long-term rate, but it’s a legitimate tool worth discussing with your loan officer if liquidity matters more to you than shaving basis points off your rate.
Closing Cost FAQ for Virginia Homebuyers
How much are closing costs in Virginia? Closing costs in Virginia typically run 2% to 5% of the loan amount, varying by loan program, lender fees, and locality-specific recording charges.
Who pays closing costs in Virginia? Buyers generally pay their own lender and third-party fees, while sellers typically pay the state grantor’s tax and can agree to cover a portion of buyer costs through negotiated concessions.
Can VA closing costs be rolled into the loan? The VA funding fee can be financed into the loan balance, but standard third-party closing costs like the appraisal and title fees generally must be paid in cash or covered by seller concessions.
What is the average closing cost on a $400,000 house in Virginia? At 3% of the loan amount, closing costs on a $400,000 purchase land around $12,000, though the exact figure shifts based on loan program and lender.
Does FHA UFMIP count as a closing cost? Yes, the 1.75% upfront mortgage insurance premium is part of your total closing costs, though it can typically be financed into the loan rather than paid at settlement.
Is PMI included in conventional closing costs? The first month’s PMI premium is often collected at closing as a prepaid item, but ongoing PMI is a monthly payment, not a one-time closing cost.
How soon do I get a Loan Estimate after applying? Federal disclosure rules require lenders to provide a Loan Estimate within three business days of a completed loan application.
Can seller concessions cover all my closing costs in Virginia? Depending on your loan program and down payment, negotiated seller concessions can cover a large share or even all of your standard closing costs, though caps vary by program.
What’s the difference between closing costs and prepaid items? Closing costs pay for originating and processing the loan, while prepaid items fund your escrow account for taxes and insurance in advance.
Can I see estimated closing costs before applying for a mortgage? A NoTouch Credit Pull pre-approval process lets you review estimated closing costs and loan scenarios early using a soft credit pull, without triggering a hard inquiry on your credit report.
Locking In Your Numbers Before You Shop Lenders
Closing costs vary by loan program and by purchase price, which means the only way to know your real number is to run it against your specific scenario, not a generic percentage. A veteran using a VA loan, a first-time buyer going FHA, and a move-up buyer putting 20% down conventionally will all land on different totals for the same house. Connect with Duane today for a personalized consultation and get a written Loan Estimate before you compare offers, so you’re working from real numbers instead of rough percentages. Whether you’re a veteran ready to use your hard-earned benefits or a homebuyer exploring your financing options, your path to homeownership starts with expert guidance you can trust for your Stafford County or Richmond-area purchase.