VA Allowable Fees in Texas: What Veterans Can Be Charged in 2026

VA loans limit what an eligible Veteran, service member, or qualifying surviving spouse can be required to pay at closing, but the rules are more nuanced than a simple list of ‘allowed’ and ‘prohibited’ fees. A Veteran may generally pay certain reasonable and customary third-party charges, plus a lender flat origination charge of up to 1% of the loan amount, while other lender-overhead costs are restricted or must fit inside that 1% structure. 

Texas also has VA-approved state fee deviations in 2026 that make some charges allowable here even though they would normally be treated differently under the national rule. This guide explains each major fee category, what to verify on the Loan Estimate and Closing Disclosure, and how seller credits, the VA funding fee, buyer-broker compensation, and Texas-specific exceptions affect your actual cash to close.

Quick Answer: What Fees Can a VA Borrower Pay in Texas? 

Texas VA borrowers may generally pay the VA appraisal, credit report, title examination and title insurance, recording charges, survey, flood determination, prepaid taxes and insurance, reasonable discount points, and other VA-authorized itemized costs. The lender may also charge a flat origination fee of up to 1%. If the lender charges less than 1%, certain otherwise-unallowable lender costs can be charged only to the extent that the origination fee plus those costs does not exceed the 1% limit. Texas also has approved local deviations, and the VA funding fee is a separate federal charge that can be financed when allowed.

What Are VA Allowable Fees?

VA allowable fees are loan-related or transaction-related charges that the Veteran may legally be required to pay under VA regulations, the VA Lender’s Handbook, current VA circulars, and any approved state or local deviations. The fact that a charge is allowable means it may be passed to the borrower when properly structured; it does not mean every lender must charge it.

This distinction matters because a Veteran may see two very different types of costs on the same Closing Disclosure. A VA appraisal pays an independent property-valuation service, while a lender processing fee is part of the lender’s ordinary origination overhead. VA treats those categories differently.

For borrowers who are still learning the basics, VA Loan Facts can provide additional background on how VA financing works.

How the VA 1% Origination Rule Works in 2026

The lender may charge a flat origination fee of up to 1% of the applicable loan amount. That flat fee is designed to cover lender services and costs that VA does not allow to be itemized separately to the Veteran.

The rule is often oversimplified online. A Veteran is not limited to total closing costs of 1%. Instead, the 1% limit applies to the lender’s flat origination charge and, when the lender charges less than the full 1%, certain otherwise-unallowable fees that may fill the unused portion of that limit.

If the Lender Charges the Full 1%

When the lender charges the full 1% flat origination fee, ordinary lender-overhead items that VA treats as unallowable itemized charges generally cannot also be charged separately to the Veteran. The lender must pay those costs from its own flat charge or another party must pay them.

If the Lender Charges Less Than 1%

VA policy allows more flexibility when the lender charges less than 1%. The lender may charge otherwise-unallowable items up to the unused portion of the 1% cap, but the aggregate of the origination fee plus those unallowable costs cannot exceed 1%.

Simple Example: On a $400,000 loan, a 1% maximum equals $4,000. If the lender charges a 0.75% origination fee, or $3,000, up to $1,000 of otherwise unallowable lender costs could potentially fit within the remaining 0.25%, subject to VA rules and the exact fee structure. If the lender already charges the full $4,000, those same ordinary overhead costs generally cannot be added on top.

Common VA Allowable Fees in Texas

Texas borrowers can see a mix of federal VA charges, third-party settlement services, public-record costs, prepaid items, and state-specific fees. The sections below explain the most common categories before the summary table.

VA Appraisal Fee

The Veteran may generally pay the VA appraisal fee. The amount is tied to the VA appraisal fee schedule for the applicable Texas county and property type, and the 2026 schedule became effective May 1, 2026. Appraisal cost is separate from the lender’s 1% origination fee.

Compliance or Repair Inspection

When a VA appraisal requires repairs or completion verification, a permitted compliance inspection charge may apply. The fee should relate to an actual inspection service rather than a lender’s internal overhead.

Credit Report Fee

A reasonable credit-report charge is an allowable itemized fee. The amount should reflect the actual credit-report service rather than a second underwriting or processing charge disguised under another label.

Title Examination and Title Insurance

Veterans may generally pay reasonable title examination and title insurance costs. In Texas, title-related charges can also be affected by state practice and VA-approved deviations, so the title company should explain each premium, endorsement, guaranty, or search charge separately.

Recording Fees

Government recording charges for deeds, deeds of trust, releases, and other required documents are allowable. The borrower should be able to see which documents are being recorded and which public office receives the money.

Survey Fee

A reasonable property survey fee can be an allowable itemized charge when the service is required or used in the transaction. The survey should be a real third-party service rather than a lender administrative fee.

Flood Determination and Required Flood Insurance

A flood-zone determination is an allowable service. If the property is in a designated flood zone and flood insurance is required, the borrower may also have insurance-related costs that are separate from the lender’s origination fee.

Hazard / Homeowners Insurance

The first-year homeowners insurance premium and required prepaid insurance amounts are ordinary closing items a Veteran can pay. These are not lender compensation and may materially affect Texas cash-to-close estimates.

Prepaid Property Taxes and Assessments

Taxes, assessments, and similar prepaid items may be collected at closing. Texas property taxes can make this category significant even when the VA loan has no required down payment.

Discount Points

A Veteran may pay reasonable discount points to obtain a lower interest rate. Discount points are separate from the lender’s 1% origination fee, but borrowers should compare the upfront cost with the expected monthly savings and how long they plan to keep the loan.

MERS Fee

VA’s 2026 state-deviation list permits a MERS registration fee up to the applicable transaction amount. As of February 17, 2026, the listed amount is up to $24.95 unless the lender has negotiated a lower per-transaction fee.

Wood-Destroying Insect / Pest Inspection When Required

Current VA deviation guidance allows Veterans to pay a wood-destroying insect inspection fee when the Notice of Value requires it. This is an important update because older VA fee summaries often still say a Veteran can never pay a termite or pest inspection fee.

VA Allowable Fees at a Glance

The detailed explanations above show why the same Closing Disclosure can contain several different cost types. The table below is a final review tool, not a substitute for the lender’s actual fee worksheet or title-company statement.

For third-party itemized charges, the borrower should focus on the real provider and actual service. VA’s 2026 invoice guidance requires lenders to maintain supporting documentation for itemized fees and provide it to VA upon request or during oversight activity.

The table is intentionally limited to the major recurring charges. A Texas closing can include additional legitimate fees depending on the property, contract, refinance type, title requirements, state programs, and approved VA deviations.

Texas-Specific VA Fee Deviations for 2026

VA can approve local deviations for fees that are normally unallowable or treated differently under the national rule. The Texas entries in VA’s February 17, 2026 State Fees and Charges Deviations List are especially important because they prevent borrowers from applying an outdated national checklist too literally.

• Document preparation fee paid to an attorney. Texas currently has a VA-approved deviation for a document-preparation fee paid to an attorney. This is why a blanket statement that all document-preparation charges are prohibited is inaccurate in Texas.
• Texas Veterans Housing Assistance Program participation fee. For qualifying VHAP transactions, the deviation list permits a participation fee equal to 1% of the loan amount.
• Housing Quality Standards fee on VHAP loans. The Texas deviation list permits a $75 Housing Quality Standards fee for applicable VHAP loans.
• Texas Guaranty Assessment Recoupment Charge. The current state list permits a $4.50 charge.
• Escrow fee on refinance loans. Texas has an approved deviation for an escrow fee on refinance transactions.
• Title Policy Guaranty Fee. This Texas title-related charge appears on the current VA deviations list.
• Tax certificates. Texas permits tax-certificate charges under the VA state deviation.
• Elevation certificate for flood insurance. An elevation-certificate fee can be charged when applicable.
• Tax deletion fee. The current Texas VA deviation list includes this fee.

These are not automatic charges on every Texas VA loan. They are approved exceptions that may apply when the underlying service or transaction requires them. Ask the lender or title company which specific deviation supports a fee that would otherwise appear non-allowable.

Fees Veterans Generally Cannot Be Charged Separately

When the lender is using the full 1% flat origination charge, VA generally does not allow separate borrower charges for ordinary lender overhead. Some of these items may be paid by the lender, seller, or another party, and some Texas-approved deviations can override the national treatment in specific situations.

• Loan application or processing fees. These are ordinary origination overhead when they are not fitting within unused room under the 1% structure.
• Document preparation and preparation of loan papers. Generally treated as lender overhead nationally, although Texas has a specific 2026 deviation for a document-preparation fee paid to an attorney.
• Loan closing or settlement fee. The lender’s own closing or settlement overhead generally cannot be added as a separate Veteran charge when covered by the 1% rule.
• Lender’s own appraisal or internal inspection fee. This is different from the VA fee-panel appraisal or an authorized compliance inspection.
• Notary fees. Generally treated as lender overhead under the national rule unless a current approved deviation changes the treatment.
• Tax service fee. A lender’s tax-service fee is generally an unallowable itemized charge under the standard rule.
• Rate-lock fee. An interest-rate lock-in fee is listed among lender costs that are not normally charged separately to the Veteran.
• Postage, mailing, stationery, telephone, photographs, and similar overhead. These are normal costs of doing business rather than separate Veteran charges.
• Trustee, commitment, or secondary-market marketing fees. These are generally not separate allowable Veteran itemized charges.
• Broker, finder, or similar loan-broker fees. Ordinary mortgage-broker/finder charges are generally treated as unallowable borrower fees under the VA lender-fee structure.

The safest interpretation is not to look for a fee label alone. Ask whether the fee is an allowed third-party service, part of the 1% lender charge, using remaining room below 1%, or authorized under a current Texas deviation.

2026 VA Invoice and Documentation Rules for Itemized Fees

VA strengthened and clarified the documentation framework for itemized charges. Under Circular 26-24-19 Change 1, effective June 4, 2026, lenders must maintain invoices or supporting documentation from service providers in the loan file and provide them to VA when requested or during VA Monitoring Unit oversight.

For a Veteran, the practical benefit is transparency. If a third-party appraisal, survey, title, inspection, or other itemized fee seems unusually high or duplicated, ask who performed the service and what invoice supports the amount.

Can Veterans Pay Buyer-Broker Fees in Texas in 2026?

Yes, under VA’s temporary local variance that remains valid until rescinded. VA currently allows a Veteran to pay reasonable and customary buyer-broker charges when the transaction meets the conditions in Circular 26-24-14.

The buyer-broker charge cannot be financed into the VA loan amount, and the lender must consider the Veteran’s liquid assets needed to pay it. The amount must be recorded in Section H, ‘Other,’ on the Closing Disclosure. A seller can still pay the buyer-broker charge, and VA does not treat the seller’s payment of that charge as a seller concession.

Because buyer-agent compensation practices can change with contracts and local market conditions, the Veteran should read the buyer representation agreement before making an offer and confirm how the charge will appear in the final cash-to-close calculation.

For the broader cash-to-close picture, see VA Loan Purchase Options.

The VA Funding Fee Is Separate From Allowable Closing Costs

The VA funding fee is a federal program fee, not lender compensation and not part of the lender’s 1% origination rule. It applies to many VA purchase, construction, refinance, and assumption transactions unless the borrower qualifies for an exemption.

For purchase and construction loans, current rates effective in 2026 are based on down payment and whether the borrower is using the VA home loan benefit for the first time or again.

• First use, less than 5% down. 2.15% of the loan amount.
• Subsequent use, less than 5% down. 3.30% of the loan amount.
• 5% or more down. 1.50% for first or subsequent use.
• 10% or more down. 1.25% for first or subsequent use.
• IRRRL. 0.50% of the applicable loan amount.
• VA loan assumption. 0.50% of the applicable assumed balance unless an exemption applies.

The funding fee can generally be paid in cash or financed into the VA loan when the program permits. A borrower who qualifies for an exemption should confirm that the exemption is correctly reflected before closing.

For exact 2026 rates and exemption rules, review the Texas VA Mortgage funding fee guide and funding fee exemption guide.

Who Is Exempt From the VA Funding Fee?

Common federal exemption categories include Veterans receiving VA compensation for a service-connected disability, Veterans who would receive that compensation but are receiving retirement or active-duty pay instead, certain surviving spouses receiving Dependency and Indemnity Compensation, qualifying pre-discharge disability cases, and active-duty service members who provide evidence of a Purple Heart.

Do not assume an exemption solely from general Veteran status or a Texas benefit. The lender should verify the borrower’s VA funding-fee status through the applicable VA records before final figures are issued.

Can Seller Credits Pay VA Closing Costs?

Yes. VA allows sellers or builders to provide credits for some or all of the buyer’s ordinary closing costs. Those ordinary closing-cost credits are not subject to the same 4% cap that applies to true seller concessions.

Seller concessions are separate benefits of value provided to the buyer, such as paying the VA funding fee, paying certain debts, or prepaying the buyer’s hazard insurance. Those concessions are limited to 4% of the home’s reasonable value.

• Ordinary closing-cost credit. Can cover eligible loan closing costs and is not automatically counted against the 4% seller-concession cap.
• VA funding fee paid by seller. This is treated as a seller concession and counts toward the 4% limit.
• Buyer-broker fee paid by seller. Under the current temporary VA variance, the seller’s payment of the buyer-broker charge is not treated as a seller concession.
• Contract matters. The purchase agreement should clearly state the seller credit or payment arrangement so the lender and settlement provider can disclose it correctly.

This distinction can materially change a Texas buyer’s cash to close. Ask the lender to show which seller-paid amounts are ordinary closing-cost credits and which are true concessions.

Can VA Closing Costs Be Financed Into the Loan?

On a standard VA purchase or construction-to-permanent loan, ordinary closing costs generally cannot simply be added to the base loan amount. VA’s current consumer guidance states that the VA funding fee is the closing charge that may be financed on these transactions.

Other costs can still be reduced through seller credits, lender credits, negotiated contract terms, or the borrower’s own funds. That is why zero down does not necessarily mean zero cash to close.

For the broader cash-to-close picture, see VA Loan Down Payment in Texas: 0% Down Rules.

How to Review Your Loan Estimate and Closing Disclosure

Do not wait until the signing table to review VA fees. The Loan Estimate gives you an early view of lender and third-party charges, and the Closing Disclosure shows the final transaction. A line-by-line review is easier when you sort each charge by category.

• Step 1: Mark lender charges. Identify the origination fee and any application, underwriting, processing, document, tax-service, lock, or administrative line.
• Step 2: Separate third-party services. Appraisal, credit report, title, survey, flood, inspection, and insurance should have identifiable providers or purposes.
• Step 3: Check the 1% math. If the lender origination fee is below 1%, ask which otherwise-unallowable charges are using the remaining space. If the full 1% is charged, ask why any ordinary lender-overhead fee appears separately.
• Step 4: Check Texas deviations. For a fee that would normally be prohibited, ask whether the lender is relying on a current Texas VA-approved deviation.
• Step 5: Verify actual third-party amounts. Ask whether an invoice or supporting document exists and whether the amount equals the service provider’s charge.
• Step 6: Separate the funding fee. Confirm the correct percentage, exemption status, and whether it is being financed or paid at closing.
• Step 7: Review seller credits and concessions. Make sure the contract credit, buyer-broker arrangement, and any seller-paid funding fee are disclosed in the correct category.
• Step 8: Compare the final disclosure with the estimate. Ask about new charges, higher amounts, duplicated services, or fees whose description changed.

A good fee review should end with one sentence for every line item: what the charge is, who gets paid, why it is allowable, and whether someone other than the Veteran is covering it.

Common VA Fee Mistakes to Avoid in Texas

Most fee problems come from applying an old national checklist to a modern Texas closing or from assuming the 1% rule controls every cost. The current rules require more precise classification.

• Assuming all closing costs are capped at 1%. The 1% rule applies to the lender flat charge and otherwise unallowable lender costs, not every appraisal, title, insurance, tax, or recording charge.
• Assuming a full 1% origination fee allows separate processing and document fees. Those ordinary overhead items generally cannot be added separately unless a specific approved exception applies.
• Ignoring the under-1% rule. When the origination fee is below 1%, the unused portion can affect how certain otherwise-unallowable costs are treated.
• Using an outdated Texas fee list. VA updated the State Fees and Charges Deviations List in February 2026.
• Assuming Veterans can never pay pest inspection fees. Current VA variance guidance allows Veteran-paid wood-destroying insect inspection fees when required by the Notice of Value.
• Assuming document-preparation fees are always prohibited in Texas. The 2026 Texas deviations list specifically permits a document-preparation fee paid to an attorney.
• Confusing seller closing-cost credits with the 4% concession cap. Ordinary closing-cost credits are treated differently from true seller concessions.
• Treating the VA funding fee as lender income. It is a separate federal VA charge and follows its own exemption and financing rules.
• Assuming every buyer-broker fee is prohibited. The current temporary VA variance allows qualifying Veteran-paid buyer-broker charges under specified conditions.
• Waiting until closing day to ask questions. Fee corrections are easier when raised from the Loan Estimate rather than after final documents are signed.

The goal is not to eliminate every charge. It is to make sure each amount is permitted, correctly categorized, properly supported, and paid by the right party.

Final Verdict: What Can a Texas Veteran Be Charged on a VA Loan?

A Texas Veteran can be required to pay many legitimate closing costs, but VA rules sharply limit how lender overhead can be passed through. The key is to separate the lender’s 1% origination structure from allowable third-party services, Texas-approved deviations, the VA funding fee, prepaid items, government charges, and negotiated seller-paid costs.

The biggest 2026 mistakes are using an outdated national fee list, treating the 1% rule as a total-closing-cost cap, ignoring the under-1% origination exception, or missing Texas deviations for document preparation, pest inspections, title and tax charges, and other approved items. Review the Loan Estimate early, compare it with the Closing Disclosure, and ask for written support for any line that does not clearly fit one of these categories.

Want Your Texas VA Closing Costs Reviewed Before You Sign? Texas VA Mortgage can review your VA loan structure, funding-fee status, seller credits, and estimated cash to close so you understand what each charge covers before closing. Start your VA loan application or call (888) 295-4055. 

Frequently Asked Questions

What are VA allowable fees in Texas?

They are loan-related or transaction-related charges a Veteran may legally be required to pay under VA rules and approved Texas deviations, including certain appraisal, credit, title, recording, survey, insurance, tax, and other authorized costs.

Does the VA 1% rule mean my total closing costs cannot exceed 1%?

No. The 1% rule applies to the lender’s flat origination charge and certain otherwise-unallowable lender costs. Third-party items such as appraisal, title, taxes, insurance, survey, and recording are separate.

Can a lender charge less than 1% origination and still charge other fees?

Yes, in limited circumstances. VA policy allows otherwise-unallowable fees to use the unused portion of the 1% cap, but the combined origination fee and those charges cannot exceed 1%.

Can a Texas Veteran be charged a processing fee?

A separate processing fee is generally ordinary lender overhead. If the lender charges the full 1% origination fee, it normally cannot be added separately. If the origination fee is below 1%, the exact structure should be reviewed under the VA aggregate 1% rule.

Can a Veteran pay a document preparation fee in Texas?

Texas has a current VA-approved state deviation for a document-preparation fee paid to an attorney. The borrower should confirm that the fee fits that deviation and is disclosed correctly.

Can a Veteran pay for a termite or pest inspection in Texas?

Yes when a wood-destroying insect inspection is required by the VA Notice of Value. Current VA deviation guidance permits the Veteran to pay that inspection fee.

Can a Veteran pay buyer-agent commission in Texas?

Potentially yes. VA’s temporary local variance allows reasonable and customary Veteran-paid buyer-broker charges when the transaction meets the Circular 26-24-14 conditions. The charge cannot be financed into the VA loan.

What is the VA funding fee in 2026?

For a purchase with less than 5% down, the current rate is 2.15% for first use and 3.3% for subsequent use. A 5% or greater down payment reduces the rate to 1.5%, and 10% or more reduces it to 1.25%. Exempt borrowers pay no funding fee.

Can the VA funding fee be financed?

Yes, the funding fee can generally be included in the VA loan when program rules permit. On a standard purchase, ordinary closing costs generally cannot be financed into the base loan in the same way.

Can the seller pay my VA closing costs?

Yes. Sellers or builders can provide credits for ordinary closing costs. Ordinary closing-cost credits are not subject to the 4% seller-concession limit, while true concessions are capped at 4% of reasonable value.

Are appraisal and title fees included in the 1% rule?

No. Reasonable VA appraisal, title examination, title insurance, recording, and other authorized third-party costs are itemized fees separate from the lender’s 1% origination structure.

What should I do if a fee looks wrong?

Ask the lender or settlement provider to identify the service, recipient, VA rule or Texas deviation supporting the charge, and the actual third-party invoice when applicable. Request a corrected disclosure before signing if the fee is not properly supported.