Costs
VA closing costs in Chicago: who pays what
Short answer
On a Chicago VA purchase you pay lender and title charges, an Illinois real estate attorney, prepaid taxes and insurance, and the buyer's 0.75% share of the City of Chicago transfer tax. VA lets the seller pay any of your closing costs, and caps seller concessions (extras such as paying your funding fee or debts) at 4% of the home's reasonable value. Only the funding fee can be rolled into a purchase loan.
What you and the seller can negotiate
VA lists these as costs the buyer and seller can split however they agree:
- Real estate agent commission and fees
- Loan origination fee
- Discount points and temporary buydowns
- Credit report
- VA appraisal fee
- Hazard insurance and property taxes
- State and local taxes
- Title insurance
- Recording fee
The 4% rule, explained
There are two kinds of seller help, and VA treats them differently.
| Type | Examples | VA limit |
|---|---|---|
| Normal closing-cost credits | Lender fees, title, recording, appraisal, attorney | No limit |
| Seller concessions | Paying your VA funding fee, paying off your debts, prepaying hazard insurance | 4% of reasonable value on the VA Notice of Value |
Lender fees
VA lenders can charge a flat fee of up to 1% of the loan amount for their costs, plus specific itemized charges VA allows, such as the appraisal and credit report. Discount points to buy down the rate are separate and negotiable. Compare Loan Estimates from at least two lenders on the same day.
Chicago-specific costs
- City of Chicago transfer tax, buyer share: $3.75 per $500 of price, or 0.75%. On a $350,000 home that is $2,625.
- Real estate attorney: Illinois buyers almost always hire one. Attorney review runs five business days after your offer is accepted under the Multi-Board Residential Real Estate Contract 8.0.
- Property tax proration: Cook County bills taxes a year behind, so the seller usually credits you for taxes owed for the time they owned the home.
- Buyer’s agent: Since the VA Home Loan Program Reform Act was signed on July 30, 2025, veterans can pay their own buyer’s agent directly. Most still ask the seller to cover it. What changed.
What you cannot finance
On a VA purchase or construction loan, the funding fee is the only closing cost you can add to the loan. Everything else is paid at closing, by you or by the seller. On an IRRRL, closing costs can be rolled into the new loan.
Common questions
Can the seller pay all my closing costs on a VA loan?
Yes. VA does not limit seller credits for normal closing costs. Only concessions, such as paying your funding fee or debts, are capped at 4% of the home's reasonable value.
How much are VA closing costs in Chicago?
They vary by lender and price. Common items are the lender's charges (flat fee capped at 1%), title and recording, an attorney fee, prepaid taxes and insurance, and the 0.75% Chicago transfer tax.
Can I roll VA closing costs into the loan?
On a purchase, only the funding fee. On an IRRRL refinance, closing costs can be included in the new loan.
Sources
- VA funding fee and loan closing costs, VA.gov (updated Sept. 22, 2026)
- Chicago transfer tax for buyers, Chicago First-Time Home Buyer
- Attorney review in Illinois, Chicago First-Time Home Buyer
- VA Home Loan Reform Act becomes law, National Association of Realtors
- Interest rate reduction refinance loan (IRRRL), VA.gov
What will your VA funding fee be?
Enter a price and down payment to see the 2026 fee, or check whether you are exempt.
An independent guide. Not affiliated with or endorsed by the U.S. Department of Veterans Affairs, and not a lender. General information, not legal, tax or financial advice.