Updated October 2026
You have your Certificate of Eligibility. You have a lender who closes VA loans every month. You've found the house.
Then someone mentions, gently, that the sellers "would prefer conventional."
That moment is real, and we hear about it from buyers relocating for Fort Belvoir, the Pentagon, and the Mark Center more often than we'd like. The good news, in our experience, is that most of the old objections to VA financing rest on assumptions that don't hold up once you look at how VA actually works. A VA offer that's built well can sit on a seller's table next to a conventional one and hold its own.
If you're earlier in the process, our first-time buyer guide to Alexandria covers the VA basics: no down payment, no monthly mortgage insurance, the funding fee, and getting your COE. This post picks up where that one leaves off. It's about the offer itself.
Do sellers accept VA loans?
Yes. A VA loan is a mortgage like any other, and sellers in Alexandria and across Northern Virginia accept VA offers regularly.
What sellers react to is uncertainty. In our experience, a listing agent's hesitation usually comes down to three questions: Will the appraisal hold? Will it close on time? Is the buyer going to ask for a pile of money at settlement? Answer those three in the offer itself and the "prefers conventional" conversation tends to go quiet.
VA has addressed each one directly. Its own Quick Reference for Real Estate Professionals, published by VA's Loan Guaranty Service, says VA loans close on timelines competitive with conventional loans, that VA appraisal timelines are comparable to other loan types, and that most initial VA purchase appraisals come in at or above the contract price. The same guide describes Veteran borrowers as "some of the strongest borrowers in the market." None of that guarantees anything about one house or one buyer, but it's VA's own answer, and your agent can put it in front of a listing agent.
How VA seller concessions work
This is the part of a VA offer that most often gets misunderstood, on both sides of the table.
VA's funding fee and closing costs page puts it plainly: "We don't limit credits for a loan's closing costs, but we do limit seller's concessions to no more than 4% of your home's reasonable value."
Two things are packed into that sentence.
Closing costs and concessions are different buckets
A seller can pay your normal closing costs (things like the lender's fees, title, and recording charges), and VA doesn't cap that. Concessions are the extras on top. VA lists seller-paid funding fees and prepaid buyer hazard insurance as examples of concessions. Your lender will itemize exactly which line lands in which bucket on your loan.
The cap runs off reasonable value, not price
"Reasonable value" is the value VA's appraiser establishes. If you agree to pay more than the appraised value, the 4% ceiling is still measured against the appraisal.
What the funding fee does to the math
The funding fee is where concessions and strategy meet. VA's page says that on a purchase loan, "you can finance only the VA funding fee into the loan amount. You must pay all other fees and charges when your loan closes." So the funding fee can ride in the loan, and everything else is cash or credit at settlement.
Here's the funding fee table for a purchase loan, per VA. The fee is calculated as a percentage of the loan amount, not the home's purchase price. Use the highest down-payment tier you qualify for: at 10% or more down, the 1.25% fee takes precedence over the 5%-or-more tier.
Use | Down payment | Funding fee |
|---|---|---|
First use | Less than 5% | 2.15% |
First use | 5% or more | 1.5% |
First use | 10% or more | 1.25% |
After first use | Less than 5% | 3.3% |
After first use | 5% or more | 1.5% |
After first use | 10% or more | 1.25% |
Veterans receiving VA disability compensation are exempt from the fee, along with certain other borrowers VA lists on the same page. If you're exempt, that's one less thing to negotiate. If you're not, asking the seller to pay the fee counts toward the 4%.
Our read: in a competitive situation, the strongest VA offers ask for less. Financing the funding fee and keeping the seller credit to normal closing costs often reads cleaner to a listing agent than a big concession request, even though both are allowed. That's a judgment call we make with each buyer and their lender, house by house.
The appraisal: escape clause, Tidewater, and your options
Every VA purchase contract carries VA's required escape clause, set out in federal regulation at 38 CFR 36.4303(k). In the regulation's words, the buyer "shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase" if the price exceeds the reasonable value VA establishes. The same clause gives the buyer "the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value."
Read the second half twice. It means a VA buyer who can cover an appraisal gap in cash can still close, exactly like a conventional buyer. The clause protects your deposit. It doesn't force you to walk away.
Before value is ever final, VA builds in a step conventional appraisals don't have. VA's quick reference explains that if the appraiser thinks the value may fall short, "they will invoke the Tidewater Initiative by contacting the point of contact in the appraisal order so that the point of contact can provide additional sales data." That window is where a prepared agent earns their keep. We keep comparable sales ready before the appraiser ever shows up, so if the Tidewater call comes, the answer is fast and specific.
If value still comes in low, the options are a reconsideration of value through the lender, renegotiating with the seller, or paying the difference at closing.
One more appraisal note. VA's quick reference is clear that "a VA home loan appraisal does not serve as an inspection." VA recommends an inspection, and in our experience it's worth keeping in the offer even when you're competing.
Who pays the buyer's agent on a VA loan
This question comes up on nearly every VA offer we write.
VA Circular 26-24-14, "Temporary Local Variance for Certain Buyer-Broker Charges" (dated June 11, 2024, effective August 10, 2024), says: "As a reminder, VA does not treat the seller's payment of buyer-broker charges as a seller concession." So if a seller agrees to pay your agent, that money doesn't eat into the 4% concession limit. The same circular also allows Veterans to pay reasonable and customary buyer-broker charges themselves where that compensation can't be set by or flow through the listing broker, though those charges can't be included in the loan amount. VA's circulars index still lists 26-24-14, as amended by Change 1 on August 5, 2024, as valid until rescinded. We'll walk through what your buyer agreement says before you write anything.
Loan limits and your entitlement
With full entitlement, VA doesn't set a loan limit. VA's quick reference puts it this way: "if the buyer has full entitlement there is no loan amount limit (as long as the loan amount does not exceed the appraised value)." You still have to qualify with your lender.
If you've used part of your entitlement and still have a VA loan open, county loan limits come back into play. For 2026, the Federal Housing Finance Agency set the one-unit baseline conforming loan limit at $832,750 and the high-cost ceiling at $1,249,125. Your lender will confirm the exact figure for the county or city you're buying in, and how much of a down payment, if any, your remaining entitlement requires.
What the 22307 ZIP code looked like in August 2026
Pace matters for a VA offer, because a fast market leaves less room for long contingency windows. Here's a look at one close-in Fairfax County ZIP our buyers watch.
In the 22307 ZIP code, which includes Belle Haven and New Alexandria, homes sold at a median of 17 days on market in August 2026, compared with 27 days in August 2025, according to an analysis of Bright MLS closed-sale data. There were 10 closed sales in August 2026, against 17 a year earlier. The August 2026 median sale price was $1,187,500.
Those are small counts. One or two large houses can swing a month's median price in a ZIP this size, so read the price as a snapshot of what sold that month, not a trend. The shorter median days on market is the more useful signal for an offer: homes that closed in August 2026 had spent less time on market than those that closed a year earlier.
On concessions, remember that the 4% cap is a ceiling, not a target, and it's measured against VA's reasonable value, not the price on your contract.
Figures are our analysis of individual Bright MLS closed-sale records for ZIP 22307 in Fairfax County, all residential property types, and may differ from published reports for the same area. The 22307 ZIP code sits outside the City of Alexandria, and a ZIP code isn't the same as any one neighborhood. If this part of Fairfax County is on your list, our Fort Hunt and Mount Vernon guide covers the neighboring areas.
How to make a VA offer compete
Here's how we build VA offers when we expect competition. Every house is different, so treat this as a starting list, not a formula.
- Lead with a full approval, not a prequalification. Have your COE and a VA-experienced lender's approval letter attached. Ask the lender to be reachable by the listing agent.
- Keep the seller ask simple. Ask for closing costs, not extras. Finance the funding fee if you aren't exempt, so it doesn't count toward the 4%.
- Say what you'll do about the appraisal. If you can cover a gap, say so in the offer and name a number you're comfortable with. The escape clause still protects your deposit if value comes in far below that.
- Prepare for Tidewater. Your agent should have comps ready the day the appraisal is ordered, and the listing agent should know that.
- Pick a settlement date the lender can hit. A realistic date beats an aggressive one that slips.
- Keep the inspection, and keep it tight. A short inspection window shows confidence without giving up protection.
- Check condo approval early. VA's quick reference lists a condominium as eligible but notes it "requires pre-approval or a waiver." If you're looking at condos, our post on Alexandria condo fees and resale packets covers what to request alongside it.
If the move is tied to orders, timing usually drives everything else. Our guide to federal and military relocation in Northern Virginia covers the sequence, and our look at Alexandria neighborhoods by commute helps match an address to a duty station.
Working with us
Elizabeth Lucchesi and The LizLuke Team at LONG & FOSTER REAL ESTATE INC have spent more than twenty years helping buyers and sellers across Alexandria and Northern Virginia, including military and relocating families. Elizabeth holds the CRS and SRES designations and is licensed in Virginia and Washington, D.C. Most of our business comes from referrals and repeat clients. You can meet the team here.
If you're weighing a VA offer on a house you love, we'd be glad to talk it through before you write it.
This is general information and is not legal or tax advice.
The LizLuke Team at LONG & FOSTER REAL ESTATE INC. 110 N Royal St, Ste 300,
Alexandria, VA 22314. Office 703.683.0400. The LizLuke Team (703) 868-5676. Virginia License #0225069250.
Equal Housing Opportunity.
All information is deemed reliable but not guaranteed.
Sources
- U.S. Department of Veterans Affairs, "VA funding fee and closing costs" (seller concession limit, funding fee table, financing rule, exemptions), accessed October 2026.
- U.S. Department of Veterans Affairs, Loan Guaranty Service, "Quick Reference for Real Estate Professionals" (closing and appraisal timelines, borrower profile, Tidewater Initiative, appraisal is not an inspection, full-entitlement loan limit, condominium approval), accessed October 2026.
- Electronic Code of Federal Regulations, 38 CFR 36.4303(k) (required escape clause wording), accessed October 2026.
- U.S. Department of Veterans Affairs, Circular 26-24-14, "Temporary Local Variance for Certain Buyer-Broker Charges", June 11, 2024, effective August 10, 2024, amended by Change 1, August 5, 2024 (seller-paid and Veteran-paid buyer-broker charges). Status per VA's Loan Guaranty circulars index: valid until rescinded, checked October 2026.
- Federal Housing Finance Agency, "FHFA Announces Conforming Loan Limit Values for 2026".
- Bright MLS closed-sale data, Alexandria 22307, August 2025 and August 2026, pulled September 27, 2026
