VA Loans in San Diego: 6 Things People Get Wrong
San Diego is one of the biggest VA loan markets in the country. Between Miramar, Naval Base San Diego, Coronado, and Camp Pendleton up the road, a VA buyer isn't a special case here. They're a big part of the buyer pool.
Even so, the same misunderstandings come up on almost every VA deal I work on, from buyers and sellers both. Here are the six I hear most.
1. "Zero down means I don't need any cash."
Zero down means no down payment. It doesn't mean zero cash to close. You'll still have closing costs, an appraisal, inspections, and usually an earnest money deposit when your offer is accepted.
The good news is that sellers can help. VA lets the seller pay your normal closing costs, plus concessions of up to 4% of the purchase price. On a lot of San Diego deals, that's how buyers get in with very little out of pocket.
2. "There's a cap on how much I can borrow."
Not if you have your full entitlement. Since 2020, there's no VA loan limit for borrowers with full entitlement. You still have to qualify on income and credit, but the VA doesn't cap the loan amount.
The limit only matters if part of your entitlement is still tied up in another VA loan. In that case, the 2026 San Diego County limit is $1,104,000, and borrowing above your remaining entitlement usually means a down payment on the difference. Your lender can run the exact math.
3. "The funding fee makes it too expensive."
The funding fee is a one-time charge, and most buyers roll it into the loan instead of paying it at closing. Here's the current chart for purchase loans:
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to 9.99% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
On a $900,000 loan with nothing down, that's $19,350 the first time you use the benefit and $29,700 after that. Put 5% down and the fee on the remaining $855,000 drops to $12,825.
Two things people miss:
- There's no monthly mortgage insurance on a VA loan. On a conventional loan with less than 20% down, you'd pay PMI every month. Over a few years, the one-time funding fee often comes out cheaper.
- Many veterans don't pay it at all. If you receive VA disability compensation, you're exempt. Surviving spouses receiving DIC and some Purple Heart recipients on active duty are exempt too. It's worth checking your Certificate of Eligibility before assuming you owe it.
4. "I already used my VA loan, so it's gone."
Your entitlement isn't a one-time benefit. When you sell the home and pay off the loan, you can restore your full entitlement and use it again.
You can sometimes have two VA loans at once. If you PCS out of San Diego and keep your house as a rental, you may have enough remaining entitlement to buy at your next duty station with another VA loan. The new home just has to be your primary residence.
5. "VA appraisals kill deals."
This reputation is mostly outdated. A VA appraisal checks two things: the value, and whether the home meets the VA's minimum property requirements. Those requirements come down to safe, sound, and sanitary. The usual flags are things like peeling paint on an older home, a missing handrail, or a roof near the end of its life.
Most of those are small and get fixed before closing. And if the value is coming in low, the VA appraiser has to notify the lender first, which gives your agent a chance to send comparable sales before the appraisal is final.
6. "A VA offer is weaker than a conventional one." (For sellers)
This one costs sellers money. A VA buyer with a solid pre-approval and an experienced lender closes on the same timeline as a conventional buyer, usually 30 to 45 days.
What actually makes an offer weak is the same for every loan type: a thin pre-approval, a lender who doesn't do many of these, or no plan if the appraisal comes in short. Judge the buyer and the lender, not the loan program. In a market with this many VA buyers, ruling them out means ruling out a big piece of your demand.
What to do next
If you're buying: Get your Certificate of Eligibility through VA.gov or your lender, and talk to a lender who closes VA loans every week. Ask whether you're exempt from the funding fee before you budget for it.
If you're selling: When a VA offer comes in, ask your agent about the lender and the pre-approval, and look at the home with the minimum property requirements in mind. Fixing a handrail before you list is cheaper than negotiating it later.
This is general information, not lending advice. Every situation is different, so confirm the details with a VA-approved lender. Funding fee rates are from VA.gov as of November 2026.
