VA Loan Plus DPA: Double Benefits for Arizona Veterans

As a veteran, you've already earned one of the best mortgage benefits available: the VA loan. Zero down payment, no PMI, competitive rates. But here's something many veterans don't realize. You can stack another benefit on top of it. Arizona's down payment assistance programs work with VA loans, and that assistance goes directly toward closing costs.

Let's look at how to maximize your benefits as a veteran buying in Tucson.

The VA Loan Advantage

First, let's recap what makes VA loans exceptional:

Zero down payment required. Unlike FHA (3.5%) or conventional loans (3-20%), VA loans require nothing down.

No private mortgage insurance (PMI). Most other low-down-payment loans add a monthly mortgage insurance charge; VA loans don't.

Competitive pricing. VA loans are made by private lenders, so put a VA quote next to a conventional one on a Loan Estimate to see which costs you less.

Flexible credit requirements. While lenders set minimums (usually 620+), VA guidelines are more forgiving of credit imperfections.

No prepayment penalties. Pay off early without fees.

Assumable loans. Future buyers can assume your VA loan,a valuable feature in rising rate environments.

Where DPA Comes In

With no down payment required, you might wonder: what's the point of DPA for VA buyers?

The answer: closing costs.

Even with zero down, you'll have closing costs when buying a home. These typically run 2-5% of the purchase price and include:

• VA funding fee (can be financed, but costs more long-term)
• Title insurance
• Escrow fees
• Lender fees
• Prepaid taxes and insurance
• Home inspection

Arizona DPA can cover some or all of these costs.

How VA + DPA Works Together

Here's the powerful combination:

Home Plus Arizona provides up to 4% of your loan amount in assistance. For VA borrowers, since you're not using it for a down payment, it all goes toward closing costs.

How the order of use works:

• VA requires no down payment, so none of the assistance is needed there
• Home Plus funds (up to 4% of the loan amount) go toward closing costs first
• Anything left can be applied to prepaid items or part of the VA funding fee, within program rules

Depending on your closing costs, that can shrink the cash you bring to closing to a small amount beyond earnest money and the inspection.

Eligibility Requirements

To use VA + DPA, you need to meet requirements for both:

VA Loan Eligibility

• 90+ days active duty during wartime OR
• 181+ days active duty during peacetime OR
• 6+ years in National Guard/Reserves OR
• Surviving spouse of veteran who died in service or from service-connected disability
• Certificate of Eligibility (COE) from the VA

Home Plus Arizona DPA Eligibility

• A credit score at or above the program's floor (lenders can require more)
• Income within Home Plus's statewide cap for the borrowers on the loan
• Purchasing a primary residence
• Completion of homebuyer education (required)

Note: Home Plus is open to all buyers, not just first-time purchasers,so repeat-buyer veterans can use this combination too.

The VA Funding Fee Question

VA loans include a funding fee that varies based on:

• First-time vs. subsequent use
• Down payment amount (if any)
• Reserve/Guard vs. regular military

For a first-time user with zero down, the funding fee is currently 2.15% of the loan amount, so it grows with the size of your loan.

Your options:

1. Finance it into the loan. This is most common,you pay no upfront cost, but your loan balance (and payments) are slightly higher.
2. Pay it at closing. If you have cash available, this keeps your loan balance lower.
3. Use DPA to cover it. If your DPA exceeds other closing costs, the remainder can cover part of the funding fee.

Important exception: If you have a service-connected disability rating of 10% or more, you're exempt from the VA funding fee entirely. This makes the VA + DPA combination even more powerful.

Hypothetical Scenario: A Tucson Veteran's Purchase

This is an illustration of how the pieces fit, not a real client:

Buyer: Army veteran, first-time home buyer, credit score in the 670s, borrower income inside the Home Plus limit

Property: a single-family home in Rita Ranch

First mortgage: a VA loan with no down payment

Assistance: Home Plus at up to 4% of the loan amount

Where the assistance goes:

• Lender, title, and escrow charges
• The VA funding fee, if it isn't rolled into the loan. For a nonexempt first-use purchase with less than 5% down, the funding fee is 2.15%. It may be financed, in which case it remains part of the debt. Exempt borrowers do not owe the fee.
• Prepaid taxes and insurance if funds remain

What the veteran still brings: earnest money (credited toward the purchase at closing), the inspection, and any costs the assistance doesn't reach

The monthly side: no PMI, but the payment still includes principal, interest, property taxes, and insurance. The Loan Estimate shows the total.

In a case like this, the veteran keeps most of their savings for moving and emergencies.

Step-by-Step: Getting Started

Here's your path to combining VA and DPA:

Step 1: Obtain your Certificate of Eligibility (COE) You can request this through the VA, or we can often retrieve it for you electronically.

Step 2: Check your DPA eligibility Take our qualifier quiz to verify you meet Home Plus requirements.

Step 3: Get pre-approved We'll issue a pre-approval letter for your VA loan and confirm whether down payment assistance can be paired with it through our team.

Step 4: Complete homebuyer education Required for DPA,complete this early to avoid delays.

Step 5: Find your home Work with a real estate agent who understands VA transactions.

Step 6: Close and move in If assistance is part of your loan with us, we coordinate it with the VA loan so both pieces are ready at closing.

Common Questions from Veterans

Can I use VA + DPA if I've used my VA benefit before? Yes. You can restore or partially use your VA entitlement multiple times. Home Plus doesn't require first-time buyer status.

Does my military retirement count toward income limits? Yes, retirement pay is counted as income for DPA eligibility purposes.

What about VA disability compensation? VA disability compensation is typically tax-free and may not be counted the same way as other income,check your specific situation.

Can my spouse (non-veteran) be on the loan? Yes, though this may affect certain VA loan features. We can explain the implications.

Your Next Steps

As a veteran, you've earned exceptional mortgage benefits. Don't leave money on the table,combine your VA loan eligibility with Arizona DPA.

1. Take the qualifier quiz to check your DPA eligibility.

2. Review programs on our programs page.

3. Call (480) 420-4918 to discuss your specific situation and start the process.

Thank you for your service. Let us help you use the benefits you've earned to buy your Tucson home.