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, giving you assistance that goes directly toward closing costs.

Let's explore 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). This alone saves most buyers $100-$300 per month.

Competitive interest rates. VA rates are typically at or below conventional rates.

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. On a $350,000 Tucson home, that's $7,000-$17,500 in costs including:

• 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 5% 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.

Example calculation:

• Home price: $375,000
• Down payment required: $0 (VA)
• Home Plus DPA: $18,750 (5%)
• Typical closing costs: $12,000
• DPA covering closing costs: $12,000
• Remaining DPA: $6,750 (can go toward VA funding fee or prepaid expenses)

In this scenario, the veteran could purchase with virtually nothing out of pocket.

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

• 640+ credit score
• Income within limits for your household size and county
• 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. On a $375,000 loan, that's about $8,000.

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.

Real-World Scenario: Tucson Veteran Purchase

Let's walk through a realistic example:

Buyer: Army veteran, 5 years active duty, first-time home buyer, credit score 670, household income $75,000

Property: Single-family home in Rita Ranch, $385,000

VA loan amount: $385,000

Home Plus DPA (5%): $19,250

Closing costs breakdown:

• VA funding fee (2.15%): $8,277
• Other closing costs: $8,500
• Total costs: $16,777

DPA applied to closing costs: $16,777

Remaining DPA: $2,473 (credited back or applied to prepaid items)

Out of pocket at closing: Essentially $0 (just earnest money, which is refunded at closing)

Monthly payment: Approximately $2,550 (no PMI!)

This veteran purchased a home with virtually nothing out of pocket while preserving savings.

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 that reflects your VA loan with DPA, showing sellers you're a qualified buyer.

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 We coordinate the VA loan and DPA funding for a smooth 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.