Quick Answer
Veterans can stack a VA loan (zero down) with most DPA programs to cover closing costs, funding fees, and prepaid expenses. Several states run dedicated veteran mortgage programs (Texas VLB, CalVet, Oregon ORVET, Wisconsin VALOR). National grants like Chenoa Fund and NHF Grant work alongside VA loans and have no first-time buyer requirement. Florida Hometown Heroes explicitly includes veterans. Disability compensation is treated as qualifying income and often grossed up 25% for taxes.
If you've served in the military, you already have access to one of the most powerful home loan benefits in the country: the VA loan. Zero down, no PMI, lower interest rates, and no first-time buyer requirement. For most veterans, that's the starting point.
But the VA loan covers the purchase itself. Closing costs, the VA funding fee, and prepaid expenses (taxes, insurance, escrow reserves) can still total 3-5% of the purchase price out of pocket. That's where down payment assistance comes in. Several national and state programs work alongside the VA loan to cover these costs, and a few states run veteran-specific mortgage programs that can beat the VA loan's terms outright.
This guide covers every major DPA option available to veterans at the national, state, and federal level. Whether you're buying your first home, your third, or transitioning out of service, there's likely a stack of benefits that drops your out-of-pocket cost to near zero.
Who Qualifies as a Veteran for DPA Programs?
Different programs use different definitions. Most veteran-specific DPA programs accept these service categories:
Active Duty
- Army, Navy, Air Force, Marines, Space Force
- Coast Guard (DHS wartime, DOD active)
- Reservists with qualifying service
- National Guard (Title 10 or 32 service)
Retired / Separated
- Honorably discharged veterans
- Medical retirees
- 20+ year retirees with retirement pay
- Disabled veterans (any rating)
Surviving Spouses
- Spouses of veterans killed in action
- Spouses of veterans who died from service-connected disability
- Spouses of MIA/POW veterans
- Eligible for VA loan and most state veteran programs
Service Requirements
- 90+ days wartime active duty
- 181+ days peacetime active duty
- 6+ years Reserve/Guard
- Honorable or General discharge
Dishonorable discharges and some Other-Than-Honorable discharges disqualify veterans from VA-connected benefits. Some state veteran programs have looser or state-specific residency requirements on top of these.
Start With the VA Loan: Your Foundation
Before looking at DPA, understand what the VA loan already gives you. This is the baseline every veteran should consider:
The baseline veteran benefit — zero down, no PMI
Critical detail: The VA funding fee is waived for veterans with a service-connected disability rating of 10% or higher, and for surviving spouses of veterans killed in action. This single waiver is worth thousands of dollars on most loans.
What VA loans do NOT cover
The VA loan covers the down payment itself (it's zero). But buyers still face closing costs (typically 2-5% of the purchase price), prepaid taxes and insurance escrows, and the VA funding fee (if not waived). On a $400,000 home, that's often $10,000-$20,000 out of pocket. This is where DPA programs become valuable for veterans — not for down payment, but for the costs around it.
State-Specific Veteran Mortgage Programs
Several states run their own veteran home loan programs with rates and terms that sometimes beat the federal VA loan. These are separate products, not add-ons to the VA loan.
1. Texas Veterans Land Board (VLB) Home Loan
Texas-only — one of the strongest state veteran programs
Why it matters: The VLB home loan rate is typically lower than even VA rates, and disabled veterans get an additional 0.25% discount. Texas also has a separate VLB Land Loan for rural land purchases, a benefit that doesn't exist in most other states.
2. CalVet Home Loans (California)
California-only — administered by the CA Dept of Veterans Affairs
Unique structure: CalVet uses a "contract of sale" where the state holds title until you pay off the loan. This allows below-market rates and built-in disaster coverage most loans don't include. California veterans should compare CalVet to the federal VA loan carefully — the answer depends on rate, property, and plans for disaster-risk coverage.
3. Oregon ORVET Home Loan
Oregon-only — one of only five state veteran mortgage programs
4. Wisconsin WHEDA Veterans Affordable Loan Opportunity Rate (VALOR)
Wisconsin veterans — combines discounted rate with WHEDA DPA
5. Alaska AHFC Veterans Mortgage Program
Alaska-only — dedicated veteran program with reduced rates
HUD Good Neighbor Next Door: 50% Off for Some Veterans
The HUD Good Neighbor Next Door (GNND) program sells HUD-owned foreclosures in designated revitalization areas at 50% off the list price. It's not open to all veterans, but veterans who also work in qualifying professions can stack GNND with VA benefits for one of the most powerful purchase combos in the country.
50% discount on select HUD homes in revitalization areas
Veterans who qualify: You must work in one of the four qualifying professions (law enforcement, K-12 teacher, firefighter, EMT) as your primary job. Being a veteran by itself does not qualify you for GNND, but many veterans work in these fields post-service and can combine both benefits.
National DPA Programs That Work With VA Loans
These national programs work alongside your VA loan to cover closing costs, funding fees, and prepaids. Most don't require first-time buyer status, which matters because many veterans have used their VA entitlement before.
Chenoa Fund DPA
VA-CompatibleAssistance: 3.5%-5% of purchase price, forgivable after 36 on-time payments
Credit: 600 minimum | First-time: Not required | Income limits: None
Why veterans use it: Works with VA, FHA, and conventional. No income cap, no first-time requirement, forgivable after 3 years. Covers VA funding fee, closing costs, and prepaid items.
National Homebuyers Fund (NHF) Grant
VA-CompatibleAssistance: Up to 5% grant, no repayment
Credit: 640 minimum | First-time: Not required | Income limits: None
Why veterans use it: True grant. No repayment. Can be used to cover VA funding fee and closing costs, turning a VA loan into a true $0-at-closing purchase.
GSFA Golden Opportunities (California)
VA-CompatibleAssistance: Up to 5% of loan amount
Credit: 640 minimum | First-time: Not required
Why veterans use it: Explicitly allows VA loan combinations. California veterans can stack with VA or CalVet for closing cost coverage.
Florida Hometown Heroes
FL OnlyAssistance: Up to 5% (max $35,000) deferred 0% loan
Credit: 640 minimum | First-time: Required | Income limits: By county AMI
Eligible: Active duty military, veterans, law enforcement, healthcare workers, teachers, firefighters
Why Florida veterans use it: Includes active duty and veterans as eligible occupations. Stackable with VA loan for closing cost coverage.
State Housing Finance Agency (HFA) Programs
State-SpecificAssistance: Varies by state (typically 3-5% of loan amount)
Examples: THDA (TN), SC Housing, MSHDA (MI), OHFA (OH), VHDA (VA), NCHFA (NC), Texas TSAHC, AZ Home Plus
Why veterans use them: Most state HFA programs work with VA loans. Many waive first-time buyer requirements for veterans specifically, or offer enhanced assistance for active duty military.
Disability Compensation & Mortgage Qualification
VA disability compensation is one of the most valuable qualifying income sources for mortgage underwriting. Here's how lenders treat it:
Grossed Up on Conventional Loans
VA disability is non-taxable, so conventional loan underwriters typically gross it up by 25% when calculating qualifying income. A veteran receiving $2,000/month in disability can effectively use $2,500/month for qualification purposes. This can meaningfully increase the loan amount you qualify for.
Continuance Requirement
Lenders require the disability benefit to continue for at least three years after loan closing. Permanent disability ratings (especially 10%+ service-connected) easily meet this test. Your VA benefit award letter is the documentation.
Funding Fee Waiver
Veterans with a service-connected disability rating of 10% or higher do not pay the VA funding fee (normally 1.25-3.3% of the loan amount). On a $400,000 loan, that's $5,000-$13,200 saved at closing. Always verify your rating with your lender.
Property Tax Exemptions
Most states offer partial or full property tax exemptions for 100% disabled veterans, and many extend partial exemptions to veterans with lower disability ratings. Texas, Florida, and California all have meaningful disabled veteran property tax benefits. Check your state's veteran affairs department website for current rules.
Which Stack Should Veterans Use?
Your best stack depends on where you live, your service history, and whether you've used your VA entitlement before:
First-time buyer in a state with a veteran program (TX, CA, OR, WI, AK)
Compare: Federal VA loan vs. state veteran program (VLB, CalVet, ORVET, WHEDA VALOR, AHFC). Check which has the lower rate on your loan size. Stack the winner with Chenoa Fund or NHF Grant for closing costs.
Disabled veteran (10%+ rating)
Top stack: VA loan (funding fee waived) + Chenoa Fund or NHF Grant for closing costs. Your disability compensation also grosses up 25% for qualification. Check state property tax exemptions before choosing your city.
Repeat VA user (already used entitlement)
Top pick: VA loans can be reused with full or partial entitlement. If you've paid off a prior VA loan, you usually get full entitlement back. If you still have an active VA loan, check your remaining entitlement. Chenoa Fund and NHF Grant don't require first-time buyer status, so they pair well here.
Veteran working as law enforcement, teacher, firefighter, or EMT
Top combo: HUD Good Neighbor Next Door (50% off) + VA loan ($100 down after discount, sometimes $0). This is the single most powerful veteran stack for buyers in designated revitalization areas, but inventory is limited and you must commit to 3 years of occupancy.
Florida veteran (any service era)
Top pick: VA loan + Florida Hometown Heroes ($35,000 deferred 0% loan). Hometown Heroes explicitly includes veterans as an eligible occupation, and you can stack it with the VA loan for one of the best state-level veteran deals in the country.
Veteran with excellent credit (740+)
Compare both: A conventional loan with 3% down can sometimes beat VA on rate for high-credit borrowers, and avoids the VA funding fee entirely if you're not funding-fee-exempt. Run both scenarios before committing. NHF Grant works with conventional loans too.
Real Example: Disabled Veteran Buying in Texas
Scenario: Army veteran, 30% VA disability rating, buying a $350,000 home in San Antonio
Household income: $85,000 ($60K W-2 + $25K disability compensation) | Credit score: 720 | Not a first-time buyer
Texas VLB + Chenoa Fund (Best Fit)
Down payment: $0 (VLB)
VA funding fee: $0 (30% disability waiver)
Closing costs (~$10K): Covered by Chenoa
Chenoa Fund = $12,250 (3.5%)
$0 out of pocket at closing
Chenoa forgivable after 36 on-time payments. VLB below-market rate with extra 0.25% disabled discount.
Conventional + NHF Grant
3% conventional down = $10,500
Closing costs (~$8K)
NHF Grant 5% = $16,975
Disability income grossed up 25% for qualification
~$1,500 surplus after grant
Avoids VA funding fee concern for higher-rated disabilities. Higher rate than VLB. PMI required until 80% LTV.
For this veteran, the Texas VLB + Chenoa Fund stack wins on total cost: below-market rate, no funding fee, no out-of-pocket at closing, and the Chenoa assistance is forgivable after 3 years. The conventional path can make sense in higher-credit scenarios where the VA funding fee is not waived, but here the disability waiver tips the math decisively.
Frequently Asked Questions
Can veterans use down payment assistance with a VA loan?
Yes. Most DPA programs work alongside VA loans, typically to cover closing costs, funding fees, or prepaid items rather than the down payment itself (which VA already covers). Chenoa Fund, NHF Grant, GSFA Platinum, Florida Hometown Heroes, and most state housing finance agency programs all allow VA stacking.
What is HUD's Good Neighbor Next Door program for veterans?
Good Neighbor Next Door (GNND) sells HUD-owned homes in designated revitalization areas for 50% off. It's open to law enforcement, K-12 teachers, firefighters, and EMTs. Veterans qualify only if they also work in one of these professions. When they do, GNND stacks with VA loans for an extraordinarily low out-of-pocket purchase.
Do veterans have to be first-time homebuyers to get DPA?
Not for most programs. VA loans have no first-time requirement. Chenoa Fund, NHF Grant, GSFA Golden Opportunities, and most state veteran programs also don't require first-time status. Some state HFA programs like CalHFA MyHome do. Check each program.
How is VA disability income treated for mortgage qualification?
VA disability compensation qualifies as income and is typically grossed up 25% on conventional loans because it's tax-free. Lenders require the benefit to continue at least 3 years after closing, which permanent disability ratings easily meet. Your VA benefit letter is the documentation.
Which states have the best veteran-specific DPA?
Texas (VLB), California (CalVet), Oregon (ORVET), Wisconsin (WHEDA VALOR), and Alaska (AHFC) all have dedicated state veteran mortgage programs. Florida Hometown Heroes explicitly includes veterans and active duty military as eligible occupations.
Can I use a VA loan and still get a forgivable DPA grant?
Yes. Chenoa Fund and NHF Grant both work with VA loans and provide forgivable or grant-based assistance. You can combine the zero-down VA loan with free money to cover the funding fee and closing costs, making a true $0-at-closing purchase possible for qualifying veterans.
See Every Veteran DPA Program in Your State
Enter your state, county, income, and home price to see which DPA programs stack with your VA loan.
Check My Eligibility →Free tool • No signup required • Instant results
Browse DPA Programs by State