Buying a home as a 100% disabled veteran in Arizona
Mike Certo ·
Arizona is one of the strongest states in the US for a 100%-rated service-connected disabled veteran to buy a home in. The combination of federal benefits + the 2026 HB 2792 property tax exemption + AZ's lack of state tax on military retirement makes the math meaningfully better than most northern states.
Here's what 100% rated AZ veterans should know.
The benefit stack
For a 100% rated disabled vet buying a primary residence in Arizona, these stack:
| Benefit | Annual value | Source |
|---|---|---|
| VA disability compensation (single, no deps) | $44,840/yr | Federal, tax-free |
| VA disability comp (married, 2 kids) | $49,176/yr | Federal, tax-free |
| HB 2792 — Full AZ property tax exemption | $2,000-$8,000/yr | AZ state (2026 expansion) |
| VA funding fee waiver on home loan | One-time ~$10K savings | Federal |
| No state income tax on military retirement | $3,000-$5,000/yr | AZ state |
| Free AZ State Parks pass | $75/yr | AZ state |
| Free AZ vehicle registration (1 vehicle) | $25-$50/yr | AZ state |
| Discounted AZ hunting/fishing licenses | $50-$100/yr | AZ state |
That's roughly $52,000+/year in stacked benefit for a 100% rated AZ veteran with family + military retirement. Over a 20-year retirement: $1M+ in retained value.
The home loan math specifically
A 100%-rated AZ disabled veteran has unique VA loan advantages:
Funding fee WAIVED
Standard VA funding fee on $0-down purchase is 2.15% (first use). On a $475K loan that's $10,213 financed into the loan. For 100% rated vets, this fee is fully waived. Saves ~$63/month on monthly payment over 30 years.
No monthly mortgage insurance
Like all VA loans, no PMI or MIP. Saves ~$200-$400/month vs FHA or conventional with <20% down.
Lower DTI scrutiny in practice
Some lenders informally give 100% rated vets slightly more DTI flexibility because of the very stable income source (VA disability is permanent, federally guaranteed).
Disability income grossed up
VA disability income gets grossed up 25% for mortgage qualification (standard) or 30% with some VA-specialty lenders. For a vet with $4,098/mo disability income, the grossed-up qualifying amount is $5,122/mo.
Real example — 100% rated retiring O-5 in Maricopa County
O-5 retired, 100% rated, married with 2 kids, $76,000/yr military retirement + $4,098/mo VA disability ($49,176/yr).
Buying a $585,000 home in Vistancia (Peoria): - VA loan: $585,000, $0 down, funding fee WAIVED ($12,577 savings) - Monthly P&I (rate-dependent — current quote available on request): $3,698 - Maricopa property tax in year 1 (before HB 2792 applied): 0.51% = $249/mo - Maricopa property tax after HB 2792 fully applied: $0 - Insurance: ~$130/mo - HOA (Vistancia): ~$120/mo - Total PITI year 1: ~$4,197 - Total PITI year 2 (HB 2792 applied): ~$3,948
Qualifying income: $76K/12 = $6,333 retirement + $5,122 grossed-up disability + spousal Social Security ($2,400 typical) = ~$13,855/mo qualifying income.
DTI: $4,197 / $13,855 = 30% — well under the 41% VA guideline.
Residual income passes easily (West region family-of-4 requires $1,117/mo; this vet has $7K+ residual after PITI + utilities + estimated debts).
What to do before you buy
1. Get your disability rating in the VA system
If your rating is still being adjudicated or appealed, time the home purchase carefully. A rating that comes through 30 days BEFORE closing waives your funding fee at closing. A rating that comes through AFTER closing requires you to file a separate refund request later (which works, but takes 4-8 weeks).
2. Pull your current Certificate of Eligibility
Your COE should confirm 10%+ disability rating. If it doesn't reflect a recent rating update, request a new one. Free through VA.gov.
3. Verify HB 2792 timing
The AZ disabled vet property tax exemption applies starting the tax year AFTER you file Form 82514B with your county assessor (by September 1 deadline). Closing in October means waiting until next tax year for the full exemption.
4. Calculate residual income with disability income included
Use the residual income calculator. 100% rated vets typically have very strong residual income, which helps approval even on aggressive purchases.
5. Consider stacking AZ DPA
Yes, you can still use AZ DPA programs (Home Plus, Home In Five Advantage with veteran bonus) on top of your VA loan even with 100% rating. The DPA money goes to closing costs or principal — saving more cash flow.
Why AZ vs other states
Compared to common alternative retirement states:
- California — Charges state income tax on military retirement. Higher property tax. Higher home prices. Better climate variety. Loses on financial benefits.
- Texas — No state income tax. Higher property tax effective rates (1.83% vs AZ's 0.51% in Maricopa). Hot summers similar to AZ. Toss-up financially; AZ wins on property tax especially after HB 2792.
- Florida — No state income tax. Lower property tax than TX but higher than AZ. Humid summers vs AZ dry. Hurricanes affect insurance costs. AZ wins on cost-of-ownership.
- Tennessee — No state income tax. Lower home prices but higher property tax. Real winters. AZ wins on overall climate + cost combination.
How to get started
The simplest first move: get a Certificate of Eligibility (or refresh yours), then have a conversation about your specific scenario.
Contact me or call (480) 296-6513. I work with disabled veterans across the rating spectrum and know the AZ-specific math.