Learn from Others' Mistakes
Every year, thousands of Arizona buyers jeopardize their DPA approval by making preventable mistakes. Some lose thousands of dollars, others miss out on their dream home, and many face months of delays.
The good news? You can avoid all of these pitfalls by learning what NOT to do. We've helped over 1,000 Arizona families navigate the DPA process—here are the most common and costly mistakes we see.
⚠️ Important: Even ONE of these mistakes can delay or deny your application. Read carefully!
Critical Timing Mistakes
Waiting Until You Find a House to Apply
Why It's a Mistake:
DPA approval takes 3-6 weeks minimum. If you find your dream home and apply then, you'll lose the house to other buyers with their financing already lined up.
✓ What to Do Instead:
Start your DPA application 3-4 months BEFORE you plan to buy. Get pre-approved with DPA commitment in hand, then start house hunting. You'll be a competitive buyer who can close quickly.
Timeline: Month 1-2 = Apply for DPA. Month 3-4 = House hunt with approval ready.
Skipping the Homebuyer Education Course Early
Why It's a Mistake:
Most DPA programs REQUIRE homebuyer education certification before approval. Waiting until the last minute creates unnecessary stress and can delay closing by weeks.
✓ What to Do Instead:
Complete your 6-8 hour homebuyer education course online within the first week of starting your DPA journey. Many courses cost under $100 and can be done at your own pace.
Recommended: Framework Homeownership, eHome America, or local HUD-approved counselors
Not Having Documents Ready
Why It's a Mistake:
Missing documents delay your application by weeks. Lenders can't process incomplete applications, and some DPA programs have funding deadlines—if you're too slow, funding may run out.
✓ What to Do Instead:
Gather ALL documents before applying:
- □ 2 years W2s and tax returns
- □ 30 days pay stubs
- □ 2-3 months bank statements
- □ ID and Social Security card
- □ Current lease or mortgage statement
- □ Homebuyer education certificate
- □ Explanation letters (if needed)
- □ Gift letters (if using gift funds)
Credit & Financial Mistakes
Making Major Purchases Before Closing
Why It's a Mistake:
THE #1 WAY PEOPLE LOSE DPA APPROVAL! Buying a car, furniture, or opening new credit cards changes your debt-to-income ratio and credit score. Lenders re-check your credit before closing—new debt = DENIED.
Real Example: Jennifer was approved for $300k home. Bought a $30k car 2 weeks before closing. Her DTI jumped from 42% to 51%. Loan DENIED at the last minute. Lost her earnest money and dream home.
✓ What to Do Instead:
FROM THE DAY YOU APPLY UNTIL CLOSING DAY:
- ✗ Don't buy a car or apply for auto loans
- ✗ Don't open new credit cards (even store cards)
- ✗ Don't finance furniture or appliances
- ✗ Don't co-sign loans for anyone
- ✗ Don't make large cash deposits (over $1,000)
- ✗ Don't change jobs or become self-employed
Wait until AFTER you have keys in hand!
Paying Off Collections Wrong (or Not At All)
Why It's a Mistake:
Paying old collections can actually LOWER your credit score temporarily by resetting the "date of last activity." Meanwhile, not paying collections that ARE required blocks your approval.
✓ What to Do Instead:
Let your lender review collections BEFORE you pay anything. They'll tell you which ones must be paid and which should be left alone. Generally:
- • Medical collections under $2,000: Usually ignored
- • Collections over 2 years old: May not need payment
- • Judgments: Usually must be paid
- • Recent collections: May require payment or payment plan
Maxing Out Credit Cards Right Before Applying
Why It's a Mistake:
Credit utilization over 30% damages your score. Many buyers use credit cards to "save" cash for down payment, but high balances can drop your score 30-50 points—enough to disqualify you or cost you a higher interest rate.
✓ What to Do Instead:
Keep credit card balances below 30% of limits (10% is ideal). If you must use cards, pay them down before your statement closing date each month. Even if you pay in full, high statement balances hurt your score.
Example: $5,000 limit = keep balance under $1,500 for best score impact
Program Selection Mistakes
Working with a Lender Who Isn't DPA-Approved
Why It's a Mistake:
Not all lenders are approved for Arizona DPA programs. You can waste weeks working with a lender, only to discover they can't actually process your DPA application. You have to start over with a new lender.
✓ What to Do Instead:
Before working with ANY lender, ask: "Are you an approved AzHFA lender? Can you process HOME Plus and other DPA programs?" If they hesitate or seem unsure, find a different lender.
Todd Uzzell Home Loans is fully approved for all major Arizona DPA programs. Call us: 480-330-1724
Not Exploring ALL Available Programs
Why It's a Mistake:
Many buyers only know about one or two programs. Arizona has 10+ DPA programs at state, federal, and local levels. You might qualify for programs offering MORE assistance or BETTER terms than what you're using.
✓ What to Do Instead:
Have an experienced lender review ALL programs you might qualify for:
- • State: HOME Plus, Pathway to Purchase, Tax Credits
- • Federal: VA, USDA, FHA, Good Neighbor Next Door
- • Local: Phoenix, Tucson, county programs
- • Employer: Many Arizona employers offer assistance
- • Stacking: Combine multiple programs for maximum help
Assuming You Don't Qualify Without Checking
Why It's a Mistake:
We hear this ALL THE TIME: "I thought I made too much money" or "I thought my credit wasn't good enough." Buyers rule themselves out based on incorrect information and never even try. Meanwhile, they would have qualified easily!
✓ What to Do Instead:
Get a professional opinion! Call a DPA-approved lender for a free consultation. They'll pull your credit (soft inquiry doesn't hurt score), review your income, and tell you EXACTLY what you qualify for.
You might be surprised—most people qualify for more than they think!
Property Selection & Process Mistakes
Falling in Love with a Home Outside Program Requirements
Why It's a Mistake:
DPA programs have specific property requirements: price limits, condition standards, geographic restrictions. Buyers fall in love with a home that doesn't qualify, make an offer, then discover their DPA won't work. They lose their earnest money deposit.
✓ What to Do Instead:
Before making ANY offer, confirm with your lender:
- ✓ Is the price within program limits?
- ✓ Is the property in an eligible area?
- ✓ Does property type qualify (condo, manufactured home, etc.)?
- ✓ Will it pass the required home inspection standards?
Share the listing with your lender BEFORE you make an offer!
Not Saving ANY Money Because "DPA Covers Everything"
Why It's a Mistake:
While DPA covers down payment, you STILL need cash for earnest money ($1,000-2,000), inspections ($500-700), appraisal ($500-700), and reserves (1-2 months payment). Buyers show up at closing with $0 and can't complete the purchase.
✓ What to Do Instead:
Plan to have AT LEAST $3,000-5,000 in savings even with full DPA. This covers:
- • $1,000-2,000: Earnest money deposit (refundable if deal falls through)
- • $500-700: Home inspection
- • $500-700: Appraisal (sometimes required upfront)
- • $1,000-2,000: Cash reserves (lender requirement)
Lying or Hiding Information on Your Application
Why It's a Mistake:
Mortgage fraud is a federal crime. Lying about income, assets, employment, or previous home ownership will be discovered during underwriting. Your loan will be denied, you could lose your earnest money, and you could face legal consequences.
✓ What to Do Instead:
Be 100% honest about everything, even things you think might disqualify you:
- ✓ Previous bankruptcies or foreclosures
- ✓ Past home ownership (even if spouse owned)
- ✓ All sources of income (legal side work counts!)
- ✓ Child support obligations
- ✓ Co-signed loans or debt
Most issues can be worked around if disclosed upfront. Hidden issues = automatic denial.
Quick Reference: The DPA "DO NOT" List
❌ Never Do This During DPA Process:
- ✗ Buy a car or finance anything
- ✗ Apply for new credit cards
- ✗ Close old credit accounts
- ✗ Change jobs or income source
- ✗ Move money between accounts without telling lender
- ✗ Make large cash deposits
- ✗ Co-sign for anyone
- ✗ Miss any bill payments
✓ Always Do This:
- ✓ Start application 3-4 months early
- ✓ Complete homebuyer education immediately
- ✓ Gather all documents before applying
- ✓ Ask lender before paying collections
- ✓ Keep credit card balances low
- ✓ Verify property eligibility before offer
- ✓ Save $3,000-5,000 minimum
- ✓ Be completely honest on application
Your Mistake-Free DPA Checklist
Follow this checklist to avoid all 12 mistakes and ensure smooth DPA approval:
Get Expert Help to Avoid These Mistakes
We've guided over 1,000 Arizona families through DPA—we know every pitfall and how to avoid them