Rep. Ruben Gallego faces questions over terms of D.C. home purchase

Rep. Ruben Gallego received a lower-cost home loan in Washington, D.C., last year in part by calling the purchase his primary residence, though he splits time between the nation’s capital and Phoenix.

The 30-year loan, backed by the Department of Veterans Affairs, drew unflattering attention from Politico, which first reported it Monday.

It comes as Gallego, D-Ariz., is running for the U.S. Senate seat held by Sen. Kyrsten Sinema, I-Ariz. She has filed preliminary paperwork to seek another term but has not officially said she will do so.

Gallego qualified for the loan as a Marine Corps veteran who fought in the Iraq War. VA-backed loans typically include language requiring purchases to be primary residences. Those loans often have lower interest rates and include other terms more favorable than found in standard mortgages.

Under the terms of the August loan, Gallego and his wife agreed to move into the house within 60 days and “shall continue to occupy the Property as Borrower’s Principal residence for at least one year after the date of occupancy,” records show.

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Gallego has lived with his wife for years at a house they originally bought with a VA-backed loan in Phoenix that they continue to own. In 2021, the couple refinanced the Phoenix property in a deal that doesn't involve the VA, records show.

The VA would not discuss Gallego’s loan, citing its privacy policies. The agency did not allege fraud, however.

In a written statement to The Republic, the agency said its loan “requirements are applied equally to all Veterans and Service members, and there is no exception to the policy based on a Veteran’s occupation. There is, however, an option for Veterans to ‘discuss unusual circumstances of occupancy with the appropriate VA office or submit a description of the circumstances to the VA office for prior approval.’”

Tate Mitchell, a spokesman for the National Republican Senatorial Committee, said the question of principal residency creates problems for Gallego and for Democrats.

“If Ruben Gallego signed fraudulent documents, that will be a serious issue for him in the election — and potentially with the authorities,” Mitchell said. “National Democrats are in a serious pickle as they choose between their incumbent, Kyrsten Sinema, and accused fraudster Ruben Gallego.”

Hannah Goss, a Gallego campaign spokesperson, maintained to Politico he acted appropriately.

“The VA loan is a benefit that Ruben earned by serving his country as a Marine combat veteran, and he’s well within his right to use it as a residence when he’s doing his job in D.C.,” she said.

“It comes with being both a veteran and a congressman who needs to live and work in two places. Ruben expected to face a lot of political attacks in the race, but taking a loan he earned by serving in Iraq isn’t one of them.”

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The campaign provided The Arizona Republic with the same response.

Gallego’s purchase seems to straddle VA rules on occupancy.

In an explanation of its rules, the VA says “The veteran need not maintain a physical presence at the property on a daily basis. However, occupancy ‘as the veteran’s home’ implies that the home is located within reasonable proximity of the veteran’s place of employment,” according to one chapter on occupancy.

But the same chapter also notes the VA expects a “history of continuous residence in the community” and that there “must be no indication” the veteran has or hopes to have a principal residence elsewhere.

If there are “unusual circumstances” surrounding occupancy, the VA calls for prior approval. Gallego’s campaign declined to elaborate on whether he did so, but told Politico the lender knew he was a member of Congress and how he intended to use the property.

Gallego receives a tax credit in Maricopa County for his Phoenix house that indicates it is a primary residence. In 2022, that credit discounted his overall property taxes by $492, records show.

This article originally appeared on Arizona Republic: Rep. Ruben Gallego faces questions over terms of D.C. home purchase