Mortgage Program Options for Police Officers & First Responders
There's no doubt you have a stressful job as a police offer or first responder. With lives on the line, difficult decisions have to be made daily. Thankfully, first responder and police mortgage programs are created just for you.
First responder mortgage programs and discounts
There are many government, state, and local homeownership benefits available for first responders to consider. But before you start taking a closer look at possible home financing options, it's critical to know whether you're eligible to verify as a first responder. ID.me defines such an individual "as an active or retired employee of an emergency service who is likely to be among the first people to physically arrive at the scene of an emergency."
You may qualify for a first responder mortgage if your occupation is a law enforcement officer, firefighter, emergency medical technician (EMT), or 911 dispatcher. However, occupational titles such as registered nurses, doctors, or other medical professionals aren't considered first responders. Check out the ID.me website for information about verifying as a first responder.
Please note that state and local first responder mortgage programs can vary by location. So be sure to review your state and local municipality websites to fully understand your options.
The HELPER Act stands for "Homes for every local Protector, Educator, and Responder." The proposed bill would provide more affordable home financing to local law enforcement, firefighters, medical professionals, and teachers. Though borrowers would be responsible for an upfront mortgage insurance premium (MIP) worth almost 4% of the total loan amount, they would benefit from no down payment, monthly mortgage insurance, or geographic restrictions.
Senators Marco Rubio and Jon Ossoff introduced the HELPER Act in 2021. Rubio held a press conference on May 17, 2022 to further highlight the details of the program and garner additional support. If the bill passes and the program begins, eligible borrowers could most likely obtain this type of financing through an FHA- or HUD-approved lender.
HUD Good Neighbor Next Door
Both law enforcement professionals and first responders have the opportunity to participate in the U.S. Department of Housing and Urban Development's (HUD's) Good Neighbor Next Door program. This program helps public servants purchase homes in revitalizing neighborhoods.
You can buy a HUD home for 50% of the appraised value when the house is located in a specified area through the Good Neighbor Next Door program. Properties are available for purchase through the program for seven days.
Check the listings for your state to see what's available. Follow the instructions to submit your interest in purchasing a specific home. If multiple people submit an offer on a single home, a selection will be made randomly via lottery. You must meet the requirements for a law enforcement officer or first responder and comply with HUD's regulations for the program.
Homes for Heroes
Homes for Heroes partners with real estate agents, lenders, and title companies to help first responders save on home buying expenses. The program's website says qualified occupations include law enforcement, firefighters, EMS, military (active and retired), healthcare professionals, and teachers.
Borrowers who use Homes for Heroes save an average of $2,400 by working with its network of professionals. That said, the organization is not a lender. You may find it more helpful to work with a family-owned, national mortgage banker like American Financing.
First responders can get into a home of their own with just 5% down, thanks to a conventional mortgage. You'll benefit from a fixed rate over the life of the loan, so your payment will never increase. When determining their housing budget, conventional borrowers must account for private mortgage insurance, or PMI.
Expect your lender to review your credit score and debt-to-income ratio before moving forward with a first responder mortgage. While you may not need excellent credit to qualify, you must have a solid history of paying your bills on time and keeping outstanding debt to a minimum.
Federal Housing Administration (FHA) loans are government-insured and easy to qualify for. They're especially popular among first-time homebuyers because of the flexible down payment and credit score requirements.
Buying a home with an FHA loan allows you to pay a low down payment amount of 3.5%. Applicants generally must have a minimum FICO score of 580 to qualify.
Down payment and credit score aside, there is a multitude of requirements. These can range from providing reliable income paperwork to requiring to pay for monthly mortgage insurance. Don't let these small hurdles discourage you, and speak with a trusted mortgage lender to get the full picture.
Looking for law enforcement home buying programs? Many police officers and first responders have served in the military, so they're eligible for Veteran Affairs (VA) loans. These loans do not demand a down payment, and, unlike the FHA loans, borrowers don't have to pay for mortgage insurance. VA loans can provide incredible value.
No down payment and no mortgage insurance requirements make VA loans one of the most attractive programs in the industry. The government also guarantees the loan, so rates tend to be lower than what's available for other mortgage programs. More importantly, it's available to veterans, active-duty military members, and qualified spouses.
To be eligible, you (or your spouse) must have served 181 days during peacetime, 90 consecutive days during wartime, or six years in the National Guard or Reserves. Be sure to double-check with a licensed mortgage expert to see if you qualify.
Maybe you're a first responder interested in moving to a rural area. A USDA loan could help you achieve your homeownership goals without a down payment. You'll just have to show at least two years of steady employment and verify that the property will be your primary residence.
USDA loans are reserved for those financing a property in a suburban or rural area with a population of 10,000 or less. But the good news is that you don't have to purchase a ranch or farm to qualify for this program. Plus, like the first responder mortgage programs explained above, you may be eligible with a less-than-perfect credit score.
First responder down payment grant and assistance
We recommend that borrowers using a Freddie Mac Home Possible or HomeOne mortgage research the BorrowSmart℠ program. Depending on your household income, you may receive up to $2,500 in down payment assistance. Eligible property types include single-family homes and condos.
Other first responder down payment assistance programs are generally offered at the local level. The majority are exclusively available in certain cities or counties, but some are available at the state level.
For example, there is down payment assistance available for Texas police officers and first responders as part of a program called Homes for Texas Heroes. This program provides down payment assistance from 3% to 5% of the total loan amount. Do your research since not all mortgage lenders may participate in the program.
Get a home loan you deserve
At American Financing, we believe that public service should be commended and awarded. That's why we go above and beyond to create an easy, affordable mortgage process for first responders and police officers. Whether you're looking to buy a new home or refinance an existing home, you can count on us for exceptional service.
Ready to explore first responder mortgage options? Schedule an appointment with an American Financing mortgage consultant to see what options are available.