Soon it may be easier to buy a home
A new zero-down mortgage option could come soon – at least for teachers, police officers, firefighters, and other first responders.
The HELPER Act recently passed in the House of Representatives aims to create a mortgage program just for these professionals.
In many ways, this new loan would mimic the VA loan program, with a zero down payment and no PMI.
Are you a teacher or a first responder? Are you planning to buy a home on the street? That could mean the bill for you.
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What is the HELPER law?
The HELPER Act, which stands for Homes for Every Local Protector, Educator, and Responder, was passed last month by Reps John Rutherford (FL-04), Bonnie Watson Coleman (NJ-12), John Katko (NY-24), and Al Lawson (FL-05).
"The ongoing pandemic has put some of America's most important unsung heroes in the spotlight," Katko said.
“From teachers to police officers to paramedics, paramedics and firefighters, we've seen these professionals loyally support our nation during the pandemic, sometimes putting their own lives on the line to perform their duties.
"Unfortunately, these heroes, who make great sacrifices for our communities, often fail to find affordable housing in the communities they serve."
The HELPER Act aims to counteract this problem and offers a new, affordable loan option under the Federal Housing Administration.
How the HELPER Act would work
HELPER Act mortgages would work much like VA home loans, except through the FHA.
In particular, these loans would not require a down payment. And there would be no monthly mortgage insurance either.
However, borrowers would have to pay an upfront mortgage insurance premium (MIP) equal to 3.6% of the total loan amount.
Once the program is up and running, these loans will likely be available through any FHA approved mortgage lender. Most mainstream lenders are already authorized to offer FHA loans.
Who would qualify?
If the HELPER Act is passed, the new loan program would only apply to certain qualified teachers and first aiders.
According to the current wording, eligible borrowers would be:
Law enforcement officers, EMTs, paramedics, fire-fighting instructors (before K to 12)
The bill also states that borrowers must be employed full-time and have been employed in their profession for at least four consecutive years.
When could the new homebuyer bill come into effect?
The HELPER Act was enacted in the House of Representatives on May 13 and referred to the House Financial Services Committee on the same day. However, no review or upgrade has been planned and no further movement has been made on the bill since then.
Once the bill goes through the committee, it will be submitted to the House of Representatives for a full vote and then submitted to the Senate.
Whatever happens, we'll keep you updated as the bill progresses. So stay tuned.
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