Go from renter to homeowner with a firefighter mortgage program
Firefighter mortgage programs are designed to make homeownership more accessible for these important public servants.
Depending on your needs and where you want to buy, as a firefighter, you might be in line for extra-low mortgage rates, discounted fees, and even home buying grants.
These special mortgage programs put homeownership within reach for firefighters nationwide. Explore your options to see what’s available where you live.Verify your home buying eligibility (Aug 10th, 2020)
8 home loans for firefighters
- Good Neighbor Next Door
- Firefighter Next Door
- Homes for Heroes
- Wells Fargo NeighborhoodLIFT®
- Firefighter credit unions’ mortgage programs
- Down payment assistance programs
- Local home loan programs for firefighters
Other options for firefighters: Standard mortgage programs
1. Good Neighbor Next Door
Good Neighbor Next Door (GNND) has to head any list of firefighter mortgage programs.
That’s because Good Neighbor Next Door offers you a half-price home.
Literally: you’re given “a discount of 50% from the list price of the home,” according to the website of the US Department of Housing and Urban Development (HUD), which runs the program.
You’re already asking, “What’s the catch?” And there are several. Those include that you must:
- Be a paid firefighter (volunteers are not eligible)
- Buy in a designated “revitalization” area, which by definition is likely to be economically challenged
- Live in the house for at least three years
- Select your home from HUD’s own, limited listings, which comprise FHA foreclosures
Admittedly, many will find these rules too restrictive.
You might not want to commit to living in a socially challenged neighborhood for three years. It may be a long way from work. There could be a shortage of suitable HUD homes when you’re looking … there’s a long list of possible objections.
But imagine where you’ll be in three years. You’ll likely have a 40% or 50% down payment on a great home in a better neighborhood. And you’ll have climbed several rungs on the housing ladder in just 36 short months. Worth it? Up to you.
2. Firefighter Next Door
Firefighter Next Door (FND) lacks GNND’s home-price discount. But it offers instead a range of very attractive benefits that are open to paid and volunteer firefighters alike — as well as EMTs and support staff. And it lacks those GNND rules that can be offputting.
Firefighter Next Door mortgage benefits include:
- Home buying grants between $1,000-$4,170, or up to $6,000 in certain areas
- Down payment assistance of up to $10,681
- No application fee or broker fees
- Free appraisal (cash grant of $545 on closing)
- Discounted title fees
- A streamlined refinance process
And, unlike with GNND, you can buy any mortgageable home you want, wherever you want. You do not have to purchase a home listed by HUD.
Firefighter Next Door also doesn’t impose any minimum residency requirements, though some of the down payment assistance programs it introduces you to might.
Firefighter Next Door: Fresh Start Program
Fresh Start is an add-on to the main FND program. It helps those whose credit scores are too low for them to qualify for a mortgage. FND’s website explains:
“We will discover exactly what credit challenges are preventing your mortgage loan from being approved and help you overcome these issues as quickly and efficiently as possible.
“This service has proven to be extremely effective in helping buyers raise their credit scores and make home ownership a reality. Consultations are FREE.“
If you’re a firefighter looking to buy a home, but have a low credit score, we’d highly recommend looking into this program.
3. Homes for Heroes
Homes for Heroes (HFH) says its qualifying heroes include current and former firefighters, paramedics and EMTs.
It reckons those heroes save on average $2,400 when they buy or sell a home through its program.
When you’re buying, those savings come from discounts from property professionals who are participants in the HFH program. So you can save on fees charged by:
- Real estate agents
- Mortgage providers
- Home inspectors
- Title specialists
Your savings will come in the form of a single check from HFH after closing. And the more of those participating specialists you use, the more you should save.
You can also save when you’re selling through a participating agent. You should get a 25% discount on gross commission.
4. NeighborhoodLIFT (Wells Fargo)
NeighborhoodLIFT isn’t exclusively for firefighters or even first responders. So this is one that might help volunteer firefighters. And Wells Fargo says:
“From firefighters and police officers to veterans, hundreds of first responders across the U.S. have become homeowners with help from Wells Fargo’s NeighborhoodLIFT® program.”
The bank reckons, “Down payment assistance grants can total up to $15,000 for most recipients,” though the actual amount varies depending on the housing market where you live.
This program is intended to help those on modest or moderate incomes. So if you’re a volunteer firefighter with a highly paid main job, you probably won’t qualify for (or need) help.
5. Firefighter mortgage programs from credit unions
The National Council of Firefighters Credit Unions has counted more than 100 firefighter credit unions with 800,000 members across North America.
Given that the National Fire Protection Association reckons that there are only 370,000 career firefighters in the US (and 745,000 volunteers) you might conclude that plenty of volunteer firefighters are served by these local lenders, too.
Pretty much all these credit unions offer their members mortgages and many are likely to offer attractive deals, especially to first-time buyers.
Credit unions can be an excellent choice for low rates, or for the chance to work one-on-one with a local mortgage professional who can guide you through qualifying and applying for a mortgage.
There’s also a good chance you could tie your mortgage to a down payment assistance program. And we’re covering those next.
6. Down payment assistance programs
There are over 2,000 down payment assistance programs (DPAs) across the United States. And at least one (sometimes several) will be available in the place where you want to buy.
Each DPA gets to set its own eligibility criteria and decide what form the help it offers takes. So the amount of assistance you can apply for will be a bit of a ZIP-code lottery.
At best, you could receive a grant (nonrepayable gift) of several thousand dollars. At worst, that money could come as a loan, typically with a very low interest rate, that you have to repay in parallel with your mortgage.
Other programs provide interest-free loans that you repay only when you move or refinance — or that are forgiven after you’ve remained in residence for x years.
Lenders are typically on board with all types of DPA. But you do need your lender’s cooperation to use the assistance toward your loan — so double check before signing to make sure they’ll play ball.
7. Local firefighter mortgage programs
Many states, counties and cities run special homeownership programs for firefighters, law enforcement officers, teachers and other public employees.
These may offer preferential mortgage rates and assistance with down payment and closing costs. Some are limited to first-time buyers or career firefighters, but not all of them.
Simply do a web search for firefighter mortgage programs in your city, ZIP code, county, or state to see what’s available.Verify your home buying eligibility (Aug 10th, 2020)
Mortgage programs that aren’t just for firefighters
If you want to know more about any of the above options, your first source should be your colleagues in your fire station. See if you can get a first-hand account of the process and benefits from someone who’s actually used these types of programs.
Don’t be surprised if it turns out that the best deal for you is a vanilla-flavored loan that’s also available to the general population.
If they can’t help, try calling your state’s housing finance agency. It should be able to point you toward your best bets, including local DPAs. A web search might achieve the same outcome.
But don’t be surprised if it turns out that the best deal for you is a vanilla-flavored loan that’s also available to the general population. These include:
If you’ve served in the military prior to becoming a firefighter, you’re likely to find a VA loan unbeatable. Through the US Department of Veterans Affairs, your service entitles you to:
- A zero down payment
- Some of the lowest rates around
- No continuing mortgage insurance
- Easier credit requirements than most
So your privileges as a veteran may trump those that come from being a firefighter.
You can read more about the qualification requirements for a VA mortgage here.
Like VA loans, USDA loans do not require a down payment. And you’re typically in line for reduced mortgage insurance payments and very competitive mortgage rates.
These loans, backed by the US Department of Agriculture, are supposed to stimulate growth in rural areas. So you can’t buy a downtown condo with one of them.
But “rural” is defined quite widely and includes some suburbs. Indeed, 97% of the US map comprises areas eligible for USDA loans.
Learn more about who qualifies for a USDA loan here.
FHA and low-down-payment conventional loans
These two popular mortgages compete with one another.
If you qualify, a conventional loan may be better because you can make a down payment of just 3%. And you can escape mortgage insurance payments earlier. But you need reasonably good credit to qualify.
FHA loans (backed by the Federal Housing Agency) require a 3.5% down payment but are available to those with lower credit — starting at just 580.
Be aware that both these loans come with mortgage insurance requirements. And that FHA ones come with more burdensome rules over those.
Explore your home loan options
Firefighters have plenty of mortgage options — some tailored to the profession and some not.
Make sure you explore both types of programs (firefighter mortgages and standard mortgages) to make sure you’re getting the best deal overall. Compare rates, fees, and special savings.
Ready to see what you could afford?Verify your new rate (Aug 10th, 2020)