0% Down home loan proposed for teachers, first responders

Aly J. Yale
The Mortgage Reports contributor

Soon, it may be easier to buy a house

A new zero-down mortgage option could be coming soon — at least for teachers, police officers, firefighters, and other first responders. 

The HELPER Act, which was recently introduced 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 zero-down payment required and no PMI.

Are you a teacher or first responder? Are you planning to buy a home down the road? Here’s what the bill could mean for you.

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What is the HELPER Act? 

The HELPER Act, which stands for Homes for Every Local Protector, Educator, and Responder, was introduced 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 a long overdue spotlight on some of America’s most important unsung heroes,” Katko said.

“From teachers, to police officers, to paramedics, EMTs, and firefighters, we saw these professionals faithfully support our nation during the pandemic, and at times put their own lives at risk to uphold their duties.

“Unfortunately, these heroes, who make great sacrifices for our communities, often are unable to find affordable housing in the communities they serve.”

The HELPER Act aims to combat this problem, offering 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.

Notably, these loans would require no down payment. And there’d be no monthly mortgage insurance either.

Borrowers would, however, need to pay an upfront mortgage insurance premium (MIP) worth 3.6% of the total loan amount. 

Once the program is up and running, these loans would presumably 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 passes, the new loan program would only be for certain qualifying teachers and first responders. 

According to the current verbiage, eligible borrowers would include:

  • Law enforcement officers
  • EMTs
  • Paramedics
  • Firefighters 
  • Teachers (pre-K through 12)

The bill also says that borrowers must be employed full-time and have been employed in their occupation for at least four consecutive years. 

When might the new homebuyer bill pass? 

The HELPER Act was introduced in the House of Representatives on May 13 and was referred to the House Committee on Financial Services on the same day. It has not yet been scheduled for review or markup, though, and no other movement has been made on the bill since.

Once the bill is through committee, it will go before the House for a full vote, and then move on to the Senate. 

Whatever happens, we’ll keep you updated as the bill makes progress, so stay tuned.

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