New bill proposed to help teachers and first responders buy homes

A new proposal could make buying a home easier for these professionals.

There are several hurdles that potential homeowners face in buying a property: finding the perfect home, qualifying for a mortgage, and securing the funds for a down payment. The latter can be extremely difficult for potential buyers with limited savings, but the reality is that many people can afford a monthly mortgage payment – they just can’t afford to find a huge pile of cash on closing.

There is already a loan program for borrowers who find a down payment a challenge: VA loans. These loans do not require closing funds. But as the name suggests, these mortgages are limited to serving military personnel, U.S. veterans, and their surviving spouses.

Now lawmakers are proposing a new mortgage program similar to the VA loan program. And if that becomes law, it could greatly benefit teachers and first responders.

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More borrowing options for some professionals

On May 13, U.S. representatives John Rutherford (Florida), Al Lawson (Florida), John Katko (New York) and Bonnie Watson Coleman (New Jersey) introduced the Homes for Every Local Protector, Educator, and Responder Act. Under this bill, teachers and first responders would be eligible to finance a house with no cash, the same way VA loans work.

Like the VA loan program, which has a financing fee, this new loan program would require borrowers to pay an initial mortgage insurance premium equal to 3.6% of the principal of a loan. However, borrowers do not must pay outstanding mortgage insurance premiums. (This is different from FHA loans, which allow borrowers to buy with little money, but require mortgage insurance premiums up front and on-going).

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Those eligible for the new loan program would include:

  • Teachers in public and private schools
  • Police officers
  • Firefighters
  • Paramedics
  • EMT
  • Prison guards

To be eligible for the loan program, borrowers must have practiced these professions for at least four years. They must also prove that they are in good standing with the employers and that they intend to keep the same type of job for at least a year.

Open the door to the property

In today’s real estate market, where inventory is extremely low and house prices inflated, it can be even more difficult to find a down payment. While there are existing programs, like FHA loans, that allow a low down payment (as low as 3.5%), some people cannot afford to shell out cash at closing unless they are they do not deplete their cash reserves, leaving no funds for home repairs. or other emergencies. If this new loan program comes to fruition, many public service professionals will have a much easier time owning homeowners – and enjoying the financial stability that comes with it.


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