Proposed legislation recently introduced to the House of Representatives seeks to create a zero-down loan program for teachers, law enforcement officers, and first responders.
The Homes for Every Local Protector, Educator, and Responder Act — known as the HELPER Act of 2021 — was drafted to address the financial hurdles educators and first responders face while trying to find affordable housing in the communities they serve.
The legislation passed through the House Committee on Financial Services on May 13 and will require votes in the House and Senate before being signed into law.
What's in this Article?
What’s in the HELPER Act?
The HELPER Act is a bill that would amend the National Housing Act to establish a mortgage program through the Federal Housing Authority (FHA) specifically for first responders, law enforcement, and educators.
The program would be similar to a VA loan, in that it requires zero down payment and no monthly insurance premiums. However, it does require an upfront mortgage insurance payment (MIP) of 3.6% of the loan amount — although this figure may be subject to change.
The loan would be one-time use only and applied to specific purposes:
- To purchase, construct, or repair a single-family residence, including a condo
- To purchase a manufactured home or a manufactured home and a lot
- The property must be the primary residence for the life of the loan
As an FHA product, this mortgage would likely be available at most mainstream lenders.
Who would qualify for this loan?
As the title suggests, this program is designed for law enforcement, educators, and first responders. However it does mention specific titles and eligibility requirements.
Borrowers must employed full-time:
- By a federal, state, or local government law enforcement agency;
- and sworn to uphold the law or authorized to supervise sentenced criminal offenders (presumably including correction facility staff)
- As a firefighter, paramedic, or emergency medical technician (EMT) by a unit of federal, state, or local government
- As a teacher at an accredited K-12 public or private school
The borrowers must be employed for four or more consecutive years or released from employment due to a work-related disability. They must also be in good standing with the employer (not on probation or under investigation) and intend to continue their service.
Has the HELPER Act passed?
The HELPER Act passed through the House Committee on Financial Services and was introduced to the House of Representatives on May 13. As of November 30, the bill had 35 cosponsors in the House — 22 Democrats and 13 Republicans.
In October, the HELPER Act was introduced to the Senate Committee on Banking, Housing, and Urban Affairs by Sen. Marco Rubio (R-FL) and cosponsor Sen. Jon Ossoff (D-GA). Senator Raphael Warnock (D-GA) was added as a cosponsor on November 2.
The HELPER Act still needs to be voted on my both chambers of congress before it can be signed into law.
Origins of the HELPER Act
Samuel P. Royer, a Marine Corps veteran and the national director for Heroes First Home Loans, birthed the idea for the HELPER Act. Royer said the idea is that first responders deserve the same access to affordable housing benefits that he has as a veteran.
The proposal was introduced to the Financial Services committee by Representatives John Rutherford (R-FL), Al Lawson (D-FL), Bonnie Watson Coleman (D-NJ), and John Katko (R-NY) and now features bipartisan support from 12 cosponsors.
While it has a long way to go before becoming law, early bipartisan support is a hopeful sign as rising home prices continue to squeeze homebuyers out of the market.
*Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.
Fairway is not affiliated with any government agencies. These materials are not from the VA, HUD, FHA, USDA, or RD, and were not approved by a government agency.
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.