NEW BILL: 0% Down and No PMI Mortgage for First Responders & Teachers

Certified Mortgage Advisor
NMLS 1701021
May 27, 2021

VA like home buying powers

There is a new bipartisan bill that would give teachers and first responders, VA-like home buying powers. So now, we're going to cover some of the details that we know about it so far and a really big downside that I want to make sure that you are aware of.

Let's build a home buying community

So I bring you information that helps you learn to calmly buy a home, please read through so we can build the best home buying community together.

H.E.L.P.E.R. Bill

So this bill is called The Homes for Every Local Protector, Educator, and Responder act. See, it turns into helper as an acronym. Its goal is to address the issues that many first responders and educators can't actually achieve homeownership in the same communities that they serve.

H.E.L.P.E.R.'s Goal

This Bill's goal is basically to model after the VA home loan program to help first responders and teachers be able to get into homeownership in the communities where they work.

Program under FHA

So it would be a program under FHA. It helps first responders, education educators who have faithfully served their communities and, and they, they use the word faithfully because what we're seeing right now, at least that of what's been discussed is that likely it will need you'll need to be working in that line of work for at least four years to be able to qualify them.

Modeled it after the VA loan program

This is model with VA loan program which is right now only reserved for veterans it's issued by the Veterans Administration. It's a fantastic loan program.

3.6% Mortgage Insurance Premium

So this program would be 0% down, no monthly mortgage insurance, but here's the kicker. They are looking at charging a 3.6% upfront mortgage insurance premium based on the loan amount. So on a $300,000 loan, for instance, that's an additional $10,800 added to the balance upfront, right? So instead of getting a $300,000 loan, you're getting a $310,800 loan. So if you want to go sell the home, that does have to be paid back. You took out a loan for that upfront cost there, and it's unclear if the rate will be lower.

Almost VA but under FHA

Usually, if we're looking at FHA loans, VA loans, USDA loans, they tend to have a lower rate than a conventional loan would. That's normally because of the upfront mortgage insurance premium. So it's unclear since this is going to be under FHA and it's supposed to be VA, like if it's going to have a lower rate, who knows.

Just a bill, not a yet a law

So it's important to remember that this is just a bill. It still has to get introduced, discussed formalized passed by the house Senate signed off by the presidency.

When is this available?

So it'll be interesting to see how this actually gets put into Congress if it even passes the house and moves on to the Senate. Then if it gets signed into law to actually become a real program.

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