New mortgage proposal for teachers and first responders


Buying a home is not an easy thing to do. To achieve this goal, you need to save money for a down payment on your home, and for some workers, it’s a difficult thing to do. But there is a new proposal in the works that could waive this requirement for some mortgage applicants. Here’s what you need to know.

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A lifeline for teachers and first responders

A new proposal known as the HELPER Law was recently introduced in the House of Representatives. Its goal is to create a mortgage program specifically for public service workers such as police, firefighters, paramedics and teachers.

Short for “Homes for Every Local Protector, Educator, and Responder,” the law would allow qualified buyers to apply for a HELPER loan. This loan would come with no down payment requirement and no current monthly mortgage insurance. HELPER loans would, however, carry an initial mortgage premium of 3.6% of the total amount of the loan taken out.

Now, there is already a mortgage product that allows buyers to buy a home without a down payment – VA loans. But VA loans are only available to serving US servicemen, military veterans, or surviving spouses of military veterans. Teachers and first responders are not eligible.

There are also FHA loans, which allow buyers to purchase a home with as little as 3.5% down. But for those who really can’t make a down payment, even that lower threshold can be a hindrance. The HELPER Act could solve this problem, while also allowing workers who serve their community to begin to reap the rewards of owning a home.

When could the HELPER law pass?

The HELPER Act was first introduced in mid-May and was submitted the same day to the House Committee on Financial Services. But it has not yet been scheduled for review. Once that happens, it can go through a full House vote before moving on to the Senate, where it will need approval to come true.

The HELPER law is not the only provision in preparation to make home ownership more accessible. President Biden also offered a first-home purchase credit worth up to $ 15,000. This money can be used towards the down payment of a house, so a lack of funds up front should not be a barrier to homeownership.

If the HELPER Act passes, it could help many Americans buy their own homes, especially in today’s tough housing market. Home prices have risen dramatically nationally due to low mortgage rates and limited inventory, both of which have caused increased demand from buyers. As such, coming up with a large down payment is a more difficult task now than it would be in a normal housing market. And since we don’t know when house prices will start to drop to more affordable levels, the HELPER law could come just at the right time.

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