Ready to increase loan volume? The market could soon be awash in red, white and blue as millions of new, civic-minded borrowers await the expected passage of a key piece of federal legislation.
What It Means
The Homes for Every Local Protector, Educator, and Responder (HELPER) Act was designed to help public servants reach their goals of home ownership in the communities they serve by eliminating barriers to affordability.
This legislation expands the National Housing Act, the law that first established the Federal Housing Administration (FHA) in 1934. It creates a one-time-use, FHA-sponsored home loan program for law enforcement officers, firefighters, Emergency Medical Technicians (EMT), paramedics, and pre-K through 12 teachers who are first-time homebuyers.
Those eligible would receive 100% Loan-To-Value (LTV) financing (no down payment, excluding closing costs) with no monthly Mortgage Insurance Premium (MIP). Buyers will still be responsible for FHA’s upfront MIP at an increased rate of at least 3%, in accordance with adjustments made by the Secretary of the Treasury.
More than five million Americans work in HELPER Act professions, according to 2023 data from the Bureau of Labor Statistics, Bureau of Justice Statistics, and National Center for Education Statistics. That equates to a lot of potential new borrowers.
The HELPER Act was originally introduced in May 2021 with bipartisan support, but expired in the last Congress. It was reintroduced to the 118th Congress in May 2023, as H.B. 3170 by U.S. Reps. Bonnie Watson Coleman (NJ-12) and John Rutherford (FL-05), and S. 1514 by Sen. Marco Rubio (R-FL).
“This is a program that uses the FHA’s Mortgage Insurance Fund to help create more homeowners in our community’s heroes,” said Dan Green, CEO of HomeBuyer.com, which exclusively serves first-time buyers.
“In the last Congress there were about a dozen bills targeting [first-time homebuyers] and they all reached various forms of discussion. When we look at the HELPER Act in particular, one thing that makes it stand out from other bills that have not come out of Congress is the large number of cosponsors,” Green continued. “It is a bipartisan bill; it has a lot of momentum; it’s adding more co-sponsors, and it’s a common-sense program. This may not be the only bill for [first-time homebuyers] that makes it through Congress, but we think this is going to be the first one to get a vote and very likely — the first one to pass.”
The program is set up to essentially be self-funded without the need for taxpayer dollars — perhaps another reason it has garnered widespread support.
The main differences between the original 2021 bill and the HELPER Act of 2023 is the addition of tribal governments to the eligible employer list, making gaps in full-time employment acceptable and most significantly, limiting loan eligibility to FTHB only.
LOs might educate themselves on the program requirements and affordances, especially since first-time homebuyers comprise a large portion of the home lending pie.
“This is a program that uses the FHA’s Mortgage Insurance Fund to help create more homeowners in our community’s heroes.”
Dan Green, CEO of HomeBuyer.com
“It’s a specific niche; they come with their own set of questions and have different needs than a repeat buyer or investor,” Green pointed out. “There are so many ways that LOs can be helpful. The best way is to be educated and to show some empathy for the unique challenges a lot of [first-time homebuyers] are having at this time.”
Gratitude Without Gratuities
The Florida Association of Mortgage Professionals (FAMP) has been behind the HELPER Act since it was first introduced.
FAMP Chairman of Government Affairs Mike Pearson is following the progress of this and other state and federal bills closely. He’s hopeful about the HELPER Act moving forward — not only due to its growing support but due to the fact that the necessary framework is already in place among federal statutes. HUD’s Good Neighbor Next Door (GNND) program also serves borrowers in these groups, although it is exclusive to HUD-owned properties.
One commonality is that both programs serve borrowers who tend to earn more heroic accolades than they do good salaries.
“As a husband of an educator, I can tell you the work they do versus the salary they are paid is sometimes out of balance,” Pearson said. “Working on a public salary in high-income areas can make it difficult to afford financing in those markets. We’ve talked to firefighters who have to drive into the communities they serve from hundreds of miles away from where they live. That’s very unfortunate. Eliminating some of the barriers to entry — the down payment and monthly mortgage insurance premium — can assist to get more first responders into the neighborhoods they serve.”
President Nathaniel Bittman says FAMP’s 1500-plus active members have concerns about affordable housing and rising insurance costs, both of which this proposal addresses.
“We have a surmounting number of people moving into the state of Florida,” Bittman explained. “We are facing some challenges with infrastructure and density so it makes it very difficult to commute into denser markets, and housing has become a challenge in terms of affordability. A program like this helps to protect our environment, protect our streets and helps with the commute some of our professional servicers need to get within close proximity of their service areas.”
More Happy Homebuyers
Giving potential borrowers an incentive to invest in their future is always a good move.
“I like to read about people who didn’t think they could buy a home and found the resources available to get past their obstacles,” Green said. “There is a lot of inertia that keeps people out of homeownership … it has to be a purposeful move to go and buy a home.”
The HELPER Act could be the catalyst for homebuyer-hopefuls to cement their decision in concrete and hop on the road to closing on their first home.
HomeBuyer.com is already putting resources on its site to direct folks to pertinent information about the bill, according to Green.
“We lead with information and content as a lender,” he said.
“This is a necessity; our community needs it,” Bittman said. “It doesn’t matter which side of the aisle you sit on — this has a lot of bipartisan support.”
This article was originally published in the NMP Magazine December 2023 issue.