Last Updated on July 20, 2022 by Luke Feldbrugge
If you are a firefighter first time home buyer, there is help out there. It’s not obvious and it can take a while to find the help that’s right for your situation. Ideally you will be able to find a program that’s easy to understand, easy to apply for, and easy to qualify for. Let’s see if we can help with your home search.
Since there aren’t many government firefighter first time home buyer programs, you will need to broaden your search a bit. The government wants to make homes affordable for the first-time homebuyer, and these are the ones you should investigate.
Good Neighbor Next Door
The best known and most recognized government program for firefighter home buying (and other heroes including first responders, healthcare professionals, teachers, military personnel, veterans, police officers and EMS workers) is Good Neighbor Next Door. This program sells HUD (U.S. Department of Housing and Urban Development) homes in revitalization areas for 50% off the purchase price. You read that right–half off! Because it’s such an important program for a firefighter first time home buyer, we have a whole blog dedicated to the Good Neighbor Next Door program.
So what’s the catch? The homes in the GNND program are in revitalization areas as identified by the government agency. That means they are in areas where:
- Household income is lower than average.
- Homeownership rate is lower than the surrounding areas.
- FHA-insured mortgage foreclosure activity is higher than surrounding areas.
These neighborhoods need economic and community development, and one way to do that is make foreclosed properties available to heroes at a deep discount. The understanding is that, if you get one of these homes, you will agree to live there as your primary residence for at least three years.
How it Works for a Firefighter First Time Home Buyer
As a firefighter first time home buyer, two things should happen right away if you want to participate in the Good Neighbor Next Door program.
- Get a real estate agent who can make offers on your behalf for homes you are interested in. Things move pretty fast in this market, so once you see something, you want to be able to bid on it quickly.
- Get familiar with the website. The HUD Home Store is a search engine that helps you find HUD properties.
If your primary goal is to find an affordable home, this is a great program.
Homes for Heroes real estate specialists can also save you money when you work with them to close on a home. The average savings is $3,000 when you close on a home with a Homes for Heroes real estate specialist. Sign up today to speak with our local specialist in your area. There is no obligation and they would be honored to answer you questions.
The Good Neighbor homes are foreclosures, so some of them require some renovations and fixes. Good news: there is financing for that too. That help comes in the form of 203(k) Rehab Mortgage Insurance and it allows you to finance the purchase of a home plus any rehabilitation costs and fold them together into one mortgage. There is a Limited 203(k) for homes that require less renovation and the full 203(k) for more substantial fixer upper projects.
This is probably your first mortgage loan, so it’s good to learn about FHA loans: mortgages insured by the Federal Housing Agency and only require a 3.5% down payment. The FHA doesn’t actually issue the loan–they come from traditional banks or an approved lender – but they do approve and insure it. That insurance gives a loan officer the confidence to lower the down payment, and that is helpful thing for a firefighter first time home buyer.
The FHA eligibility requirements include:
- Your credit score– a FHA loan is somewhat unique because they are available to home buyers who have credit scores as low as 500. You only get the 3.5% down payment if your credit score is above 580, but you can still qualify at 500 if you have a 10% down payment.
- Proof of steady employment
- History of honoring debts
- Proof of sufficient income
FHA does require that you have private mortgage insurance when it comes to finalizing the loan.
If you have been in the military previous to starting your firefighting career, Veterans Affairs loans are a popular option among special loan programs. They are available for active service members, veterans, and eligible surviving spouses. Similar to FHA, the VA insures the loans while private lenders give you the actual money. This insurance has a list of formidable benefits for eligible borrowers:
- No down payment
- Low interest rate
- Limited closing costs
- No private mortgage insurance
- Lifetime benefit (you can use this multiple times)
In terms of first home buying, the benefits of VA loans are difficult to beat.
Since the majority of firefighters are volunteers (67%) and located in rural counties, the USDA loans might be of particular interest. These loans are designed to stimulate growth in rural areas, where a lot of the fire departments are strictly volunteer. Rural is broadly defined by the USDA (including about 97% of the U.S. map), so these mortgages are worth checking out.
Benefits of these loans include:
- No down payment
- Reduced mortgage insurance
- Below-market mortgage rates
Volunteer firefighters in rural areas should definitely check out the USDA loans.
More Savings with Homes for Heroes
In terms of programs specific to a firefighter first time home buyer, Homes for Heroes answers the call. We have been working for 20 years to help firefighters find new homes or sell their current homes (or refinance). With first time homebuyers, our real estate specialists can walk you through the process to answer all your questions and take some of the stress out of the journey. Our affiliate real estate agents work with heroes like you because they specifically want to say thank you for your service.
Homes for Heroes can help firefighter first time home buyers in at least three ways.
- We help you find a real estate professional.
- We help you find mortgage brokers.
- We pay you Hero Rewards® when you close on your house.
That third one is important when it’s your first home, because the money can help you with actual cash after closing on your house. Some of our heroes use it for appliances, repairs, renovations, or any number of projects that emerge once you buy your first house. On average, our heroes save $3,000 when using our real estate, mortgage and title specialists.
There’s no catch, no fees, no extra paperwork; the process is exactly the same as a normal real estate transaction. You just receive excellent care from our specialists and receive Hero Rewards® savings at the end. Your hero status doesn’t end when you retire from firefighting. Eligible firefighters include both current and former firefighters; full time or volunteers. We also offer these services and savings to any EMS professional who is part of a fire department rescue team.
Jumping into the real estate market shouldn’t be intimidating (we know you have jumped into situations that are far worse). Our job, at Homes for Heroes, is to make that first journey to a new home as easy and painless as possible. We do that with a team of talented real estate specialists and mortgage lenders who have committed to helping the heroes of our communities. For more information and to talk to a specialist with no obligation, sign up today.