Do Firefighters Qualify for a VA Loan?

Being a community hero can be stressful enough. Add on buying a home and it may feel like you’re completely alone. Thankfully, there are a lot of programs available for our local firefighters as a way of saying thank you.

We know how hard being a firefighter can be, and we know you do important work, which is why we want to provide you with the best possible loans for your home. As first responders, firefighters are important to keeping our local communities safe. You risk your lives and have to make tough calls in high-stress situations.

Fortunately, there are programs available for firefighters and those who have served in the Armed Forces when purchasing homes. VA is one of those programs. There are also programs available to firefighters who have not served in the Armed Forces through various other federal, state, and local programs.

In this article, we’ll go through VA loan eligibility and requirements and discuss other programs available to firefighters. If you have any questions on whether or not you qualify for one program or another, be sure to contact your local lender to discuss your options.

Are firefighters eligible for VA loans?

Depending on prior service, some firefighters may be eligible for VA loans. The Veterans Administration does have a loan system in place for those that qualify. Many first responders also serve or have served in the Armed Forces in one way or another, and they can qualify for loans through the VA.

Who is eligible for a VA loan?

VA loans are available to all branches of the Armed Forces. To apply, the basic document needed is a Certificate of Eligibility (COE). Depending on your service and/or status, there may be other required forms to present. The VA does not set a specific minimum credit score to qualify for the loan, although a private lender who services VA loans may have other basic requirements. It is a good idea to check with your lenders to know about their specific requirements.

• Armed Forces: VA loans are available to any United States Armed Forces member, no matter the branch.
• National Guard and Reserves: Those who serve in the National Guard or Reserves are eligible for VA loans. This is also open to any branch. So no matter where you serve, you can qualify for a VA loan.
• Active Duty: Active duty members are those who are currently serving in the military in some capacity. They can be either in any branch of the Armed Forces, the National Guard, or the
• Reserves. Active duty members of the military qualify for a VA loan.
• Retired Veterans: For those that have served previously, you also qualify for a VA loan. And if you served in the National Guard or the Reserves and were never activated, you are still qualified. Be sure to check for your branch and situation as to what forms you may need to provide.
• Spouses: For those who lost their spouse in the line of duty or to a service-related disability can qualify for a VA loan. You will have to present various forms of your spouse’s service, and you can request them through the VA.

VA loan requirements

There are some basic requirements of service to qualify for a VA loan. Again, while the VA sets no minimum credit score or income, some private lenders may have their own. It is a good idea to check with them to see if you qualify through their programs.

You are eligible for a VA loan by meeting one or more of the following requirements:

• You have/had served 90 consecutive days of active service during wartime
• You have/had served 181 days of active service during peacetime
• You have/had six years of service in the National Guard or Reserves
• You are/were a spouse of a service member who has died in the line of duty, or as a result of a service-related disability

These are the basic requirements for VA loan eligibility. And you only need to meet one of those criteria to qualify. There is no requirement of branch or sector of service, nor any requirement of active or retired status.

Other home loan programs for firefighters

For those of you that are firefighters, but haven’t or don’t serve in the Armed Forces, don’t worry! There are other home loan programs available for firefighters that don’t require military service.

Here is a brief list of those types of programs. As always, check with your lender to see if you qualify further than the basic requirements.

1. HUD Good Neighbor Next Door

Through the United States Department of the Housing and Urban Development (HUD), firefighters can receive literally 50% off their homes’ listing price. And if it sounds too good to be true, there are some requirements that may be too restrictive for you or your situation.

To qualify for HUD Good Neighbor Next Door Program, you must:

• Be a paid firefighter (volunteer firefighters are not eligible)
• Buy in a “revitalization” area that is designated by HUD
• Select a home from HUD’s listings, which often comprise of foreclosures
• Live in the house for three years

While these may seem restrictive to some, the money saved may be worth it for others. You could save that money for a newer home down the line, and three years may not mean much in terms of commitment.

2. Hero Home Programs™

Hero Home programs™ help local heroes get into homes in their communities. These are not just for firefighters but also for all types of first responders, educators, and healthcare professionals. On average, you could save a couple of thousand dollars when using programs like these. 

How does that work? Hero Home programs use their own team of realtors, mortgage providers, inspectors, appraisers, and title specialists. They offer discounts to the program for using their services, and those savings roll right on to you. And it works for also selling a home as well, with discounts on commission fees and closing costs.

3. Firefighters Credit Unions

There are more than one hundred credit unions that are specifically dedicated to serving firefighters. These credit unions serve both career and volunteer firefighters and offer special rates and mortgage options. There is also a high probability you could tie in one of these mortgages with a down payment assistance loan.

4. Down Payment Assistance Programs

Down payment assistance (DPA) programs offer a variety of ways to help you cover the cost of a down payment. This includes grants, interest-free loans, and low-interest loans. Each program varies by state and has its own eligibility requirements. It is also a good idea to make sure that your lending institution is on board with DPA financing options.

5. Local Firefighter Mortgage Programs

Many states, including separate cities and counties, run special programs for homeownership for their local heroes. These programs may include preferential rates and assistance and programs for first-time homebuyers. These programs vary by state, and each program has its own requirements and benefits. It’s a good idea to do some research to find the best one for your situation.

So, where do you sign?

Firefighters may qualify for a VA loan if they have prior or current service. And for those that stay close to home through local service, there are some options available. Home buying doesn’t have to be stressful, and this is our way of giving back to the people that have given us so much.

If you are interested in any of the programs we mentioned, reach out to Hero Home Programs™ to learn more on how to apply. Worry less about the money, and focus on finding the home of your dreams in the community you are dedicated to serving.

Thank you for your service.

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Hero Home Programs: Your Reliable Home Buyer Assistance

Home buying is a beast of a process, and sometimes it can be hard to find assistance programs that actually care. If you are a community hero, it can feel like there is no one looking out for you like you do for others. Thankfully, there is. The Hero Home Programs™ is here to serve you as our way of saying thank you for everything you do for your community. And that includes finding you the right house.

If you are currently or were formerly an educator, first responder, military, or healthcare worker, you can get the home of your dreams. Hero Home Programs™ is here to help you the way that you help your community. Our trusted team can help you find more than just a house. We want you to find a home while not spending anything more than you should. In fact, we can actually save you money!

So, what is the Hero Home Programs™? And how do I know if I qualify? This article will discuss everything you need to know about what we do, so you know what to expect. To get the best recommendations for your situation and your community, reach out to the nearest agent to you to get started!

What does Hero Home Programs™ do?

The hero home programs are designed to help community heroes buy, sell, or even refinance homes. With Hero Home Programs™, we provide special rebates, offers, and loan programs as a way to thank local heroes.

Who are these heroes that we are dedicated to serve? It’s the people you see every day in our communities that help to make our world safer, healthier, and more impactful. They are:

• Educators. We know how much work teachers, paraprofessionals, administration, and staff do to help our community through all stages of life. Pre-K through post-secondary educators are one of the heroes that we serve. Teaching is a work of heart, and we want to give back to those who are propelling the new generation forward.
• First responders. Whether you are an EMT, paramedic, firefighter, or police, we consider all first responders heroes. And our program is designed to help whether they are paid, volunteer, or retired.
• Healthcare workers. We know the importance of our healthcare force, which is why we want to give back. Healthcare workers span the whole range from CNAs to MDs to specialists. Whatever your healthcare profession, we want to help you find the home of your dreams.
• Military. No matter what branch you serve, we are dedicated to serving you. If you are an active, reserve, or retired member of the Armed Forces, you qualify for the Home Heroes program. Thank you for your service.
• And it even extends to those who currently rent, no matter if you’re a hero or not. Hero Home Programs™ wants to make your dream of homeownership a reality and help you find the right assistance and plan to get out of a lease and into your home.

What are the benefits of Hero Home Programs™?

When it comes to buying a home, we want to be with you every step of the way. If you choose to work with us, we strive to make the process as easy and painless as possible for you by finding you the best grants, loans, and offers available.

We have first-time homebuyer programs to help you start on the path to homeownership. And if this isn’t your first home, that’s just fine too! We have homebuying assistance programs to get you into your new dream home and help you sell your current place.

How much does Hero Home Programs™ cost?

There is no upfront cost for the Hero Home Programs. So, how do we make our money? You’ll pay the people you work with locally, so the money stays in your community and keeps the program moving to help the next hero. We are here to help you. In order to receive the benefits of this program, you have to work with one of our trusted realtors and loan experts who are dedicated to helping you.

There are no hidden fees. That means no fine print, no red tape, and no fee to apply. Simply fill out an application with your name, profession, and some way to contact you. No extras or sneaky fees. You know what you’ll owe to your team upfront, so you can decide the best option for your budget.

Costs vary depending on location. In part, this is due to the fact that not every local housing market is the same as the next, so the percentage values change as the amount changes. But different states and local governments have different grants, rebates, and programs as a way to further assist the community.

How much can you save with Hero Home Programs™?

The amount you save depends on the costs associated with the house. The barebone facts remain that, on average, our heroes can save thousands of dollars on their homes. But here’s where you can expect to save some money in the process of buying a home:

1. Loans and mortgages. You can save on loan origination fees and lock in at a good interest rate for your mortgage. We can even find you the best down payment plans available to you.
2. Closing and commissions. We help to keep more money in your pocket, which is why our agents work to save you money at closing and a low gross commission percentage that our realtors take.
3. Appraisals and inspections. If you want to refinance, by working with our chosen team for appraisals, inspections, titles, etc., you can receive discounts and rebates on the cost while still receiving the best in the business.

And so much more! 

Our goal is to help you save money where it matters, and not just in one area. We can help you save money at every step of the home buying process, keeping your hard-earned money where it belongs -- you.

Mortgage guidelines

There are other ways to reduce your mortgage. This may look familiar, as these are some common rules and guidelines. While we are here to help you no matter what your situation, you can maximize the benefits you receive if you have some other helpful factors taken care of.

1. Credit scores. Having a good credit score can help the lending institution find the best loan option for you. When you have a higher credit score, you are more appealing as a candidate for a loan because you are trusted and able to pay back what you borrow.
2. Down payment. The more money you have to put down, the better. And we can help with that if you are currently saving for a down payment. Some down payment assistance programs are available in conjunction with what we can save for you. Be sure to talk with our lender to find the best program for you.
3. Purchase vs. refinance. There is a big difference if you are looking to purchase a new home or refinance your current one. Either way, we can help. Hero Home Programs™ offers you assistance to find the best new home or lower your mortgage on your current one.
4. First-time buyers. If you are a first-time homebuyer, there is a lot of government assistance available to you. We can help you find those assistance programs on top of what you save with us. We want your dreams of homeownership to come true, and we are committed to making that happen.

So whatever your situation, we are here to help. But there are some ways to help yourself by taking care of your current financial situation. By making sure that you stay within your budget and putting more money down, and have a good credit score, you can save yourself money over the long term. It’s a win-win for you!

Signing up

Whether you are a first-time homebuyer or a seasoned home buying veteran, Hero Home Programs™ wants to help you take the next step. We are dedicated to helping you the way you help our communities every day. And we want to keep our heroes close, so that is why we are committed to finding the right home for you.

If you’re interested and wonder if you qualify, reach out to us. Remember, there’s no fee to apply. It is as simple as filling out your name, job, and contact information. The rest? Leave that to us.

The following blog post Hero Home Programs: Your Reliable Home Buyer Assistance is courtesy of https://herohomeprograms.com

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How to Get Around Private Mortgage Insurance (PMI)?

If you make less than a 20% down payment on a home loan, you may have to take out Private Mortgage Insurance before being approved for the loan. Private Mortgage Insurance (PMI) is conditional protection that benefits lending institutions from the risk of defaulting on the loan or foreclosure of a house. It adds an extra expense to your monthly bills and can be very inconvenient if your financial situation improves.

However, not all hope is lost. Under the Homeowners Protection Act (1998), there is a laid-out process of canceling PMI as long as certain requirements are met, making it easier for borrowers (NCUA). But there are other ways to get around PMI.

This article helps you understand what PMI is and the types, along with how PMI is calculated. We will also discuss the variety of ways you can avoid paying PMI, or if that isn’t quite possible yet, ways to reduce the payment.

Understanding Private Mortgage Insurance

Private Mortgage Insurance (PMI) is a type of coverage that protects lenders if you are at-risk to default on your mortgage loan or liable for foreclosure. PMI is generally only required if the down payment is less than 20% of the loan value. How much you end up paying depends on your credit score and how much you put down. However, it’s not applicable to government-backed FHA and VA loans with low to zero down payments.

There are two types of PMI: borrower-paid and lender-paid. Opting for a borrower-paid approach means that you as the borrower will pay the PMI. If you want, you can go the lender-paid way--the lending institution will pay the PMI, but will roll over the cost of doing so into the interest rate for the life of the loan, which means you might end up paying more over time.

How is PMI calculated?

PMI is calculated based on how much of a down payment you made and your credit score. Your payment will be calculated on those factors initially. Every year, the PMI is recalculated based on how much remains on the loan. Which is a silver lining of sorts, knowing that the amount you pay will decrease over time.

Can you reduce or stop paying PMI?

Another way to reduce or stop PMI is when the loan-to-value (LTV) ratio is 80% or lower and the loan started on or after July 29, 1999 (when the Homeowners Protection Act began). However, the market value of your home may have fluctuated, so the lender may require a brokerage price opinion, which may disqualify you if your LTV is not 80% (source).

Once you, as the borrower, have enough equity built up, the PMI can be removed. If you want to refinance your loan, it can decrease or entirely eliminate the PMI coverage. This refinancing usually requires an appraisal, which determines the value of your home. Then you take that new market value and essentially create a new loan under those conditions. However, your credit score may still be a limitation on your ability to eliminate PMI.

Ways to avoid paying PMI

There are various ways you can get around having to pay for PMI. Some are easier to do than others. However, the important thing to remember is that some options may take time. You can expect to pay PMI for a good chunk of time before you can get out of it.

1. Make a 20% down payment.

For starters, the fastest and easiest way to avoid paying for PMI is to not have any, to begin with. If you put up 20% of the down payment, then there is no need to worry about paying for PMI. If you can’t make that percentage point, you can look into down payments assistance programs to see if you qualify, especially if you are a first-time homeowner.

2. Get a VA or FHA loan.

Making a down payment of 20% may not always be feasible, no matter how responsible you are fiscally. However, there are some down payment assistance programs through VA or FHA. These government agencies can help cover the costs of down payments, and some may not even be required to pay back. It is a good idea to speak to your lender to determine if you qualify for these monies.

3. Piggyback loans

Piggyback loans, or second mortgages, help decrease the LTV ratio. The second mortgage would cover the remainder of the loan above 80%. For example, you could do your first mortgage at 80%, the second mortgage to cover 10% and make a 10% down payment. A piggyback loan may seem counterproductive, but a second mortgage can be easier to pay off and eliminate than PMI.

4. Pay down current mortgage.

If there is no penalty for doing so, making higher payments or prepayments on your mortgage can be a quick way to get out of PMI. In terms of LTV ratio, this method decreases the loan compared to the value, making it easier to reach that 80% benchmark. The faster you can get your loan paid off, the faster you can get out of the PMI.

How not to pay PMI

Private Mortgage Insurance (PMI) serves no benefit to the buyer and can be a pain. Thankfully, the Homeowners Protection Act has made the process a little easier in terms of getting out of paying PMI for the entire duration of the loan. But there are some ways you can get out of paying for PMI in the first place -- or at least reduce your payments. The magic numbers in most cases are 80% LTV and 20% down payment. If you can get one of these objectives, then your chances of paying for PMI coverage indefinitely will decrease.

If you’re ready to take the next step on your home buying journey and still have questions, reach out to the home buying specialists at Hero Home Programs. They work with local vendors to save you thousands of dollars on your home purchase and can even help you find lenders, insurance, inspectors, and more.

The blog post How to Get Around Private Mortgage Insurance (PMI)? is courtesy of https://herohomeprograms.com

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How to Buy House From A Family Member?

People buy and sell homes on a daily basis — and sometimes to and from their own family members. There are a variety of reasons and different ways that family members can ‘gift’ or sell a house. Whether it be a gift of equity, covering the down payment, or a discounted price, there are many ways to sell or buy a home within a family. 

You may be wondering the steps it takes to sell or buy a house from a relative. Whether it is you doing the buying or selling, or if you’re doing research for someone else’s, this article talks about just that. We will discuss the different types of transactions, the steps, and then weigh the pros and cons for you.

Arm’s Length Transaction vs. Non-Arm’s Length Transaction

When it comes to real estate, there are two categories of transactions — arm’s length transactions and non-arm’s length transactions. And it all comes down to the relationship between the buyer and the seller.

An arm’s length transaction is your typical real estate transaction. There is no professional or personal relationship between the two parties and each side acts with their own best interest in mind. Person A has a house to sell and Person B has a house to buy. Deal closed.

A non-arm’s length transaction is when the buyer and the seller have a personal relationship. This could mean friends, family, business partners, etc. Personal and self-interest are not always the goal in these transactions. However, it almost seems too good to be true, right?

While a non-arm’s length transaction is legal, there is a lot both parties have to do in order to get to the final goal of buying and selling. This is because there is a lot of fraud concerning these transactions, which could mean tanking the local housing market, inflating the price to cheat the seller out of money, orother sortst of misrepresentation. Lenders have to abide by the government regulations and guidelines to protect themselves and the parties involved. Some lending institutions may have their own rules regarding non-arm’s length transactions, so be sure to check with your institution before continuing through the process.

Steps on buying a house from family members

There are many steps to buying a house in general. And while you may not have to go house hunting, there are still some steps that you need to do before the sale is all said and done. Here are the steps to buying a house from a family member:

1. Get pre-approved.

There are some conditions to keep in mind when it comes to the mortgage aspect of it all. For sellers, you want to make sure that the buyer is approved for the mortgage. For buyers, it is good to know if the seller is current on their mortgage payments. If they are not, it might delay the approval for yours.

2. Decide the purchase price.

When it comes time to crunch the numbers, there aremanyf ways that the price can change. The firstt is to determine the fair market value, usually done by an appraiser hired by the seller. Next is to look at options for lowering the price. This is where a gift of equity, cash gift, or covering a down payment or closing costs come into play. Be sure to check with a tax expert first. All of the mentioned gift options have implications on the tax returns of the buyer and seller.

3. Title history and legal representation

As a buyer, you may want to hire a title company. This is not to insulate that your relative is untrustworthy, but it is a good idea to look into the title. That way, you can find out if there are any liens on the house or anyone else claiming to the title.
Hiring an attorney is also not a bad idea. They can help both parties avoid mistakes, write and notarize contracts, along with making sure there is no fraud being committed on either side.

4. Complete purchase agreement

A purchase agreement is a written and legally binding agreement to buy the home for the price that has been agreed on. It can also detail the terms of the sale, gifts, or covered costs made by the seller to the buyer.

5. Underwriting and closing

After all of that is done, then the loan gets processed by the lending agency. This is a good idea to avoid large purchases and activities that will poke holes in the credit score. This helps to get a better interest rate. Upon approval, the closing is done and the house now belongs to the buyer!

Pros and cons of buying a house from a family member

There are a few things to consider before pursuing this type of transaction. A non-arm’s length transaction does have its benefits, but it also has its downfalls. Here are the pros and cons.

Advantages

It boils down to this — time and convenience. When buying a home from a family member (or selling, in some cases), there is a lot of energy saved in the process because a lot of the stress is non-existent.

• Cheaper closing costs or down payment: There is no real estate agent involved, which can save the seller commission fees. For the buyer, gifts of equity or cash gifts can be put towards a down payment. Everyone wins!
• No hunting: The buyer does not have to find a house, which can be one of the most stressful steps in home buying. And it helps the seller too! Because the seller doesn't have to hunt for a buyer and can go into a new place with no contingency.
• Stays in the family: For some people, the land and the home are treasured heirlooms. Or, if the house is in a historical section of town, you can be assured that it will be taken care of. Sometimes it is nice to know that the place you call home is going to be loved as you loved it.
• Flexibility: There is some flexibility with moving, which can be nice. It allows both parties to pack and gives the seller time to find a new place. Not to mention, it is way less of a hassle to try to meet during a certain time frame on a weekday.

Disadvantages

There are some disadvantages as well, which is the case with every type of agreement. When it comes to family, there can be a lot of personal life drama that can ruin a deal. Knowing the pitfalls of a non-arm’s length transaction is important, and perhaps you can avoid them.

• More hoops and restrictions: There are more hoops to jump through and more restrictions, and these can vary by lending institution and situation. But there is often a bit more legwork done by the buyer and seller than is usually done by the real estate agent.
• Tax implications: Gifts of equity or other large monetary gifts have to be claimed on tax returns. And sometimes, even the buyer has to claim it as well. Be sure to talk to a tax expert to be sure all things are accounted for.
• Strife: Large and stressful processes like moving can make or break a family. Not to mention, some other family members may feel strongly about the transaction and will put in their two cents. It is good to set boundaries beforehand. And if you think this process might further damage an already fragile relationship, then it may be wise not to go through with it.
• Not a done deal: Sometimes, the buyer may have to back out of the deal, or the seller has to increase the price. These things are very real in the traditional real estate process, and non-arm’s length transactions are not immune.

Moving in?

Now you know all that goes into buying a house from a family member. If it sounds like the process is a good fit for your situation, then all the better! But if there are some hesitations yet, be sure to communicate that with your relatives. The process can be very smooth compared to normal transactions, but this can also be a more emotional process. In the end, it is best to be patient with everyone and work together to achieve the desired result.

Are you ready to start the home buying journey? Reach out to the home buying specialists at Hero Home Programs. They have been helping homebuyers save thousands on their home purchase and look forward to serving you too.

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