Last Updated on April 2, 2021 by Maggie Sutton
Police officers, troopers, correctional officers, and other law enforcement professionals have an extremely difficult job serving their communities. So, when it comes to buying a house, getting a home loan should be easy. Thankfully, there are a number of great home loan options available specifically for police officers and other law enforcement officials. Let’s take a look at some of the most common types of loan programs that help police officers buy a home and how Homes for Heroes can help.
Homes for Heroes Helps Police Officers with Home Loans
Homes for Heroes affiliate estate specialists are experts at locating fantastic housing options that meet your needs. Whether your department requires you to live within the jurisdiction, you’re searching in a competitive market, or you just want to live close to your precinct, our specialists can find the right home for you.
Along with sharing their expertise and gratitude, they’ll also save you substantial money on real estate fees. When you buy or sell a home with our real estate specialists, you will receive a check from Homes for Heroes after closing for 0.7% of the home sale price, or $700 for every $100,000 of the home sale price. Plus, if you work with our mortgage, title and inspection specialists, you can save an average $500 on lender fees. These Hero Rewards are just our way of saying thank you for your service and sacrifice.
Our real estate agents and lenders can help navigate the different types of loans below. Our lenders can also work with you on getting the correct paper work or credit score help, if needed. You can also receive our Hero Rewards with any of the loan or housing options you decide to go with. Take a moment to sign up with no obligation to talk to a lending or real estate specialist and get more information.
Conventional Home Loans for Law Enforcement
Conventional loans are the most popular home loan for police officers and the general public, with more than 50% of mortgages being conventional. There are numerous advantages to conventional loans. For one, there are no up front funding fees, which are fees on government loans as extra insurance that you’ll pay a loan back. There also is technically no limit to the amount of money borrowed, like with government-backed loans. However, you will still have a loan limit, determined by things like income and credit.
Your down payment can also be as low as 3% of the purchase price. But, if your down payment is less than 20%, you’ll need to have Private Mortgage insurance, or PMI. This is an additional fee similar to up front funding fees to insure that’ll you’ll pay your loan back. However, most conventional loans do not need you to refinance to get rid of the PMI once you have paid 20% of your home’s value.
Finally, police officers who use a conventional loan are rewarded for having good credit with lower interest rates. Those with lower credit scores can still qualify for a conventional home loan, but their interest rates are usually higher.
Also, conventional home loans for police officers typically come with 30-year or 15-year duration term. This means by making the required payments each month, you will finish paying off your loan in that amount of years.
FHA Home Loans for Police Officers
FHA loans are a great option for police officers and first-time homebuyers because you don’t need a stellar credit rating and they only require the buyer to put 3.5 percent into a down payment. Typically, police officers with credit scores as low as 580 can qualify for FHA loans. Closing costs can often be rolled into the loan itself, meaning you need less money at closing than with a conventional loan. These government-backed loans come with very competitive interest rates, although you will need to pay for Mortgage Insurance Premiums, similar to PMI, throughout the life of the loan.
VA Home Loans
Of all the types of home loans, VA loans are the only loans designed exclusively for military members and their families. Backed by the U.S. Department of Veterans Affairs, these loans offer great advantages to those who have served in the U.S. Armed Forces. Several service members go on to have civilian careers in law enforcement and are eligible for these home loans.
To get a VA loan, you will need to show your lender a Certificate of Eligibility (COE). This shows your lender that the VA has verified and passed your service record with the requirements of the loan. The primary criteria to qualify is you must have served in the US military for 90 days of active duty during war time, or 181 days of active duty during peace-time, or you are a surviving spouse of a military member who has also not remarried.
The benefits of a VA loan are numerous. Arguably the biggest benefit is that there is no required down payment, and there is no Private Mortgage Insurance if you do not pay a down payment at all. There are also extremely low interest rates, and you can pay your loan off early without penalty. There is also a limit on closing cost charges, and closing costs are allowed to be covered by the seller. You do not need to be a first-time home buyer to secure a VA loan.
USDA Home Loans for Police Officers
For police officers looking to buy a home in a more rural area, consider a USDA home loan. These loans do not actually have anything to do with agriculture, but rather with development of rural areas. The USDA designates a rural area as somewhere with 35,000 residents or less, so much of the United States actually falls into this category, including metropolitan suburbs. USDA loans are available for households located in areas designated by the USDA as rural. They also have to meet all of the eligibility requirements, including household limits on income. The home must also be your primary residence, it can not be used on a second home or cabin.
Like with several other government-backed loans, there are tons of advantages to USDA loans. There is a possibility for no money owed as a down payment, but up to 10% is required depending on credit score. Speaking of credit score, there technically is no minimum score requirement, but police officers who have a score of 640 or higher have a better chance of obtaining one of these loans. USDA loans have competitive interest rates and are usually fixed-rate in 15 or 30 year terms.
Geographic-Specific Home Loans
Depending on where you’re looking, you may find a geographic-specific home loan program for police officers. You’ll find these most often in major metropolitan areas where real estate prices are high. Chicago, for example, has an excellent home buying assistance program available to police officers who work in the city.
The Chicago Public Safety Officer Home Buyer Assistance Program is a pilot program that was developed to improve struggling neighborhoods by encouraging law enforcement officials to purchase homes in those communities. Eligible police officers who meet the maximum income requirements receive $30,000 to help with down payment and closing costs. Many geographic-specific programs require buyers live in the home for a certain number of years to receive full benefits. Your Homes for Heroes mortgage specialist will help you navigate all of the details and requirements for you.
HUD Good Neighbor Next Door
As a law enforcement professional, you have a fantastic opportunity to participate in the HUD Good Neighbor Next Door. This program helps public servants like law enforcement officers, first responders, and teachers purchase homes in revitalizing neighborhoods. Through this program, you can buy a HUD home for 50 percent of the appraised value when the house is in a designated area. You must agree to live at the property for 36 months to qualify for the Good Neighbor Next Door program. Programs like these are great for police officers to save money and improve communities from the day they move in.
Time to Buy
Are you a police officer or law enforcement professional looking for help financing your next home purchase? Sign up today for more information to see how Homes for Heroes can help you save money.