Last Updated on June 29, 2023 by Luke Feldbrugge
Looking for firefighter home loans can be a bit of a rabbit hole. The more you dig, the more you find. There are many resources that offer all kinds of help, but is it the help you need? We did some digging for you.
You probably started with the simple question “are there any special mortgage programs for firefighters or first responders?” The simple answer is yes, but after that we need to narrow down your search a bit. This is applicable information if you’re a first time home buyer, or if this is for a second mortgage. Here we cover the types of firefighter home loans available, the importance of your credit history, getting pre-approved for a home loan, down payment assistance programs and the closing costs you will likely need to pay.
Main Types of Firefighter Home Loans
Firefighter home loans can be challenging and complicated when you’re not working with them everyday like mortgage brokers. In preparation for working with a mortgage professional, check out our post on the four main types of mortgage loans for firefighters including:
VA Home Loans for Firefighters
You can get no money down mortgages and they are worth investigating. For example, if you were in the military before your firefighting career path, VA loans are one of the most popular in the no money down category.
USDA Home Loans for Firefighters
Since the majority of firefighters are volunteers (67 percent), 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 percent of the U.S. map), so these mortgages are worth checking out.
FHA Home Loans for Firefighters
FHA loans are mortgages insured by the Federal Housing Agency and only require 3.5 percent down payment on the purchase price, so firefighters should check these out too–especially if you are buying your first home. There are a few requirements for these loans, so it’s important to check those out. On the plus side, FHA loans are available to home buyers who have credit scores as low as 580. They do, however, require mortgage insurance.
Conventional Loans for Firefighters
Conventional home loans for firefighters are the most popular because they typically come with lower interest rates, fewer required fees and less terms to qualify. However, they are not backed by the federal government and require a credit score of at least 620 with a typical minimum down payment of 10 percent. Although you can avoid paying Private Mortgage Insurance (PMI) if you put down a minimum of 20 percent which translates into cost savings for you over the long-term.
Your Credit Score and Credit Reports
If your credit score is below a certain number (620), it can create issues. Mainly higher interest rates, or your loan application may be denied if it doesn’t meet the loan’s specific qualification criteria. If this happens, it’s not a conspiracy or a personal vendetta. There are strict federal and state lending regulations that all lenders must follow, and loan qualification criteria is a big one. Certain kinds of mortgage insurance from Fannie Mae, for example, aren’t available to people with a credit score under 620.
If you are or recently were a renter, there’s good news on the credit reporting front. Recent changes in how the Big Three credit agencies calculate your credit scores make it possible to factor your rent payments into your score. If you pay your rent regularly and on time, that can count in your favor. How much can it help? TransUnion did a study back in 2017 that showed that the average increase in credit score was 16 points. That’s the average, but the increase was a lot more for people with credit scores below 620.
Getting Pre-Approved for a Firefighter Mortgage
Getting pre-approved for a firefighter mortgage is an important step in the process. The mortgage lender will eventually want a lot of information from you when you choose to begin the loan application process. Right now, it’s a necessity to complete a loan application and get pre-approved for a firefighter home loan in this competitive real estate market. We recommend this is the first step you take in your home purchase process.
Homes for Heroes real estate and mortgage specialists provide firefighters an average savings of $2,400 when purchasing a new home with a firefighter home loan. Simply sign up today to learn how they can assist you and save you good money in the process.
Firefighter Down Payment Assistance Programs
If it seems to you that the down payment for a mortgage loan is intimidating, you’re not alone. The traditional 20 percent down payment is tough to put down for many home buyers, especially first-time buyers. Even Forbes Magazine asked the question: Is The 20 percent Home Mortgage Down Payment Dead In 2021?
There are down payment assistance (DPA) programs all over the country. There are more than 2,000 of them, one in every state, and the requirements for eligibility vary widely. Some offer grants that you repay as you pay down your mortgage. Others offer loan programs that are forgiven if you stay in your house for a period of time. Some are specifically available for firefighters.
When you begin the process of applying for a firefighter home loan, make sure to ask any loan officer you work with what down payment assistance programs are available in your area. Be sure to specifically inquire about any special DPA programs for firefighters.
Closing costs can seem like a minor concern given everything else that transpires when buying a home. But when you get to the closing, they can be a bit of a surprise. These additional costs can include insurance fees, discount points, origination fees, cost of the transaction and more.
Some examples of lesser-known closing costs include:
- Credit Report Fee
- Mortgage Rate Discount Points
- Recording Fee
- Underwriting Fee
- Homeowners Insurance Policy
- Prepaid Interest
- Property Tax
For a more complete list of potential closing costs and additional fees, including details for each, here’s a post breaking down extra closing costs you may need to pay when it comes time to sign the final paperwork.
Opportunity to Save 50 Percent on Price of Home
The elephant in the room is the overall affordability of a new house, especially with the bidding wars in today’s real estate market. Even a great firefighter mortgage program can’t help you if you simply can’t afford the houses on the market.
The HUD Good Neighbor Next Door Program faces the affordability issue head on. This program from the Housing and Urban Development government agency takes 50 percent off the price of a home for community heroes, including firefighters. HUD uses this program to encourage revitalization by having police, firefighters, teachers and EMS workers live in the communities they serve.
There are specific qualifications that can limit the availability of these homes to some firefighters, but it may be worth investigating for yourself. One example is you must live in the house as your primary residence for 36 months. Also you can only choose from the houses on HUD’s list, and some of those are in areas that are in revitalization areas.
Here is the online resource of Good Neighbor Next Door eligible properties.
Firefighters Save Money on Home and Mortgage with Homes for Heroes
We have been working for more than 20 years to help firefighters find new homes or sell their current homes, and our way to say thank you for your service is to save you money doing it.
“I believe that the Homes for Heroes program is very important. I am a Detroit Fireman. My second line of work is construction. You helped me sell the home I remodeled with my grandfather. The program meant so much to me – getting back some of my savings and then donating some of my proceeds to other heroes. Thank you to all the heroes for whom ‘above and beyond’ is part of every shift they work.” – Duane bought a home in Michigan
Homes for Heroes can help firefighters in three main ways after you sign up on our website:
- We connect you with our local real estate specialist who has joined Homes for Heroes specifically to assist firefighters with their home buying and/or selling process.
- We connect you with our local mortgage specialist who also joined Homes for Heroes to specifically assist firefighters with their firefighter home loan.
- Receive Hero Rewards® savings when you close on your home using our real estate and mortgage specialists. The average amount received is $3,000.
That middle step is key to the reason you are here – looking for help with mortgage loans for firefighters. Our Homes for Heroes lenders have made a commitment to help the heroes of our communities – firefighters, EMS personnel, law enforcement, military personnel, healthcare professionals, and teachers. They understand and know how to navigate some of the unique challenges that being a full time or volunteer firefighter can present.
Ever a firefighter, always a firefighter. That’s why we serve and offer the savings to current and former firefighters. There’s no catch, no fees, no extra paperwork. You will receive excellent service from our specialists and receive significant savings after closing.
Homes for Heroes Foundation Grants Helping Firefighters
In addition to helping firefighters on an individual basis, we also support organizations who support firefighters with other needs through our Homes for Heroes Foundation.
To expand its Circle of Giving, Homes for Heroes, Inc., donates a portion of its earnings to the Homes for Heroes Foundation. So, every time a hero like you buys or sells a home using the Homes for Heroes program, you are helping heroes in need. Here are some of the foundation grants awarded to organizations supporting firefighters:
- $100,000 grant awarded to Firefighter and First Responder Healing Center
- $50,000 grant awarded to Tunnel to Towers to support fallen firefighter’s family
- $10,000 grant awarded to North Carolina Fallen Firefighters Foundation
- $10,000 grant awarded to Running 4 Heroes to support first responders
We also have firefighting organizations around the nation with whom we partner with to provide our services and savings to their members.
If you’re ready to buy a home or refinance a mortgage, we would be honored to work with you to get it done and save you money in the process. Simply sign up today to learn more about how our specialists can assist and save you good money.