Last Updated on May 28, 2021 by Maggie Sutton
Police officers 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 law enforcement officials, as well as down payment assistance. Let’s take a look at some of the most common types of home loans for law enforcement to buy a home, and how Homes for Heroes can help.
Homes for Heroes Helps with Law Enforcement Mortgages
Homes for Heroes real estate specialists are experts at locating the perfect housing option 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 work or your child’s school, our specialists can find the right home for you. Your real estate agent will live and work in your local area. This means they know the market you’re looking in and have good knowledge of the inventory and pricing.
Along with sharing their industry knowledge, they’ll also save you substantial money. When you buy or sell a home with our real estate specialists, you will receive a check after closing for 0.7% of the home sale price, or $700 for every $100,000. So, if you buy a house for $250,000, you’ll get back $1750 after your closing.
Plus, if you work with our mortgage, title and inspection specialists, you can save an average of $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 combine 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 get more information.
Conventional Home Loans for Law Enforcement
Conventional loans are the most popular home loan for law enforcement and the general public, with more than 60% of mortgages being conventional. The reason is, there are numerous advantages to conventional loans. For one, there are no up front funding fees, which are fees you pay at the beginning of the loan when you use a government loan. The upfront funding fee is extra insurance that you’ll pay a loan back. There technically is no limit to the amount of money you can borrow, unlike 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 with conventional loans. But, if your down payment is less than 20%, you’ll need to have Private Mortgage insurance, or PMI. This is an additional fee to insure that you’ll pay your loan back, but you’ll only need to pay this until you’ve paid back 20% of your home’s value through your mortgage payments. Government-backed loans have a similar fee to PMI, but you must pay if for the life of the loan.
Finally, law enforcement officers who use a conventional loan are rewarded for having good, higher credit scores with lower interest rates. Those with a lower credit scores can still qualify for a conventional home loan, but their interest rates are usually higher.
Also, conventional home loans for law enforcement 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 the amount of years in your term.
FHA Home Loans for Law Enforcement
FHA loans are a great option for law enforcement, and first-time homebuyers, because you don’t need a a large down payment or excellent credit.
These loans also only require the buyer to put 3.5% into a down payment. Typically, law enforcement professionals with credit scores as low as 580 can qualify for FHA loans. Plus, closing costs can often be rolled into the loan itself too, meaning you need less money at closing.
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 home loan types, VA loans are the only loans designed exclusively for military members. Backed by the U.S. Department of Veterans Affairs, these loans offer great advantages to those who have served in the United States military. Several service members go on to have 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). A COE shows your lender that the military has verified your service record, and you are eligible to receive a VA Loan. The primary criteria to qualify is either:
- 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
- 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. Also, there is no Private Mortgage Insurance if you do not pay a down payment at all. VA loans also offer extremely low interest rates, and you can pay your loan off early without penalty. There is also a limit on the amount to be charged in closing costs. Closing costs are also 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 Law Enforcement
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. Because of the generous population requirement, much of the United States actually falls into this category, including some suburbs. USDA loans have strict eligibility requirements, however, including household limits on income. You must meet all the requirements of USDA loans in order to secure one.
Like with several other government-backed loans, there are tons of advantages to USDA loans. You might be eligible for no down payment with USDA loans. But, depending on your credit score, you may need to pay up to 10% for a down payment. This is still considerably less than a 20% down payment typically paid on a conventional loan.
There technically is not a minimum credit requirement, but law enforcement officers who have a score of 640 or higher have a better chance of being approved. 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 for law enforcement. You’ll find these most often in major metropolitan areas where real estate prices are high. Chicago is an example of a city that has an excellent home buying assistance program available to law enforcement employees of 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. If you’re moving for a new job, make sure to ask your new boss, Union or HR rep, or someone else at the city government level if there are any of these types of programs in your new city or state.
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 agent, you have the opportunity to participate in the HUD Good Neighbor Next Door program too. 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 house for 50% of the appraised value. You must agree to live at the property for 36 months, and the home must be in an approved area to qualify for the Good Neighbor Next Door program. Programs like these are great mortgage discount for law enforcement.
Homes for Heroes is here to help get you into your own home. Sign up for more information to see how Homes for Heroes can help you save money while you’re at it.