Mortgage

Helping Heroes and Homeowners

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On May 13, John Rutherford (R-Fla.), Al Lawson (D-Fla.), John Katko (R-N.Y.), and Bonnie Watson Coleman (D-N.J.) introduced a bill called the Homes for Every Local Protector Educator and Responder Act. It is also known as the HELPER Act. The first unusual aspect of this Act is that it is bipartisan. But let’s get specific. Here are some proposals contained in that bill, if passed.

  • Home buyers will be able to finance up to 100% of the acquisition price. Down payment might be able to be skipped entirely.
  • FHA home purchase price limits would prevail.
  • There would be an upfront 3.6 mortgage insurance premium (but no monthly insurance charge).
  • That up front cost could be financed.
  • FHA or HUD would administer the program. 
  • The loan would be modeled like a VA mortgage.
  • One company would be chosen for title, appraisal, and underwriting.
  • Police officers, prison guards, firefighters, paramedics, emergency medical technicians and public or private school teachers would all be eligible.
  • Eligible borrowers must have worked in one of those professions for at least four years.
  • They also must be in good standing at their job, and not subject to disciplinary action. They must also show that they intend to keep working in the same job for another year.

Per HousingWire

“Samuel Royer, the national director for Heroes First Home Loans at Churchill Mortgage and a veteran, came up with the idea for the program, to acknowledge first responders’ sacrifices, he said. ‘I believe that American first responders deserve the same access to affordable housing benefits that I have as a veteran,’ Royer said.”

Fox News claims this loan would save qualified homebuyers an estimated $90 per month on their mortgage payment and significantly reduced upfront  costs. 

There is already a mortgage program dedicated to teachers: The Good Neighbor Next Door Mortgage Program. This program gives teachers the opportunity to buy certain Department of Housing and Urban Development-owned single family homes in revitalization areas for 50% of list price. Assuming eligibility, here are some specifics on that one.

  • A Federal Housing Administration, Veterans Affairs, or conventional mortgage can be used.
  • If using an FHA loan, the down payment requirement is only $100. 
  • Borrowers can opt to use an FHA 203(k) mortgage to borrow more money to rehabilitate the home if it needs more than $5,000 in repairs.
  • The discount home price is in the form of a silent second mortgage. Borrowers sign a note, but no interest or payments are due on it so long as they occupy the home as their sole primary residence for a full three years from the date of occupancy. 
  • The date of occupancy will be the 30th, 90th or 180th day after purchase, depending on how much work is needed to make the home livable.
  • Home buyers do not have to maintain the same job for the required occupancy period. 
  • Changing jobs after the purchase won’t affect eligibility, but they still need to complete the required occupancy.
  • After the 36th month of occupancy, borrowers will be released from all obligations to repay the second mortgage. At that time, they are free to remain in the home or sell it and keep any profit.
  • If home owners fail to complete the required occupancy, they will be responsible for paying back the discount on a prorated basis. Also, they may face administrative sanctions such as being barred from participating in other federal programs.

In addition to tax deductions, the American Rescue Plan Act, loan forbearance plans, COVID-19 National Emergency Partial Claim, and mortgages specific to a multitude of lenders, there are also the Heroes Act and the Cares Act.

And inside the latest stimulus package, there’s a lesser known type of Covid-19 relief that could help millions of homeowners who are behind on their mortgage payments. While most Americans are focused on $1,400 stimulus checks, there’s also approximately $10 billion of Coronavirus mortgage relief available to help homeowners pay their mortgage. 

According to Forbes, here is how mortgage aid works for applicable homeowners:

  • “The Homeowners Assistance Fund can help you pay not only your mortgage, but also your taxes, insurance, utilities and common charges like monthly homeowners association dues.
  • The U.S. Treasury Department is sending money to states to distribute direct financial assistance through state housing agencies.
  • The amount of mortgage aid depends on each state’s number of late mortgage payments, foreclosures and unemployment statistics, for example.
  • States must spend this Covid-19 mortgage relief by September 30, 2025.
  • Contact your state housing agency to learn more about Covid-19 mortgage relief in your state.
  • You must own your home.
  • You must have a mortgage.
  • Your mortgage balance in 2021 must be less than $548,250.
  • Funds will be available to mortgage borrowers who are struggling to pay off their mortgage.
  • At least 60% of the mortgage aid must be allocated to mortgage borrowers who have an income that is less than the national median income or the respective local median income, whichever is higher.”

The fact that so many government agencies are helping homeowners and heroes is great, but here’s better news. In the US, the Covid-19 emergency is finally slowing down. Check out this curve (thanks NY Times).

The Washington Examiner offered this.

“What does it mean, then, to accept that the emergency is over?

All schools should open five days a week. Workers should return to the office. All of us should toss our masks in the trash.

Churches and bars should be filled to whatever the fire marshal will allow, so that we can pray, sing, and revel as before.

This is already what life is like in much of the country. If you live in Texas or Florida or Missouri, where infection rates are low and hospitalizations are falling while masks are rare and everything’s open, you might say the pandemic is already over. You’d be right.” 

So what does that mean for the mortgage and housing industry? Here are some opinions. But realizing no one expected the full impact of Covid-19 and everyone thought Hilary Clinton would win, my answer is, “Who knows?”  😕 One thing we CAN be sure of, it’s always time for fun.

So let’s create some. Let’s make our OWN post-Covid mortgage predictions. I’ll start ...

  • Every hero, including fire fighters, nurses, doctors, etc. and also including heroes such as moms, dads, blog writers, gardners, retired folks, athletes who make less than a million dollars a year, washer repair people, RateZip employees, etc. will all be granted mortgages at 0.01%.
  • Mortgage payments will be due when the borrower feels comfortable making it. As long as this is once a year, that will be fine.
  • Movie stars, professional athletes and the uber rich who own more than 3 houses will donate those in excess of 3 to the homeless or their fans who want to move.
  • Mortgage companies will pay all employees a bonus not less than 10% of their 2020 gross profits. 
  • All mortgage company employees and their families will be given the option to work remotely for the remainder of their career.
  • Mortgage interest rates will change annually (not daily) and be chosen by employees of RateZip.

Your turn to predict the future housing and real estate markets!  But my turn to add some silliness.

The past, the present, and the future walked into a bar. And things got a little tense.

I told my son he should be a cement contractor because that field has a solid future.

Finally got around to watching the whole “Back to the Future” trilogy! It’s about time.

I have this incredible ability to predict what’s inside a wrapped present. It’s a gift.

What do you call an overweight kidney doctor who can also predict the weather? A meaty-urologist

Where do meteorologists save their weather predictions? In the cloud.

I went to Bank of America to deposit a check, and they asked me for ID. I said, “Are you telling me other people are trying to put money into my account and you’re telling them no?”

Tip-jar humor in our local coffee shop: “Afraid of Change? Leave It Here.”

I'm currently boycotting any company that sells items I can't afford.

About Kathleen Heck

Kathleen Heck has worked with hundreds of top sales professionals, authors, corporate executives, educators, and management level professionals. She started her career as a college and high school educator. Later she changed industries and moved to financial services, first as a Mortgage Loan Officer and then rising to lead of team of over 2000 financial professionals. She is the author of "After the Beep" and "Meltdown: I Need a Plan". Currently serving as the President of the Croyance Group, Ms. Heck is a Certified Professional Coach and holds several Masters Degrees and a PhD. See more at Croyancegroup.com

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