First Responder Home Loans: Low Down Payment Options for Police, Fire and EMS

First responder families sacrifice for their communities in many ways, usually in exchange for limited salaries and stressful, long hours. Considering the extensive time spent away from their own family, many first responders want to provide a stable environment for their spouses and children by buying a home.

But traditional home buying barriers, like saving up for a large down payment, often prevent police, fire and EMS personnel from qualifying for a conventional mortgage.

Fortunately, some mortgage lenders and government agencies recognize these challenges and have created programs to benefit those who answer the call when others are in need. Read on to learn about various first responder home loans available to your profession.

Perks of using a first responder home loan program

A first responder home loan can open the door to a low down payment solution that doesn’t require private mortgage insurance (PMI). In some cases, underwriting guidelines might be more flexible, making it easier to qualify for a mortgage. For example, some lenders treat student debt more favorably when calculating your debt-to-income ratio (DTI).

Depending on the mortgage lender or program, you might qualify for lower interest rates, grant funds, closing cost assistance or other discounts thanks to your profession.

While this type of mortgage program is limited compared to other high-income professions in the physician mortgage category, first responders have access to many special down payment assistance and home loan programs.

First responder mortgage programs to consider

Unfortunately, first responders aren’t typically at the top of the list of target professions for most professional mortgage programs. But that doesn’t mean you can’t take advantage of the best mortgage loan options as a first responder.

First Merchants Bank (formerly Level One Bank)

The First Merchants Bank professional mortgage program offers first responders the opportunity to finance a home loan amount of up to $350,000 with only 3% down and no PMI. However, this program is currently limited to borrowers in Indiana, Michigan and Ohio.

But if you live and work in these states, you’ll also have the option to close on a home up to 60 days before starting a new position.

Additionally, this lender offers fast, efficient closings. In fact, the loan officer listed below has an average closing time of 18 days. This can be especially beneficial for new hires and transfers who want to get their families settled in a new location as quickly as possible.

Note that this is only available in three states in the Midwest.

States available: IL, IN, MI, OH

Alternative mortgage options for first responders

With limited pay and a stressful work environment, first responders shouldn’t hesitate to take advantage of financial resources. First responder home loans can benefit their household. Here are some additional homeownership programs to explore:

• VA Loan. Many first responder families are also military families. If that’s you, you might be better served by using a VA loan. Benefits include no down payment, no PMI, competitively low interest rates and limited closing costs. However, you’ll pay a VA funding fee (but it can be waived if you receive compensation as a result of a service-related disability).
• HUD Good Neighbor Next Door Program. This program from the U.S. Department of Housing and Urban Development encourages first responders to engage in community revitalization in the areas they serve. It offers a 50% discount on the listing price of eligible foreclosed properties. However, available properties in revitalization areas are limited, and there are specific eligibility requirements to consider.
• Homes for Texas Heroes Program. Some municipalities and states offer down payment assistance programs for first responders. For example, Homes for Texas Heroes gives eligible borrowers the option to receive down payment assistance in the form of a grant or a deferred forgivable second lien loan. So, be sure to check out resources local to your desired area.

Additionally, first responders should keep an eye out for state and federal legislative efforts to make owning a home easier. For example, the HELPER Act is a bipartisan bill and home loan assistance program that was introduced in 2021. However, it hasn’t made it through the legislative ranks as of yet.

Hopefully, with time, more first responder home loan programs will become available to this worthy group of public servants.

Should you use a first responder home loan program?

First responder home loan programs, such as First Merchants Bank mentioned above, can be a huge benefit to law enforcement officers, emergency medical technicians, paramedics and fire department personnel. A low down payment solution with no PMI can free up money for other financial priorities. But it can also prevent you from having to work extra jobs to save up for a large down payment, which means more time with your family and less overall stress.

Because first responder home loan programs aren’t as abundant as other professional loan programs, you’ll need to do your research to find the right fit for your household. For example, my husband is both a police officer and a combat veteran. We found the VA loan was the most beneficial route for our family, and we were able to buy a home with a $0 down payment. However, we ran into obstacles because some realtors and sellers prefer to avoid buyers using the VA loan due to misconceptions and poor prior experiences.

So, it’s best to explore all mortgage options and down payment assistance programs available to you and your spouse.

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