First responders, whether paramedics, law enforcement, firefighters or any other emergency services personnel, don’t have it easy. That’s why we at Arizona Central Credit Union have put together a unique set of home loans for first responders, including the Frontline Heroes Mortgage. We have a wide range of home loans for firefighters, home loans for medical responders and home loans for law enforcement in Arizona.
Whether the Frontline Heroes Mortgage is the best deal for you or you prefer any of our other low-cost, easy payment options, we’re sure to have something that suits your current financial situation and homebuying needs. Keep reading to see what first-responder home loan options and programs are available.
1. Frontline Heroes Mortgage
The Frontline Heroes Mortgage is one of the most popular home loans for firefighters and other first responders. The low initial cost makes this mortgage option intriguing to first responders across the Grand Canyon State. Borrowers have the option of 100% financing with no down payment. Let’s delve more into the specifics of this home loan option to see if you qualify.
Who qualifies for the Frontline Heroes Mortgage?
Anyone who is an active or former US military member, a teacher, a medical care provider of any kind, or a firefighter should apply. The idea is to provide low-cost, low or no-down-payment home loans to first responders and anyone else who is likely to be on the frontlines providing essential service to the Arizona population.
What are the terms of the Frontline Heroes Mortgage?
We offer 100% financing, meaning you can borrow up to the entire value of your new home. The only limitations are that the home must be the buyer’s primary residence (not a rental investment property or a vacation home). The borrower must also be a member of Arizona Central Credit Union and be able to pay $1,000 or 1% of the home’s purchase price (whichever is less) towards closing costs.
2. Conventional Mortgage
A conventional mortgage generally requires a down payment, but this can be as low as 3% of the home’s purchase price. The lender will run your credit score, of course, and if that score is on the lower end, you may be required to make a larger down payment.
The biggest question here is your debt-to-income ratio (DTI). This is the percentage of your monthly income that pays off your current debts, including other mortgages, credit cards, car loans, etc. A low DTI may indicate to the lender that you’ll be able to pay your mortgage on time every month without issues, which may allow you to receive favorable rates.
Another important factor is your loan-to-value ratio (LTV). This is the amount of your mortgage compared to the home’s appraised value. For example, if you put a down payment of $60,000 on a $450,000 home, your LTV is approximately 87%. Similar to DTI, the lower your LTV, the better odds you’ll receive your preferred mortgage option at favorable rates.
Lastly, if you put less than a 20% down payment on a conventional mortgage, you may be required to take out private mortgage insurance (PMI). PMI ensures that your lender gets paid if you default on the loan.
3. FHA Loans
Another popular option for home loans for first responders is FHA loans. The Federal Housing Administration insures an FHA loan. Because they are insured loans, FHA mortgages are often available to borrowers with lower credit scores than conventional loans and require lower down payments.
Borrowers must have a credit score of at least 500 to qualify for an FHA loan. The minimum FHA loan down payment is 3.5% of the home’s value if your credit score is 580 or higher and 10% if your credit score is between 500 and 579. Often, grants are available to help make this down payment.
Note that borrowers of FHA loans must purchase mortgage insurance from the FHA and make insurance payments to them as well as mortgage payments to their lenders.
4. VA Loans
Anyone considering home loans for first responders might also want to explore VA loan options. The VA (Veterans Benefits Administration) offers various kinds of support for active armed service members, veterans and the surviving spouses of deceased veterans.
To qualify, the service member must be an honorably discharged veteran or an active duty military member. They must have had at least 90 consecutive days of active wartime service or 181 consecutive days of peacetime active service. They may also qualify with six or more years of service in the Selective Reserve or National Guard.
Like FHA loans, VA loans are offered by private lenders but guaranteed by the government to keep the costs and down payments low. Often, VA loans require no down payment at all. You would not be required to take out private mortgage insurance, and the loans typically offer cheap closing costs and favorable interest rates.
5. USDA Home Loans
Like the VA and FHA, the USDA (United States Department of Agriculture) offers various kinds of home ownership assistance and support to qualifying borrowers. Many of these programs include home loans for first responders who qualify through the USDA.
The requirements for a USDA loan are your income and credit score, and the home is in a USDA-designated area. Credit score requirements may vary depending on the lender, but a score of 640 or higher is generally accepted.
Homebuying Programs For Arizona First Responders
There are various services and financial products designed to make homeownership easier for Arizona’s first responders. Many of them can be used alongside the Frontline Heroes Mortgage.
Home in Five Program
The Home in Five program is open to people who live In Maricopa County and have an annual income of less than $112,784. It can help you make the down payment on a primary residence that is a single-family home, a townhome or a condo.
The program may provide as much as 4% of the home’s value as a grant, which is usable for your down payment. US military personnel, veterans, K-12 teachers and other first responders may qualify for an additional 1% of their purchase price.
Apply For A First Responder Loan To Help Secure Your Next Home
We are dedicated to making sure the people who keep the people of Arizona safe and healthy have access to the best possible housing and the financial products they need to afford it.
If you’re ready to take the next step in the homebuying journey, visit our prequalification page to see how much home you can afford. For more information or to inquire about our mortgage options, contact one of our mortgage specialists today.
