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The HELPER Act Mortgage: Explained
The HELPER Act of 2023 is a mortgage program for teachers, firefighters, and law enforcement officers that exempts first-time home buyers from down payment and mortgage insurance requirements.
Congress introduced the original The HELPER Act on May 13, 2021 as an amendment the National Housing Act, which created the U.S. mortgage insurance system. The House and the Senate renewed the HELPER Act on May 10, 2023 and made changes to it.
The bill’s new name is The HELPER Act of 2023.
HELPER is an acronym. It stands for “Homes for Every Local Protector, Educator, and Responder.” As of today, the bi-partisan bill has yet to become law.
This article explains how the HELPER Act mortgage works, who’s eligible, and how the program differs from other 100% mortgages and first-time home buyer programs.
Did The HELPER Act Pass Yet?
As of May 31, 2023, the HELPER Act is not yet passed. Congress introduced the 100% mortgage program in its 2021-2022 legislative session and revived the bill with revisions in its 2023-2024 session.
The HELPER Act is among several government programs for first-time buyers in Congress currently, including a $15,000 first-time buyer tax credit bill called The DASH Act.
The White House supports homeownership assistance for first-time buyers.
In April 2023, President Biden launched his forthcoming presidential campaign, revisiting the themes of his 2020 campaign. He pledged to address “unfinished business,” including creating new, affordable housing opportunities for all Americans who want them.
We’ve seen some of these plans in action already:
- The Biden $15,000 First-Time Homebuyer Tax Credit
- The FHFA First-Time Home Buyer Mortgage Rate Discount
- The FHA Mortgage Insurance Premium reduction of 2023
The HELPER Act is an affordable housing bill with bipartisan support and traction. Congress is expected to pass The HELPER Act into law. The self-funding bill has dozens of co-sponsors in the House and the Senate. It does not cost taxpayers money.
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What is The HELPER Act?
The HELPER Act is a mortgage program for first-time home buyers that provides 100% financing to first responders and educators with no monthly mortgage insurance required.
Eligible home buyers must meet the following criteria, according to the rewritten HELPER Act of 2023:
- Must work full-time as a K-12 educator, firefighter, or law enforcement officer; or full-time as a paramedic or emergency medical technician (EMT) with a federal, state, Tribal, or local government
- Must have worked at least four of the last five years in a qualifying job
- Must be in “good standing” with their employer with a plan to work another 12 months, at least
- Must be purchasing a 1-unit primary residence – vacation homes and rentals are not allowed
- Must be using the HELPER Act mortgage for the first time
- Must meet the basic eligibility requirements of an FHA loan
- Must be a first-time home buyer, defined as not owning a home for the prior three years
The HELPER Act doesn’t require eligible buyers to complete a special mortgage application. Teachers and first responders are automatically considered for the HELPER Act mortgage by their FHA-approved lender at the time of application.
All mortgage companies that make FHA loans can make HELPER Act mortgages, too.
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How Does The HELPER Act Mortgage Work?
The HELPER Act mortgage is a standard FHA mortgage with three essential modifications.
- Replaces the FHA’s 3.5% down payment requirement with a no-money-down option
- Removes the buyer’s obligation to pay monthly mortgage insurance premiums (MIP)
- Raises the buyer’s FHA upfront mortgage insurance premium to at least three percent
HELPER Act mortgages make homes more affordable by eliminating the FHA’s down payment and mortgage insurance requirements.
The typical first-time home buyer raids a savings account or uses a 401(k) to make a down payment. Under the HELPER Act, eligible buyers can leave money in the bank for emergencies, to earn interest, or furnish a new home instead.
Furthermore, because the HELPER Act exempts buyers from making monthly mortgage insurance payments, it’s easier for teachers and first responders to qualify on a low-to-moderate household income.
HELPER Act FHA mortgages have other vital benefits, too, including:
- Buyers can choose from fixed-rate and adjustable-rate mortgage (ARM) options
- Buyers can be pre-approved with credit scores of 500 or higher
- Income requirements are more flexible compared to other mortgage types
In addition, FHA loans are assumable mortgages, which can improve the future marketability of a home.
Who Is Eligible For The HELPER Act?
The HELPER Act bill lists six eligibility standards for home buyers to qualify for a no-money-down, no MIP HELPER Act mortgage.
1. Must be a first-time home buyer
The HELPER Act of 2023 is for first-time home buyers only. The HELPER Act defines “first-time home buyer” using 42 U.S.C. 12704 which states that a first-time home buyer is any person who hasn’t owned their primary residence in the prior 3 years with exceptions for certain displaced homemakers and single parents.
2. Must be a full-time “protector, educator, or responder”
Eligible HELPER Act home buyers must be employed full-time as an educator, firefighter, or law enforcement officer; or a full-time paramedic or emergency medical technician for a federal, state, Tribal, or local government.
Educators must be full-time teachers in a state-accredited public or private school that provides direct services to students in grades pre-Kindergarten through 12. School administrators and operations staff are ineligible for the HELPER Act.
Firefighters and paramedics must be full-time employees of the federal government or a state, Tribal, or local government. Emergency medical technicians must also be full-time employees of a fire department or an emergency medical services (EMS) responder unit of a government.
Eligible law enforcement officials must be full-time employees of a federal law enforcement agency or a state or local government. Eligible job titles may include Police Officer, Deputy Sheriff, Detective, Police Sergeant, Corrections Officer, Police Records Clerk, Animal Control Officer, Traffic Enforcement Officer, and School Resource Officer.
Notable exclusions in the HELPER Act include part-time and substitute teachers, social workers, and nurses.
3. Must have four years of employment in a HELPER Act-eligible job
Before closing, eligible home buyers must have at least four years of full-time employment in the last five calendar years as an educator, firefighter, or law enforcement officer; or as a qualified emergency medical technician. The bill’s language implies that buyers may change their job, job title, and function and maintain full eligibility.
The HELPER Act makes exceptions for home buyers unable to work because of a job-related disability related to the above professions.
4. Must plan to continue employment for at least one year
The HELPER Act requires buyers to certify in good faith they’ll continue full-time employment as a protector, educator, or responder for 12 months or more after the closing date.
Home buyers who reasonably believe they’ll stay in their job meet The HELPER Act’s “good faith” employment requirement. Buyers with advance plans to leave their job after closing will not.
5. Must be in good standing at the place of employment
Eligible home buyers must be in a positive position and in good standing at their employment. They may not be on probation or under investigation for actions that are grounds for termination.
6. Must be using The HELPER Act for the first-time
The HELPER Act mortgage is a signle-use mortgage program. Eligible home buyers may not use the HELPER Act mortgage than once including as the primary mortgage borrower, the co-borrower on a mortgage, or as a non-occupant co-borrower or co-signer.
7. Must be purchasing a 1-unit home
Eligible home buyers must use a HELPER Act mortgage to purchase, construct, or repair a one-unit home, including single-family homes, condominiums, and manufactured homes permanently affixed to a lot. Multi-unit homes such as 2-4 unit properties are ineligible.
8. Must be eligible for an FHA mortgage
The HELPER Act mortgage is an FHA-backed home loan modified to remove down payment and mortgage insurance requirements. Eligible buyers must meet minimum Federal Housing Administration (FHA) mortgage standards, including income verification, identity confirmation, and a 500 credit score or higher. FHA loan limits also apply.
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How To Apply For A HELPER Act Mortgage
The HELPER Act mortgage is a modified FHA mortgage, so home buyers can apply for the HELPER Act mortgage using the standard FHA application.
First, before beginning your application, make sure you meet the FHA’s minimum mortgage standards, including:
- A credit score of 500 or higher
- Proof of income through W-2s and paystubs
- A manageable debt-to-income ratio
- A valid social security number
- U.S. citizenship or legal residency
Next, make sure you meet the additional program requirements of the HELPER Act mortgage:
- Must be a first-time home buyer
- At least four years of work experience in an approved, full-time job
- An intention to remain in your position for at least 12 more months
- A plan to purchase a 1-unit home, condo, or manufactured home
Then, locate an FHA-approved mortgage company.
The difference between a mortgage lender and a mortgage broker is negligible for many FHA loans, including HELPER Act loans. Mortgage rates and closing costs are often similar between companies. However, it’s good to comparison shop.
The Consumer Financial Protection Bureau (CFPB) states that more than 850 mortgage companies make FHA loans nationwide. You can find an FHA lender online, via personal referral, or use the Homebuyer.com mortgage pre-approval tool.
As part of your HELPER Act application, verify your income and employment history, and perform a soft credit check to ensure you meet FHA requirements. The program exempts eligible buyers from down payments and monthly mortgage insurance premium requirements.
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HELPER Act 100% Mortgage Alternatives
The HELPER Act mortgage is an extension of the FHA 203(b) Mortgage Insurance Program, which makes it a modified FHA loan. Home buyers who use the HELPER Act mortgage must meet FHA mortgage guidelines and use FHA mortgage rates.
Different 100% mortgage programs will offer better terms for some home buyers.
Here are 4 HELPER Act mortgage alternatives and how they compare.
1. USDA Mortgage
USDA mortgages are 100% mortgages for non-urban homes, including in suburban and rural neighborhoods. The U.S. Department of Agriculture backs USDA loans. They allow 100% financing and feature low fees, reduced mortgage insurance premiums, and mortgage rates below national averages.
USDA mortgages are available to all buyers in all professions – teachers, law enforcement, first responders, and everything else.
Over ninety percent of the U.S. land mass is eligible for a USDA mortgage. Use this interactive USDA Eligibility Tool to find your home on the map.
2. VA Mortgage
VA mortgages are 100% mortgages for active duty military; veterans of the Armed Forces, National Guard, and Reserves; and select spouses.
The Department of Veterans Affairs backs VA loans and guarantees them against loss. The VA guaranty means lenders can offer VA mortgages at lower interest rates than other low- and no-downpayment loans.
Like HELPER Act mortgages, VA loans are exempt from monthly mortgage insurance.
3. Doctor Loans
Doctor Loans are 100% mortgages for doctors, dentists, active medical residents and fellows, and other medical professionals including veterinarians and optometrists. Sometimes called Physician Loans, they’re no-money-down mortgages that buyers can find at retail banks and some mortgage brokerages.
Doctor mortgage loan guidelines vary between lenders, but, in general, doctor loans don’t require a down payment, waive private mortgage insurance, and take a lenient approach to medical school debt.
Doctor loan mortgage rates are typically higher than comparable FHA or conventional loans.
4. 100% Forgivable Mortgages
100% forgivable mortgages are mortgages where the buyer borrows its down payment in the form of a second mortgage, then, typically after five years, the second mortgage gets forgiven.
Like HELPER Act mortgages, forgivable mortgages are based on the FHA mortgage program, so buyers must meet minimum credit score, debt-to-income ratio, and citizenship requirements.
To apply for a forgivable mortgage, ask your mortgage lender about availability.
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When Will The HELPER Act Pass?
The HELPER Act is expected to pass into law in mid-2023.
The bill’s timeline through Congress is as follows:
- Introduced in the House as bipartisan H.R. 3172, May 13, 2021
- Added 11 co-sponsors from both parties
- Introduced in the Senate as bipartisan S. 2981, October 7, 2021
- Added 62 additional bipartisan co-sponsors in the House of Representatives, 2022
- Added 16 additional bipartisan co-sponsors in the Senate, 2022
- Re-introduced with revisions as H.R. 3170 with 43 bipartisan co-sponsors, May 2023
- Re-introduced with revisions as S. 1514 with seven bipartisan co-sponsors, May 2023
Because the bill merely expands the National Housing Act of 1934 to include a new mortgage insurance program for teachers and first responders and doesn’t require coordination among federal and state agencies like the $25,000 Downpayment Toward Equity program, or taxpayer funding like the American Dream Downpayment Act, the HELPER Act can pass into law with relative simplicity.
The HELPER Act will boost home affordability for millions of first-time buyers, too.
According to data from the Bureau of Labor Statistics, Bureau of Justice Statistics, and National Center for Education Statistics, more than five million Americans work in HELPER Act professions:
- 3.7 million full-time pre-K through Grade 12 educators
- 700,000 full-time law enforcement officers
- 370,000 full-time firefighters
- 260,000 full-time emergency medical technicians and paramedics
Congress debated over a dozen home affordability programs in its last session, including the Homes for Every Local Protector, Educator, and Responder Act. Now, the bill is revived.
We expect continued bipartisan support for The HELPER Act and an eventual passage into law.
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Frequently Asked Questions About The HELPER Act
If you have a question that doesn’t appear here, use the chat box. We’ll add your inquiry to this FAQ because if you’re asking a question, we know other readers have the same question.
Is this webpage updated with accurate HELPER Act of 2023 information?
Yes, this page is updated and verified against the most recent bill version regularly. The date of last update is listed at the top of this article.
Is The HELPER Act of 2023 for first-time home buyers only?
Yes, the new HELPER Act is for first-time home buyers only. This original HELPER Act of 2021 included all home buyers.
What’s different between the HELPER Act of 2023 and the original HELPER Act of 2021?
There are a few key differences between the 2021 HELPER Act bill and the 2023 HELPER Act bill.
- The HELPER Act of 2023 applies to first-time home buyers only
- The HELPER Act of 2023 includes Tribal governments in the eligible employer list
- The HELPER Act of 2023 changes job history to accept gaps in full-time employment
What is the status of the HELPER Act?
The HELPER Act is an active bill with versions in the 2023-2024 House of Representatives and 2023-2024 Senate. Both versions have bipartisan co-sponsors and support. The bill still must be voted into law.
Is The HELPER Act available yet?
No, the HELPER Act is not yet available. We expect the bill to pass into law in mid-2023. Homebuyer publishes a special newsletter with updates. Register below for updates.
I have four years of employment as a first responder but with different employers. Am I still eligible for a HELPER Act mortgage?
The HELPER Act requires home buyers to work for four consecutive years as teachers or first responders. Buyers are not required to work for the same employer for all four years or in the same role.
I was a full-time firefighter for two years and became a teacher for the next two years. Am I eligible to use The HELPER Act?
Yes, the HELPER Act states that eligible buyers must work full-time as teachers or first responders for four consecutive years. It doesn’t say the buyers must keep the same job function.
What will happen if I leave my job within 12 months of using a HELPER Act mortgage?
Suppose you leave your job within 12 months of using a HELPER Act home loan. In that case, the program administrator may request that you sign an affidavit that your job change was unexpected.
Does The HELPER Act have an income limit?
No, The HELPER Act doesn’t enforce income limitations.
Can I use The HELPER Act to buy a short-term rental property?
No, the HELPER Act is for primary residences only. Home buyers may not use their homes to generate revenue from short- or long-term rentals.
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