The Truth Behind "Heroes" & "Next Door" Programs

The truth on Heroes “Programs”

In the world of home buying, public servants like nurses and teachers are often hailed as heroes, and rightly so! However, this status sometimes leads to a misconception that there are tailored mortgage programs designed exclusively for them. Sadly, the truth is far less glamorous.

In reality, very few programs are exclusive, and many “offers” are straight up lies.

Unless it’s offered directly from the state government, it’s likely something that any lender can do.

While there may be certain benefits and assistance available, they’re often not as extensive or exclusive as believed. It’s essential for nurses and other heroes to approach home buying with clear-eyed pragmatism, understanding that while their service is invaluable, it doesn’t necessarily come with a red carpet of specialized mortgage programs. Research and due diligence remain their most reliable allies in navigating the complex terrain of home ownership.

What about grants?

In the world of mortgage’s lying goes unnoticed regularly. You will see programs promising all sorts of grants and assistance when, in reality, might be for very niche cases, might not exist at all, or might not be available any longer.

There are sometimes grants available which is why it’s important to work with a lender that will do that research for you, but the word “grant” is heavily abused.

How about down payment assistance?

Down payment assistance does exist but…

ask yourself this: How are they recouping their money?

Down payment assistance (DPA) is typically made up to drive more business.

There are three main types of DPA:

• A grant provided from the lender via a non-profit.

  The lender partners with a non-profit or gives a grant themselves. They make money by increasing the interest rates on the primary loan. The rates will typically be at least 1% more than a normal interest rate.

• A second, sometimes forgivable, loan.

  The lender provides a second loan or uses a state program providing second loans. The first loan is again usually higher than normal but because the loan is sometimes forgivable and because the higher interest second loan is on a smaller sum of money, these can be better options.

• True free money.

  These are heavily based on your local county and timing. Very rarely but sometimes counties do have true assistance based on your income, area and job type. These are, of course, preferable but are very infrequent.

Which DPA option should you choose?

Obviously, you want to investigate free assistance for your local county first. We can help with this!

Keep your skeptical hat on!

Even when it’s run by the state government, you want to be very careful not to get tricked into anything. Weigh your options and speak with someone who feels transparent and open.

We prefer the second lien option in most cases, especially when it’s forgivable but you’ll want to weigh out the pros and cons of each. A feature such as the ability to early refi might outweigh short term financials.

They offered to pay for my appraisal, no fee’s etc!

That’s a nice gesture but be aware that many lenders can do this. This is a throw in.

Who cares about an appraisal when that lender targeting you might be $5,000 more expensive than a local broker.

Summary

Thorough research is key. Trust your instincts.

When navigating mortgage programs like Heroes Programs, it’s essential to find a loan officer who will not only guide you but be realistic and open with you. Transparency is crucial in ensuring you understand the terms and implications of your new loan. Take your time to find a reliable and transparent loan officer who will prioritize your best interests and provide clear, honest guidance throughout the process.

As always, feel free to reach out to us if you need assistance.