AGENDA REPORT
Meeting Date: June 27, 2023
Item Number:
To: Honorable Mayor and City Council
From: Cynthia Owens, Municipal Affairs Program Manager
Subject: REQUEST FOR DIRECTION ON S.1514 AND H.R.3170 - HOMES
FOR EVERY LOCAL PROTECTOR, EDUCATOR, AND RESPONDER
(HELPER) ACT
Attachment: 1. Bill Text
RECOMMENDATION
Staff is seeking City Council direction on S.1514 and H.R.3170 - Homes for Every Local Protector, Educator, and Responder (HELPER) Act. The City Council may decide to support the legislation as written, support if the legislation is amended, remain neutral, oppose, or oppose unless amended.
INTRODUCTION
This item seeks City Council direction on the HELPER Act as the Beverly Hills City Council Legislative/Lobby Committee (Vice Mayor Gold and Councilmember Mirisch) did not reach a consensus on providing a recommendation to the City Council for a position on the HELPER Act at their June 14, 2023 meeting.
DISCUSSION
Each year, the City establishes a Legislative Platform (“Platform”) which embodies key legislative themes and priorities for the upcoming year. Legislative bills that do not align with the City’s adopted Platform are considered first by the Beverly Hills City Council Legislative/Lobby Committee (“Committee”) and then presented to the City council for concurrence.
On June 14, 2023, the Committee met to discuss a variety of federal and state legislative bills. One of the items presented to the Committee was the HELPER Act, a federal bill currently under consideration in both the House of Representatives and the United States Senate with concurrent bills. The Committee did not reach a consensus on this federal bill; therefore, it is being presented to the City Council for direction.
G-3
Meeting Date: June 27, 2023
Background
The HELPER Act of 2023 proposed in both the House of Representatives and the United States Senate is a mortgage program which exempts first-time home buyers who are teachers, firefighters, and law enforcement officers from both down payment and mortgage insurance requirements.
As of June 17, 2023, the HELPER Act has not yet passed out of either the House of Representatives or the United States Senate. The HELPER Act is one of several government programs for first-time buyers currently being considered by Congress.
The HELPER Act is an affordable housing bill with bipartisan support and traction. The self-funding bill has dozens of co-sponsors in the House and the Senate. It does not cost taxpayers money. Congress is expected to pass The HELPER Act into law in the current legislative cycle. It is anticipated President Biden would sign the HELPER Act as, when he announced his forthcoming presidential campaign, President Biden pledged to address “unfinished business” from his current term as President, which includes creating new, affordable housing opportunities for all Americans who want them.
What is the HELPER Act
The HELPER Act is a mortgage program for first-time home buyers who are first responders and educators. The HELPER Act provides 100 percent financing with no monthly mortgage insurance required. Eligible home buyers are required to meet the following criteria:
• 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 at least another 12 months;
• Must be purchasing a one-unit primary residence, including single-family homes, condominiums, and manufactured homes permanently affixed to a lot. The purchase of 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; and • Must be a first-time home buyer, defined as not owning a home for the prior three years.
The HELPER Act does not 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.
How does the HELPER Act Mortgage Work
The HELPER Act mortgage is a standard FHA mortgage with three essential modifications.
1. Replaces the FHA’s three and one-half percent down payment requirement with a no-money-down option
2. Removes the buyer’s obligation to pay monthly mortgage insurance premiums
3. Raises the buyer’s FHA upfront mortgage insurance premium to at least three percent
Meeting Date: June 27, 2023
HELPER Act mortgages make homes more affordable by eliminating the FHA’s down payment and mortgage insurance requirements. Typically, first-time home buyers use funds from a savings account or a 401(k) to make a down payment one a home. Under the HELPER Act, eligible buyers can leave money in the bank for emergencies, to earn interest, or furnish a new home instead.
Furthermore, it is it easier for teachers and first responders to qualify on a low-tomoderate household income to buy a home as the HELPER Act exempts these buyers from making monthly mortgage insurance payments. There are other benefits offered with the HELPER Act FHA mortgages, including:
• Buyers can choose from fixed-rate and adjustable-rate mortgage options; • Buyers can be pre-approved with credit scores of 500 or higher; • Income requirements are more flexible compared to other mortgage types; and • The FHA loans are assumable mortgages.
Recommendation of the Committee
The HELPER Act was presented to the Committee at the request of Mayor Gold who had received a request by the U.S. Conference of Mayors for the City to consider supporting the bill. At the June 14 meeting, the City’s federal lobbyist provided an overview of the HELPER Act to the Committee.
After the presentation, Councilmember Mirisch voiced his support for the bill but requested the City support the bill if amended to add military personnel as being eligible for participation in this program. Additionally, Councilmember Mirisch wanted to add means testing for all applicants.
Mayor Gold voiced his support for the bill as currently written.
Due to the Committee not reaching a consensus on this bill, this item is being presented to the City Council for direction.
FISCAL IMPACT
There is no fiscal impact to the City regardless of which direction the City Council recommends on the HELPER Act.
Gabriella Yap
Senior Policy & Management
Administrator, Public Safety
Approved By
Attachment 1
II
118TH CONGRESS
1ST SESSION S. 1514
To amend the National Housing Act to establish a mortgage insurance program for first responders, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MAY 10, 2023
Mr. RUBIO (for himself, Mr. OSSOFF, Mr. BROWN, Mr. WARNOCK, Mr.
MENENDEZ, Ms. CORTEZ MASTO, and Mr. BLUMENTHAL) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To amend the National Housing Act to establish a mortgage insurance program for first responders, and for other
purposes.
1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Homes for Every Local
5 Protector, Educator, and Responder Act of 2023’’ or the 6 ‘‘HELPER Act of 2023’’.
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2 •S 1514 IS
1 SEC. 2. FHA MORTGAGE INSURANCE PROGRAM FOR MORT2 GAGES FOR FIRST RESPONDERS. 3 Section 203 of the National Housing Act (12 U.S.C.
4 1709) is amended by adding at the end the following:
5 ‘‘(z) FHA MORTGAGE INSURANCE PROGRAM FOR
6 MORTGAGES FOR FIRST RESPONDERS.—
7 ‘‘(1) DEFINITIONS.—In this subsection:
8 ‘‘(A) FIRST RESPONDER.—The term ‘first
9 responder’ means an individual who is, as at10 tested by the individual— 11 ‘‘(i)(I) employed full-time by a law en12 forcement agency of the Federal Govern13 ment, a State, a Tribal government, or a 14 unit of general local government; and
15 ‘‘(II) in carrying out such full-time
16 employment, sworn to uphold, and make
17 arrests for violations of, Federal, State,
18 county, township, municipal, or Tribal
19 laws, or authorized by law to supervise
20 sentenced criminal offenders or individuals
21 with pending criminal charges;
22 ‘‘(ii) employed full-time as a fire23 fighter, paramedic, or emergency medical 24 technician by a fire department or emer25 gency medical services responder unit of 26 the Federal Government, a State, a Tribal
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3 •S 1514 IS
1 government, or a unit of general local gov2 ernment; or 3 ‘‘(iii) employed as a full-time teacher
4 by a State-accredited public school or pri5 vate school that provides direct services to 6 students in grades pre-kindergarten
7 through 12.
8 ‘‘(B) FIRST-TIME HOMEBUYER.—The term
9 ‘first-time homebuyer’ has the meaning given
10 the term in section 104 of the Cranston-Gon11 zalez National Affordable Housing Act (42 12 U.S.C. 12704).
13 ‘‘(C) STATE.—The term ‘State’ has the
14 meaning given the term in section 201.
15 ‘‘(D) TRIBAL GOVERNMENT.—The term
16 ‘Tribal government’ means the recognized gov17 erning body of any Indian or Alaska Native 18 tribe, band, nation, pueblo, village, community,
19 component band, or component reservation, in20 dividually identified (including parenthetically) 21 in the list published most recently pursuant to
22 section 104 of the Federally Recognized Indian
23 Tribe List Act of 1994 (25 U.S.C. 5131).
24 ‘‘(2) AUTHORITY.—The Secretary may, upon
25 application by a mortgagee, insure any mortgage eliVerDate Sep 11 2014 06:07 May 19, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1514.IS S1514 kjohnson on DSK79L0C42PROD with BILLS
4 •S 1514 IS
1 gible for insurance under this subsection to an eligi2 ble mortgagor and, upon such terms and conditions 3 as the Secretary may prescribe, make commitments
4 for the insurance of such mortgages prior to the
5 date of their execution or disbursement.
6 ‘‘(3) MORTGAGE TERMS; MORTGAGE INSURANCE
7 PREMIUM.—
8 ‘‘(A) TERMS.—
9 ‘‘(i) IN GENERAL.—A mortgage in10 sured under this subsection shall— 11 ‘‘(I) be made to an eligible mort12 gagor;
13 ‘‘(II) comply with the require14 ments established under paragraphs 15 (1) through (7) of subsection (b); and
16 ‘‘(III) be used only to—
17 ‘‘(aa) purchase or repair a
18 1-family residence, including a 1-
19 family dwelling unit in a condo20 minium project, to serve as a 21 principal residence of the mort22 gagor, as attested by the mort23 gagor; or 24 ‘‘(bb) purchase a principal
25 residence of the mortgagor, as atVerDate Sep 11 2014 06:07 May 19, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1514.IS S1514 kjohnson on DSK79L0C42PROD with BILLS
5 •S 1514 IS
1 tested by the mortgagor, which
2 is—
3 ‘‘(AA) a manufactured
4 home to be permanently af5 fixed to a lot that is owned 6 by the mortgagor and titled
7 as real property; or
8 ‘‘(BB) a manufactured
9 home and a lot to which the
10 home will be permanently
11 affixed that is titled as real
12 property.
13 ‘‘(ii) NO DOWN PAYMENT.—Notwith14 standing any provision to the contrary in 15 the matter following subsection (b)(2)(B)
16 with respect to first-time homebuyers—
17 ‘‘(I) the Secretary may insure
18 any mortgage that involves an original
19 principal obligation (including allow20 able charges and fees and the pre21 mium pursuant to subparagraph (B) 22 of this paragraph) in an amount not
23 to exceed 100 percent of the appraised
24 value of the property involved; and
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6 •S 1514 IS
1 ‘‘(II) the mortgagor of a mort2 gage described in subclause (I) shall 3 not be required to pay any amount, in
4 cash or its equivalent, on account of
5 the property.
6 ‘‘(B) MORTGAGE INSURANCE PREMIUM.—
7 ‘‘(i) UP-FRONT PREMIUM.—The Sec8 retary shall establish and collect an insur9 ance premium in connection with mort10 gages insured under this subsection that is 11 a percentage of the original insured prin12 cipal obligation of the mortgage amount, 13 which shall be collected at the time and in
14 the manner provided under subsection
15 (c)(2)(A), except that the premiums col16 lected under this subparagraph— 17 ‘‘(I) may be in an amount that
18 exceeds 3 percent of the amount of
19 the original insured principal obliga20 tion of the mortgage; and 21 ‘‘(II) may be adjusted by the
22 Secretary from time to time by in23 creasing or decreasing such percent24 ages as the Secretary considers nec25 essary, based on the performance of VerDate Sep 11 2014 06:07 May 19, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1514.IS S1514 kjohnson on DSK79L0C42PROD with BILLS
7 •S 1514 IS
1 mortgages insured under this sub2 section and market conditions. 3 ‘‘(ii) PROHIBITION OF MONTHLY PRE4 MIUMS.—A mortgage insured under this 5 subsection shall not be subject to a month6 ly insurance premium, including a pre7 mium under subsection (c)(2)(B). 8 ‘‘(4) ELIGIBLE MORTGAGORS.—The mortgagor
9 for a mortgage insured under this subsection shall,
10 at the time the mortgage is executed—
11 ‘‘(A) be a first-time homebuyer;
12 ‘‘(B) have completed a program of housing
13 counseling provided through a housing coun14 seling agency approved by the Secretary; 15 ‘‘(C) as attested by the mortgagor—
16 ‘‘(i) be employed as a first responder;
17 ‘‘(ii) have been—
18 ‘‘(I) employed as a first re19 sponder for not less than 4 of the 5 20 years preceding the date on which the
21 mortgagor submitted an application to
22 insure the mortgage under this sec23 tion; or
24 ‘‘(II) released from employment
25 as a first responder due to an occupaVerDate Sep 11 2014 06:07 May 19, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1514.IS S1514 kjohnson on DSK79L0C42PROD with BILLS
8 •S 1514 IS
1 tion-connected disability resulting
2 from such duty or employment;
3 ‘‘(iii) be in good standing as a first re4 sponder and not on probation or under in5 vestigation for conduct that, if determined 6 to have occurred, is grounds for termi7 nation of employment; 8 ‘‘(iv) in good faith intend to continue
9 as a first responder for not less than 1
10 year following the date of closing on the
11 mortgage; and
12 ‘‘(v) have previously never been the
13 mortgagor under a mortgage insured under
14 this subsection;
15 ‘‘(D) meet such requirements as the Sec16 retary shall establish to ensure that insurance 17 of the mortgage represents an acceptable risk to
18 the Mutual Mortgage Insurance Fund; and
19 ‘‘(E) meet such underwriting requirements
20 as the Secretary shall establish to meet actu21 arial objectives identified by the Secretary, 22 which may include avoiding a positive subsidy
23 rate or complying with the capital ratio require24 ment under section 205(f)(2).
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9 •S 1514 IS
1 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—
2 There is authorized to be appropriated to carry out
3 the program under this subsection—
4 ‘‘(A) $660,000 for fiscal year 2024, to re5 main available until expended; and 6 ‘‘(B) $160,000 for each of fiscal years
7 2025 through 2030, to remain available until
8 expended.
9 ‘‘(6) REAUTHORIZATION REQUIRED.—The au10 thority to enter into new commitments to insure 11 mortgages under this subsection shall expire on the
12 date that is 5 years after the date on which the Sec13 retary first makes available insurance for mortgages 14 under this subsection.’’.
Æ
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I
118TH CONGRESS
1ST SESSION H. R. 3170
To amend the National Housing Act to establish a mortgage insurance program for first responders, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 10, 2023
Mr. RUTHERFORD (for himself and Mrs. WATSON COLEMAN) introduced the following bill; which was referred to the Committee on Financial Services A BILL
To amend the National Housing Act to establish a mortgage insurance program for first responders, and for other
purposes.
1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Homes for Every Local
5 Protector, Educator, and Responder Act of 2023’’ or the 6 ‘‘HELPER Act of 2023’’.
7 SEC. 2. FHA MORTGAGE INSURANCE PROGRAM FOR MORT8 GAGES FOR FIRST RESPONDERS. 9 Section 203 of the National Housing Act (12 U.S.C.
10 1709) is amended by adding at the end the following:
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2 •HR 3170 IH
1 ‘‘(z) FHA MORTGAGE INSURANCE PROGRAM FOR
2 MORTGAGES FOR FIRST RESPONDERS.—
3 ‘‘(1) DEFINITIONS.—In this subsection:
4 ‘‘(A) FIRST RESPONDER.—The term ‘first
5 responder’ means an individual who is, as at6 tested by the individual— 7 ‘‘(i)(I) employed full-time by a law en8 forcement agency of the Federal Govern9 ment, a State, a Tribal government, or a 10 unit of general local government; and
11 ‘‘(II) in carrying out such full-time
12 employment, sworn to uphold, and make
13 arrests for violations of, Federal, State,
14 county, township, municipal, or Tribal
15 laws, or authorized by law to supervise
16 sentenced criminal offenders or individuals
17 with pending criminal charges;
18 ‘‘(ii) employed full-time as a fire19 fighter, paramedic, or emergency medical 20 technician by a fire department or emer21 gency medical services responder unit of 22 the Federal Government, a State, a Tribal
23 government, or a unit of general local gov24 ernment; or VerDate Sep 11 2014 03:59 May 20, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3170.IH H3170 kjohnson on DSK79L0C42PROD with BILLS
3 •HR 3170 IH
1 ‘‘(iii) employed as a full-time teacher
2 by a State-accredited public school or pri3 vate school that provides direct services to 4 students in grades pre-kindergarten
5 through 12.
6 ‘‘(B) FIRST-TIME HOMEBUYER.—The term
7 ‘first-time homebuyer’ has the meaning given
8 the term in section 104 of the Cranston-Gon9 zalez National Affordable Housing Act (42 10 U.S.C. 12704).
11 ‘‘(C) STATE.—The term ‘State’ has the
12 meaning given the term in section 201.
13 ‘‘(D) TRIBAL GOVERNMENT.—The term
14 ‘Tribal government’ means the recognized gov15 erning body of any Indian or Alaska Native 16 tribe, band, nation, pueblo, village, community,
17 component band, or component reservation, in18 dividually identified (including parenthetically) 19 in the list published most recently pursuant to
20 section 104 of the Federally Recognized Indian
21 Tribe List Act of 1994 (25 U.S.C. 5131).
22 ‘‘(2) AUTHORITY.—The Secretary may, upon
23 application by a mortgagee, insure any mortgage eli24 gible for insurance under this subsection to an eligi25 ble mortgagor and, upon such terms and conditions VerDate Sep 11 2014 03:59 May 20, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3170.IH H3170 kjohnson on DSK79L0C42PROD with BILLS
4 •HR 3170 IH
1 as the Secretary may prescribe, make commitments
2 for the insurance of such mortgages prior to the
3 date of their execution or disbursement.
4 ‘‘(3) MORTGAGE TERMS; MORTGAGE INSURANCE
5 PREMIUM.—
6 ‘‘(A) TERMS.—
7 ‘‘(i) IN GENERAL.—A mortgage in8 sured under this subsection shall— 9 ‘‘(I) be made to an eligible mort10 gagor;
11 ‘‘(II) comply with the require12 ments established under paragraphs 13 (1) through (7) of subsection (b); and
14 ‘‘(III) be used only to—
15 ‘‘(aa) purchase or repair a
16 1-family residence, including a 1-
17 family dwelling unit in a condo18 minium project, to serve as a 19 principal residence of the mort20 gagor, as attested by the mort21 gagor; or 22 ‘‘(bb) purchase a principal
23 residence of the mortgagor, as at24 tested by the mortgagor, which 25 is—
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5 •HR 3170 IH
1 ‘‘(AA) a manufactured
2 home to be permanently af3 fixed to a lot that is owned 4 by the mortgagor and titled
5 as real property; or
6 ‘‘(BB) a manufactured
7 home and a lot to which the
8 home will be permanently
9 affixed that is titled as real
10 property.
11 ‘‘(ii) NO DOWN PAYMENT.—Notwith12 standing any provision to the contrary in 13 the matter following subsection (b)(2)(B)
14 with respect to first-time homebuyers—
15 ‘‘(I) the Secretary may insure
16 any mortgage that involves an original
17 principal obligation (including allow18 able charges and fees and the pre19 mium pursuant to subparagraph (B) 20 of this paragraph) in an amount not
21 to exceed 100 percent of the appraised
22 value of the property involved; and
23 ‘‘(II) the mortgagor of a mort24 gage described in subclause (I) shall 25 not be required to pay any amount, in
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6 •HR 3170 IH
1 cash or its equivalent, on account of
2 the property.
3 ‘‘(B) MORTGAGE INSURANCE PREMIUM.—
4 ‘‘(i) UP-FRONT PREMIUM.—The Sec5 retary shall establish and collect an insur6 ance premium in connection with mort7 gages insured under this subsection that is 8 a percentage of the original insured prin9 cipal obligation of the mortgage amount, 10 which shall be collected at the time and in
11 the manner provided under subsection
12 (c)(2)(A), except that the premiums col13 lected under this subparagraph— 14 ‘‘(I) may be in an amount that
15 exceeds 3 percent of the amount of
16 the original insured principal obliga17 tion of the mortgage; and 18 ‘‘(II) may be adjusted by the
19 Secretary from time to time by in20 creasing or decreasing such percent21 ages as the Secretary considers nec22 essary, based on the performance of 23 mortgages insured under this sub24 section and market conditions.
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7 •HR 3170 IH
1 ‘‘(ii) PROHIBITION OF MONTHLY PRE2 MIUMS.—A mortgage insured under this 3 subsection shall not be subject to a month4 ly insurance premium, including a pre5 mium under subsection (c)(2)(B). 6 ‘‘(4) ELIGIBLE MORTGAGORS.—The mortgagor
7 for a mortgage insured under this subsection shall,
8 at the time the mortgage is executed—
9 ‘‘(A) be a first-time homebuyer;
10 ‘‘(B) have completed a program of housing
11 counseling provided through a housing coun12 seling agency approved by the Secretary; 13 ‘‘(C) as attested by the mortgagor—
14 ‘‘(i) be employed as a first responder;
15 ‘‘(ii) have been—
16 ‘‘(I) employed as a first re17 sponder for not less than 4 of the 5 18 years preceding the date on which the
19 mortgagor submitted an application to
20 insure the mortgage under this sec21 tion; or
22 ‘‘(II) released from employment
23 as a first responder due to an occupa24 tion-connected disability resulting 25 from such duty or employment;
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8 •HR 3170 IH
1 ‘‘(iii) be in good standing as a first re2 sponder and not on probation or under in3 vestigation for conduct that, if determined 4 to have occurred, is grounds for termi5 nation of employment; 6 ‘‘(iv) in good faith intend to continue
7 as a first responder for not less than 1
8 year following the date of closing on the
9 mortgage; and
10 ‘‘(v) have previously never been the
11 mortgagor under a mortgage insured under
12 this subsection;
13 ‘‘(D) meet such requirements as the Sec14 retary shall establish to ensure that insurance 15 of the mortgage represents an acceptable risk to
16 the Mutual Mortgage Insurance Fund; and
17 ‘‘(E) meet such underwriting requirements
18 as the Secretary shall establish to meet actu19 arial objectives identified by the Secretary, 20 which may include avoiding a positive subsidy
21 rate or complying with the capital ratio require22 ment under section 205(f)(2). 23 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—
24 There is authorized to be appropriated to carry out
25 the program under this subsection—
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9 •HR 3170 IH
1 ‘‘(A) $660,000 for fiscal year 2024, to re2 main available until expended; and 3 ‘‘(B) $160,000 for each of fiscal years
4 2025 through 2030, to remain available until
5 expended.
6 ‘‘(6) REAUTHORIZATION REQUIRED.—The au7 thority to enter into new commitments to insure 8 mortgages under this subsection shall expire on the
9 date that is 5 years after the date on which the Sec10 retary first makes available insurance for mortgages 11 under this subsection.’’.
Æ
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