HR-10524-119
Referred to the House Committee on Financial Services.
Sponsored by Ryan Mackenzie (R-PA)
What it does
The bill would allow the HUD Secretary to insure FHA mortgages with no down payment (up to 100 percent of appraised value) for first-time homebuyers who work as first responders, 911 dispatchers, correctional officers or prison guards, or child care workers. Borrowers would have to complete housing counseling and attest that the home is their principal residence. Loans would carry an up-front premium that may exceed 3 percent and could not carry a monthly premium. The bill would authorize $660,000 for fiscal year 2026 and $160,000 a year for fiscal years 2027-2032. Authority to make new insurance commitments would expire 5 years after the program starts. The bill's definition of first responder also covers full-time teachers, and other limits apply.
Who benefits
First-time homebuyers employed as law enforcement officers, firefighters, paramedics, EMTs (including volunteers), 911 call center operators and dispatchers, correctional officers, and licensed or registered child care workers, who could buy a home without saving a down payment. Teachers may qualify through the first responder definition. Lenders gain FHA insurance on these loans. Communities may benefit if public service workers can live nearby.
Who is hurt
Taxpayers and FHA's Mutual Mortgage Insurance Fund could bear losses if 100 percent financed loans default more often than projected. Borrowers pay a higher up-front premium, which may exceed 3 percent and could be financed into the loan, leaving little equity. Other first-time buyers in different occupations are not eligible. Buyers with no down payment could be exposed to negative equity if prices fall. HUD would bear added administrative work, and the 5-year authority could leave the program uncertain.
Supporters argue
Supporters argue that the down payment is the biggest barrier for workers in modest-paying public service jobs who are needed locally, and that housing counseling plus employment and good-standing requirements reduce risk. They contend the Secretary's power to adjust the up-front premium and set underwriting rules, including to avoid a positive subsidy rate, lets the program be designed to protect the insurance fund while widening access to ownership.
Opponents argue
Opponents argue that 100 percent financing leaves borrowers with no equity cushion and raises default risk, putting the FHA insurance fund and taxpayers at risk if home prices drop. They contend that favoring selected occupations is arbitrary compared with other moderate-income buyers, that the high up-front premium raises borrowers' costs, and that expanding no-down-payment loans may add to housing demand and prices.
Constitutional context
Congress creates this program under its Spending Clause and Necessary and Proper Clause powers (Art. I, §8), as with the existing FHA insurance programs. It raises no clear constitutional question, and occupational eligibility criteria are subject only to deferential rational-basis review under the Fifth Amendment's due process guarantee.
Checks and balances
The bill gives the executive branch (HUD Secretary) discretion over premiums, underwriting and terms, while Congress keeps control through limited appropriations, a 5-year sunset requiring reauthorization, and committee oversight.
Historical precedent
The Helping Heroes Own Property-style proposals and the existing FHA first-time buyer programs, as well as the earlier HELPER Act proposals, are the closest analogues, though no enacted program has offered FHA no-down-payment insurance limited to these occupations.