Teachers shape the children that will be our tomorrow. They work hard day and night not only to educate but also to enlighten children on how to become responsible adults. Today, teachers are known as heroes. They do so much for the community that they deserve something for it. Luckily, there are many home loans for teachers that have benefits other borrowers would not receive.
If you are a teacher and want to find a home that you can afford within your community, consider one of the following programs that are backed by many of the government programs you’ve likely already heard of but didn’t know what they offered.
The Good Neighbor Next Door Program
HUD offers a unique program that helps teachers buy a home within their community and for half of the listed price. This program is helpful for teachers as well as the community as the homes are located in a revitalization area. In other words, teachers buy and occupy foreclosed homes that HUD owns to help turn the area around. In exchange for the commitment to live in the home as your own, HUD will offer you the home for 50% of the listed price.
Here’s how it works:
- You must be a certified teacher for ages pre-K to 12th grade
- You must agree to live in the home for 36 straight months as your owner-occupied property
- The home must be owned by HUD and in a revitalization area
- You cannot own another home
If you meet the above requirements, you can secure financing through the FHA. You won’t need the typical 3.5% down payment, though. You can put down as little as $100 on the home. You can even wrap your closing costs into the loan if you don’t have the cash to pay them.
You don’t receive the 50% discount right away. HUD puts a silent second mortgage on your property when you buy it. You don’t make any payments on the loan. As long as you live in the home for at least 36 months straight, HUD will forgive the loan. At the end of the 3 years, you are free to move or stay in the home. If you do sell it, the profit you make is yours to keep.
A word of caution, though, if you move before the 3 years are up, you will owe a prorated portion of the silent second mortgage. You will pay 1/36th of the full amount for each month that you leave the home early.
The Teacher Next Door Program
The Teacher Next Door Program offers assistance with the down payment on your home. It may also offer grants for closing costs in your area. You don’t have to buy a specific home or live in a certain area. The grants are specifically to help teachers get into the home they want.
You do not have to pay the grant back that you receive from Teacher Next Door. You can use the grants to cover the closing costs on your loan. The Down Payment Assistance program is to help teachers have money to put down on the home, but it could be a loan that you have to repay. The actual terms of the program will depend on the lender providing it.
The Teacher Next Door Program is meant to make it easier for teachers to buy a home. Real estate professionals are encouraged to help teachers find the best deals on a home along with help them apply for the grants and down payment assistance. The thought is that having teachers in the community that they live can create a feeling of togetherness and can sidestep any issues of a community taking a downhill turn and becoming a revitalization area.
While FHA loans aren’t specifically for teachers, they are a great program for teachers that work side-by-side with many of the programs above.
FHA loans have flexible underwriting guidelines and low down payment requirements. Typically, you can qualify for an FHA loan with the following:
- Minimum 580 credit score
- Maximum 31% front-end ratio
- Maximum 41% back-end ratio
- Stable employment for at least 2 years
- Verifiable income
- 5% down payment (except for the Good Neighbor Next Door program)
Any of these home loans for teachers can help you get the most for your money. If it’s your desire to live in the community that you teach, HUD and various other lenders make it easy for teachers to use their benefits.Click to See the Latest Mortgage Rates»