February 29, 2024

Teacher Next Door Program and Other Home Loans for Teachers

Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

  • Homebuying assistance specific to teachers includes the Teacher Next Door, Good Neighbor Next Door, and Homes for Heroes programs.
  • But educators may find similar or even better assistance using programs available to all buyers.
  • Low down payments loans, grants, and flexible credit requirements can help make homeownership more accessible for teachers. 

Getting a mortgage as a teacher can be tough, particularly if you still have student loan debt to pay off. Fortunately, there are programs to help make buying a home possible.

Whether you’re looking for down payment assistance, lender discounts, or more lenient credit requirements, there are plenty of options available to help teachers achieve their homeownership goals. Here’s what to know about the Teacher Next Door program and other programs or home loans for teachers.

Are there home loans for teachers?

Teachers who are looking to become homeowners have a wide array of options available to help them, including both teacher-specific programs and more general first-time homebuyer loans

Some teacher-specific homebuyer assistance includes Teacher Next Door, Good Neighbor Next Door, Home for Heroes, or benefits through your teachers union. Your state or city may also have homebuyer programs specifically geared toward teachers. Check your local housing authority’s website to see what’s available to you.

But you may have better luck looking at mortgages available to all borrowers, regardless of profession. There are more of these programs available, and many of them come with bigger benefits than what you’ll find with some profession-specific programs.

How does the Teacher Next Door program work?

Teacher Next Door is a program for homebuyers that’s available to teachers as well as other school personnel, including administrators, office staff, lunchroom workers, custodians, and paraprofessionals.

“Affordable housing is a major concern for everyone, including teachers,” says Stephen Parks, the national director of the Next Door programs, which includes Teacher Next Door. “Many times, the grants and other assistance we provide is the difference maker in a purchasing new home for their family.”

Through this program, eligible professionals can get a grant of up to $8,000, which doesn’t have to be repaid. Teacher Next Door will also help connect you to local down payment assistance programs and says participants can get as much as $10,681 in down payment assistance.

Teacher Next Door is sometimes confused with the Good Neighbor Next Door program, which is overseen by the US Department of Housing and Urban Development. But these are two completely separate programs.

“The Teacher Next Door Program is much more inclusive and flexible than the Good Neighbor Next Door Program, since you may purchase any home on the market, not just in revitalization areas, and there are no minimum residency restrictions,” says Parks.

To get a grant and down payment assistance through Teacher Next Door, you’ll need to work with a real estate agent who’s affiliated with the program and one of the program’s preferred mortgage lenders.

If you’re considering buying a home through the Teacher Next Door program, it’s a good idea to also get your own mortgage rate quotes from other lenders to be sure you’re getting a good deal. 

Teacher Next Door program income limits

The Teacher Next Door program doesn’t have any income limits. However, if you have a higher income, you might not qualify for some of the local down payment assistance programs that Teacher Next Door connects you with. 

Good Neighbor Next Door program for teachers

The Good Neighbor Next Door program offered through HUD lets public servants buy a home at a 50% discount in certain areas. Teachers are eligible for the Good Neighbor Next Door program.

The catch is that the inventory for this program is extremely limited. Not all homes are eligible — it has to be a HUD-owned foreclosed home in a designated “revitalization area,” which are areas that are lower income and have low homeownership rates. As of December 2023, there were only four homes in the entire country that were eligible for the GNND program, according to HUD’s website.

Homes for Heroes program for teachers

Homes for Heroes offers homebuying discounts to teachers and other public service professionals. According to its website, program participants save an average of $3,000 with Homes for Heroes.

To save money with the Homes for Heroes program, you’ll work with homebuying professionals who are affiliated with the program. For example, working with a Homes for Heroes-affiliated real estate agent could save you $700 for every $100,000 of your home’s purchase price. You’ll get your discounts in the form of a check after closing.

Teachers union mortgage benefits

If you belong to a union, you may want to see if it offers discounts with any mortgage lenders or other types of homebuyer assistance.

For example, the American Federation of Teachers has a mortgage program through Amalgamated Bank that includes a discount on your origination fee. AFT members can also get discounts on professional movers or truck rentals.

Low-down-payment home loans for teachers

There are a variety of low- or no-down-payment home loans available to borrowers, including both conventional and government-backed options.

Conventional loan

When you get a mortgage that isn’t backed by a government agency, it’s called a conventional mortgage. Borrowers can get a conventional loan with a down payment as low as 3%.

However, this might not be the best option for you if your credit isn’t great, since lenders typically have stricter standards for conventional loans. You’ll need at least a 620 credit score to qualify for one of these mortgages.

If you have a lower score, you might want to consider your government-backed mortgage options.

FHA loan 

FHA loans are backed by the Federal Housing Administration, and they’re geared toward first-time and low-income homebuyers. 

FHA loans have less stringent credit requirements; you can get one of these mortgages with a score as low as 580 with a 3.5% down payment, or 500 if you can put 10% down.

VA loan

To be eligible for a VA loan, you’ll need to be a veteran or current servicemember who meets minimum service requirements. You’ll also generally need at least a 620 credit score, though it varies depending on your lender.

If you qualify for a VA loan, you’ll be able to get a mortgage with 0% down.

USDA loan

Mortgages backed by the US Department of Agriculture are geared toward borrowers buying in rural areas, though some suburban areas also meet the USDA’s requirements. These mortgages also require no down payment.

To qualify for a USDA loan, you’ll typically need at least a 640 credit score.

First-time homebuyer loans and down payment assistance for teachers

Many of the best mortgage lenders for first-time buyers have their own unique programs that come with features and benefits that make homeownership more accessible to borrowers. This includes things like low down payments, down payment or closing cost grants, or flexible credit requirements.

These products aren’t unique to teachers, though they often do come with income or geographical limits.

As you search for a lender, ask about any affordable loan options they offer.

For example, Chase Mortgage has a loan called the DreaMaker Mortgage. It allows 3% down payments, reduced private mortgage insurance costs, and flexible credit requirements. This mortgage can also be combined with the bank’s Homebuyer Grant, which offers up to $5,000 in down payment or closing cost assistance. Many other major mortgage lenders have similar programs.

Home loans for teachers FAQs

The Teacher Next Door program is a legitimate homebuyer program that can help teachers and other school personnel who are buying a home get grants and down payment assistance. 

Teacher Next Door could be a good option to help you become a homeowner — but there are a wide array of homebuyer assistance programs out there, so it’s a good idea to explore your options first. With the Teacher Next Door program, you’ll be limited to working with a lender affiliated with the program, which might not be ideal if you can get a lower rate from a different mortgage lender.

You might be able to get a discount on your mortgage through your teachers union or a credit union that offers special rates to educators. Check with local lenders in your area to see what’s available to you.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *