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Given today’s home prices, buying a home on a teacher’s salary ain’t easy. If you’re a teacher and aspiring home buyer, you should know that many home loans are specifically designed for educators to help them purchase real estate. And you can also take advantage of mortgage assistance programs to help make buying a home even more affordable.
Use our guide to learn about the various teacher home buying programs that can help you qualify for low-cost mortgages.
Teacher Home Buying Programs
If you’re feeling stressed about saving up for a home or being able to afford your monthly mortgage payments, there are mortgage programs available to help teachers achieve homeownership.
Check out some of the most popular programs below:
1. Good Neighbor Next Door mortgages
If you’re a civil servant, like a police officer, a firefighter, an EMT or – of course – a teacher, consider the Good Neighbor Next Door Sales program for mortgage assistance. The Department of Housing and Urban Development (HUD) manages the program, which offers borrowers a 50% discount on the list price of a home.
You must be a full-time pre-K through 12th-grade teacher at a state-accredited school. You can only use the 50% discount on a home located in a HUD-designated revitalization area. And you must use the home as your primary residence for at least 3 years.
2. Teacher Next Door mortgages
The Teacher Next Door (TND) program is a nationwide program that specializes in home grants and down payment assistance for educators and other public service professionals. You can choose almost any home. But the max amount of assistance you receive can vary by location.
Right now, the maximum grant TND offers is $8,000. And the maximum down payment assistance is $10,681.
You can also qualify for no application fees, no broker fees, better interest rates and free home appraisals.
To qualify for TND assistance, you must teach at a state-accredited school, though certain non-teaching school employees are eligible.
3. Homes For Heroes®
Public servants like teachers, military and health care professionals can use the Homes For Heroes® program to get special savings on homes.
What you can save will vary because the amount you receive will be based on the home’s list price and whether you choose to work with Homes For Heroes® real estate, mortgage, title and inspection specialists.
On average, Homes For Heroes® helps home buyers save $3,000 on closing costs and related fees.
4. Teachers unions
Teachers unions offer a variety of benefits to their members. Not every union offers mortgage assistance, but two of the largest teachers unions in the country – the American Federation of Teachers and the United Federation of Teachers – do.
American Federation of Teachers (AFT)
AFT offers a loan program to help teachers unlock homeownership with better rates and reduced fees. First-time home buyers can even qualify for 5% down payments.
AFT mortgage loan programs aren’t available in every state; requirements and qualifications can vary from lender to lender.
United Federation of Teachers (UFT)
The United Federation of Teachers (UFT) offers discounts and mortgage assistance programs to members through affiliated lenders. Program requirements and availability will vary. You’ll need to research what they are in your area.
5. Teacher credit unions
A credit union is a nonprofit, member-owned financial institution that operates much like a traditional bank.
A teachers credit union extends its membership and benefits to educators and their families. Some of these benefits include better loan terms and lower interest rates, relaxed mortgage qualifications and access to a home loan officer.
See if the teachers credit union you’re interested in offers home buying assistance programs.
6. Programs for first-time home buyers
If mortgage programs for teachers don’t work for you, you may qualify for first-time home buyer programs.
First-time home buyers can save on down payments, closing costs and other fees related to buying a home with programs like Fannie Mae HomeReady® and Freddie Mac Home Possible®.
7. Government-backed mortgages for teachers
Government-backed mortgages are home loans insured by federal agencies that help lower-income or first-time home buyers access affordable options.
Teachers in certain income brackets may qualify for government-backed loans, including FHA loans, VA loans and USDA loans.
Federal Housing Administration (FHA) loans help home buyers with credit issues and limited savings purchase a new home. You could qualify for a 3.5% down payment depending on your credit score.
FHA loans typically offer lower interest rates, saving you money over the long term. But depending on the size of your down payment, FHA loans also require borrowers to pay a mortgage insurance premium (MIP) for 11 years or the life of the loan.
You must move into the home within 60 days of closing and use the home as your primary residence for at least a year.
Teachers who are also veterans, active-duty service members, or surviving spouses may qualify for a Department of Veterans Affairs (VA) loan.
VA loans offer lenient borrowing requirements, lower interest rates and low or no down payments. And there is no limit on how much you can borrow to purchase a home.
To prove to your lender that you qualify for a VA loan, you’ll need to submit a Certificate of Eligibility (COE).
U.S. Department of Agriculture (USDA) loans are tailored to lower-income borrowers who want to purchase a home in a rural area approved by the USDA. USDA loans require 0% down and allow borrowers to build, buy or renovate a property.
To qualify, you’ll need fair-to-average credit, a debt-to-income (DTI) ratio of 41% or less, and your income can’t exceed 115% of the median household income in the area where you’re purchasing the home.
A Helping Hand for Teachers
Buying a home on a teacher’s salary can be challenging – but help is out there. Take advantage of teacher-targeted mortgages or traditional home loans that can help you become a homeowner at a price you can afford. In addition to discounts and mortgage programs, don’t forget to research down payment assistance programs that can help make buying a home even more affordable.
Take the first step toward buying a home.
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The Short Version
- There are mortgage programs available to help teachers achieve homeownership
- If mortgage programs for teachers don’t work for you, you may qualify for first-time home buyer programs
- Teachers who are also veterans, active-duty service members or surviving spouses may qualify for a Department of Veterans Affairs (VA) loan
U.S. Department of Housing and Urban Development. “HUD Good Neighbor Eligible Participants.” Retrieved December 2022 from https://www.hud.gov/program_offices/housing/sfh/reo/goodn/particip
U.S. Department of Housing and Urban Development. “HUD Good Neighbor Next Door Program.” Retrieved December 2022 from https://www.hud.gov/program_offices/housing/sfh/reo/goodn/gnndabot