Home Mortgage Options and Benefits for Teachers

Teacher in front of blackboard

Teachers are the backbone of society. As an educator, you mold the minds of future leaders. Yet (likely) because of your salary, you may need affordable housing. Buying a home anywhere, especially in metro areas, requires a lot of planning and patience. With rising housing costs, the largest hurdle most home buyers face is finding a way to finance a home. But the good news is there are home loan programs and grants created with teachers in mind.

Mortgage programs for teachers

Good Neighbors Next Door

The U.S. Department of Housing and Urban Development (HUD) offers a variety of home buying assistance programs, including the Good Neighbors Next Door Program. This program was developed to help pre-kindergarten through 12th-grade teachers (and other public servant professionals) become homeowners. It offers a 50% discount on homes listed by HUD in return for committing to live in the property for 36 months.

How do you participate?  First of all, check for eligible homes listed in your state. Then, follow the instructions to submit your interest in buying a specific home. If there are various parties interested in the same home, a random lottery selection will be held. In your case, make sure that you meet the specific requirements for a teacher and comply with HUD’s regulations for the program.

Teacher Next Door

HUD’s Teacher Next Door Program pairs educators with federal, state, and local home loan programs for teachers — including the Good Neighbors Next Door program. It also grants up to $4,170 for teachers and even $6,000 in some areas depending on the cost of living. Not only could you be eligible for the Teacher Next Door program, but you may also have access to another $10,681 in down payment assistance. And there aren’t any upfront, application, or broker fees. But wait, there’s more! Other freebies include free appraisal, home buyer representation, access to MLS listings, nationwide access to foreclosures, discount title fees, and preferred interest rates. Teacher Next Door is designed to match the right teacher with the right home loan program that’s available.

Local programs

Check with your state for home loan teacher programs that aren’t offered federally. Many states offer similar home loan programs for teachers. In many cases, Teacher Next Door can connect qualified home buyers with the appropriate grants and programs, but you can still search for home loans programs for teachers that are unique to your state.

For example, Californian teachers can qualify for the Extra Credit Teacher Home Purchase Program (ECTP). This program grants eligible applicants a deferred, junior loan ranging between $7,500 and $15,000 depending on where the home is being purchased. ECTP requires that teachers be first-time home buyers, employed in a county/continuation or high priority school in California, work in the same school for three years continuously and that a home buyers education course is taken. So be on the lookout for programs specific to your state!

Dedicated teacher housing

In some areas, available housing is set aside just for teachers. While it’s geared more towards renting, teacher-specific housing can provide below market rates or rent discounts that can help you save for a home of your own.

In Dare County, North Carolina, teachers can sign up for affordable teacher housing through the Dare Education Foundation. Here, they offer units that rent below market value. Many states provide similar options for teachers who may not otherwise be able to afford to live in certain school zones.

An affordable apartment residence for teachers and nonprofits in Baltimore, called Union Mill, offers up to a $600 rent discount for teachers. Your local school district or teachers union should have more information on dedicated housing for teachers. Bottom line, the dedicated teacher housing option is a must for teachers preparing to buy a home and are looking for cost savings.

Denver housing market

In the nation’s top 28 housing markets, Denver ranks as the least affordable for teachers, according to a Redfin report. But not mentioned in the report are the different programs and grants available for teachers. If you’re a local teacher — or one relocating to the Denver area and are looking to buy home — there’s light at the end of the tunnel.

CHFA loans

Perfect for teachers in or moving to Colorado: the Colorado Housing and Financing Authority (CHFA) provides a loan program for Coloradan first-time home buyers offering down payment assistance, affordable rates, closing cost support, and more. And, within the CHFA loan, there are a variety of programs that appeal to different borrowers and financial situations. Make sure to speak with a CHFA mortgage consultant to check on eligibility requirements for each individual program to see which one fits your needs.

At American Financing, our salary-based mortgage consultants can help teachers find the right loan and home buying assistance programs that fit their financial needs. We’re a local family-owned mortgage lender that’s been serving the community since 1999. We can use every loan in the industry: FHA, CHFA, VA, Conventional, just to name a few. Known for our excellent service, low rates, and fast closings — American Financing can put you on the surest path to homeownership.