Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
The Teacher Next Door Program is a program that is designed to help school teachers purchase homes at a discounted rate. It is a program that was designed by the Department of Housing and Urban Development, or HUD. This is a government agency that works to develop underprivileged areas. With this program, a teacher can purchase a property that is owned by HUD for 50 percent of the purchase price. This means that if a property is listed for $200,000, a teacher can actually purchase this house for $100,000. If you are a teacher, research this program before you purchase a house.
Any teacher that teaches for a class between kindergarten and 12th grade can qualify for this program. When you apply for this program, you are going to need to be able to prove that you work in the school district where you are buying the home. Once you purchase the house, you are going to have to live in it for three years. If you do not live in the property as your primary residence for a full three years, then you will have to come up with the additional money for the original purchase price. Also, the home must be occupied by you and you cannot own any other houses when you get involved with this property. This is not a program that can be used for speculative real estate investment, such as buying rental property or vacation homes.
You are required to have a second mortgage on the discounted amount. You are not going to have to make any payments on this mortgage, and no interest is going to accrue. Once you have lived in the house for at least three years, HUD will pay off a portion of the mortgage for you. You will never have to worry about the second, unless you do not live in the home for the specified time period.
Finding a Property
You can find many different properties that are owned by HUD by visiting the website. You can sort through hundreds of different properties that are owned by HUD. You will need to focus on certain zip codes and can look for something that fits your price range. You must hire a realtor to make an offer on a property. Be sure the realtor is approved with HUD because HUD will not accept offers unless they are. The agent will place the offer online and you will need to wait for a reply.
Location of Property
One of the biggest problems with this program ist that many teachers do not work where they want to live. HUD has strict rules about the mileage from the house to the location of employment. The idea behind the program is that teachers within the community can make a difference to students and the overall community. There are similar programs offered by HUD, such as the Officer Next Door Program, that work to improve community relations.
- FHA Loans for a First-Time Home Buyer
- Low Down Payment Loan Qualification
- 3 Common Short Sale Mistakes
- 3 Warning Signs of Loan Modification Scams
- Alternatives to Getting a 2nd Mortgage
- Home Equity Loans for People with Bad Credit
- What To Do When Mortgages Default
- FHA Eligibility with Bankruptcy and Foreclosure
- How to Get Approved for an FHA Loan despite Bad Credit