Home Loan Options for Teachers: Where to Find Help

Home loans for teachers can offer steep home price discounts, minimal down payments, low interest rates and waived closing costs, all to help educators afford to live in the neighborhoods they serve. We highlight below federal, state and local programs that can help teachers, as well as pointers on how to tap local resources.

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1. Good Neighbor Next Door program

This program gives a 50% listing price discount to teachers buying homes in revitalization areas. The property must be in the same locality as the students you teach and must be your sole residence for at least 36 months (three years). If you sell or leave the property before that time, you must repay the U.S. Department of Housing and Urban Development (HUD) for half of the home price it covered.

Teachers — pre-K through 12th grade at state-accredited schools — and civic servants like firefighters and emergency medical technicians can also apply. You’ll need:

• A HUD-approved lender
• A licensed real estate agent
• The federal website with state listings

2. Teacher Next Door organization

This private agency provides down payment assistance for up to $10,681 for pre-K through 12th grade classroom teachers and can assign a real estate agent to guide you in several ways:

• • Finding a house

• Matching you with the right loan program
• Applying for homebuying assistance from other organizations

In most regions, grants are also available up to about $6,500 ($8,000 in some areas), which don’t have to be repaid. Eligibility for specific programs will vary, but you can apply online here.

3. Homes for Heroes program

The Homes for Heroes is a national program for teachers — pre-K through college — that could help you save $700 for every $100,000 you spend on a home. When you sign up, you’ll be connected with a real estate expert in your area to help you navigate the homebuying process and lower costs.

4. Government-backed mortgages

As a teacher, you could score a great deal with a “standard mortgage” backed by the government and available to people from all professions. The following options offer lower minimum credit score and/or down payment requirements than a conventional loan:

• FHA loans are backed by the Federal Housing Administration
• VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs
• USDA loans help homebuyers afford property in rural areas and are guaranteed by the U.S. Department of Agriculture

5. Your teachers union

As part of member benefits, your teachers union may partner with a mortgage lender to offer reduced interest rates or private mortgage insurance (PMI), waived fees and other bonuses like expedited loan processing. You can look up your benefits by logging into the American Federation of Teachers website or talking directly with your teachers union.

6. Teacher-focused credit unions

There are dozens of credit unions that specifically serve educators and offer home loans for teachers. You can find local institutions via the National Credit Union Association.

7. Down payment assistance programs

Down payment assistance programs aren’t limited to first-time homebuyers. Some are open to repeat buyers, so long as they meet the qualifications, which can include income or home price limits. Here’s an example of a national program:

Landed can provide up to 15% of your down payment (up to $120,000) in high-cost housing markets such as San Francisco, Seattle, Los Angeles, Hawaii and Washington, D.C. There are three things to note:

• You must provide at least a 5% down payment.
• You must work with one of the program’s partner agents or pay a 1.25% service fee.
• You must repay Landed when you sell, refinance or want to end the partnership; how much you repay is modified according to how the home value changed.

8. First-time homebuyer assistance programs

In addition to programs specifically for teachers, teachers who are first-time homebuyers may want to consider first-time buyer programs open to people from any profession. These programs offer down payment assistance, low-interest loans and help with closing costs. Some may have specific income or home price limits.

9. Local home loan programs

Look for housing assistance provided by your city, county or state. For example, the California Housing Finance Agency provides up to 10% down payment assistance, which you don’t have to repay if you live in the home for five years. Look at the educator resource page on your school district website or try an online search for “teacher housing” and the name of your school or location.

Other affordable housing options for teachers

If you aren’t ready to buy a home yet, there are programs designed to help teachers find affordable living spaces. Some school districts also provide workforce housing. For more information, check out:

• The housing agency in your area
• Local programs