Trying to buy a home on a teacher’s salary can be difficult, but there are national, state, local and lender-specific programs that can provide some relief. Doing your homework — sorry, we couldn’t resist — could help you save thousands of dollars through home loans for teachers, as well as closing cost and down payment assistance.
Teacher Next Door program
The Teacher Next Door program helps teachers, administrators and educational support staff, including coaches, maintenance staff and bus drivers, find housing assistance programs and benefits. Teacher Next Door directly offers eligible home buyers grants of up to $6,000, which don’t have to be repaid. The program’s counselors can also connect you with down payment assistance of up to $10,681.
Other perks can include discounted title insurance fees, an appraisal rebate and a real estate agent rebate if you use a buyer’s or seller’s agent chosen for you by Teacher Next Door or you’re already working with an agent affiliated with the program. Not all of the programs are available in every state, so after you complete a pre-application form, you’ll be contacted with eligibility information.
You don’t pay for Teacher Next Door’s services, so what’s the catch? Teacher Next Door isn’t a government program or a nonprofit; it’s a private agency. In order to take advantage of its services and benefits, you’ll work with one of its two partner lenders. That means that you won’t be able to shop for a lender or compare rates.
That said, completing the Teacher Next Door pre-application doesn’t have any negative impact (your credit score isn’t pulled), so it could be worth it to pre-apply and speak with a representative to learn about your eligibility. Depending on your circumstances and your priorities, you might decide that trade-off is outweighed by the program’s grant and/or down payment assistance.
Nerd tip: If you’re a pre-K through 12th-grade teacher (administrators and support staff don’t qualify), you can combine the Teacher Next Door program with the Department of Housing and Urban Development’s Good Neighbor Next Door program.
Homes for Heroes program
Homes for Heroes Inc. offers a suite of discounted services to home buyers who are current or former teachers, from pre-K all the way to postsecondary. (Other jobs within the education system may qualify, too; contact Homes for Heroes to learn more.) Working with Homes for Heroes can help offset the costs of buying, selling or refinancing a home.
Union-affiliated home loans for teachers
If you’re looking for mortgages that are specifically for teachers, one option is to look to teachers unions. The largest national unions have partnerships with specific lenders; if you are a member of a state or local union (whether it’s independent or a chapter of a national union), check your member benefits there as well.
National Education Association members can take advantage of a mortgage program through the First National Bank of Omaha with no application, processing or origination fees. Conventional, FHA, USDA and VA loans are available through this program. Before committing to FNBO, you can shop rates by pursuing preapproval.
Members of the American Federation of Teachers are eligible for teacher mortgages through Union Plus Mortgage Company or Amalgamated Bank. Union Plus offers perks including a $1,000 grant for veterans and up to $500 back after closing. Amalgamated boasts discounted fees and a first-time home buyer program that allows down payments made entirely with gift or grant money. Both lenders also offer refinancing options. The biggest caveat: Though all AFT members are eligible, neither Union Plus nor Amalgamated is licensed to lend in all 50 states, so availability depends on where you live.
State and local homebuying programs for teachers
Look into location-specific programs for educators that may be able to help you become a homeowner. Examples include:
Texas State Affordable Housing Corporation’s Homes for Texas Heroes Home Loan Program, which offers teachers down payment assistance grants of up to 5% of the total loan amount. These loans are subject to income limits, but you don’t need to be a first-time home buyer.
The tech startup Landed helps teachers and other school employees who work in high-cost areas like San Francisco, Boston and Washington, D.C., afford to buy homes where they work. Landed will lend you 50% of your down payment in exchange for 25% of your home’s gain — or loss — when you sell.
The Connecticut Housing Finance Authority discounts its published mortgage rates by 0.125% for teachers who are state certified and meet CHFA eligibility guidelines.
The Mississippi Employer-Assisted Housing Teacher Program provides closing cost assistance loans of up to $6,000 for teachers working in underserved areas of the state to buy homes within their school district’s county. After the borrower teaches for three years in an underserved area, the loan converts to a grant.
Teacher home loans from lenders
Some lenders also offer home loans or assistance programs that are specifically geared toward teachers. Notably, Texas-based Supreme Lending offers an Educator Mortgage that provides a rebate of up to $800 at closing. It’s unusual for also being available to college faculty and adjunct professors — many teacher programs stop at high school.