Teacher Next Door Program

Established by HUD in order to provide affordable housing to teachers and education administrators, the Teacher Next Door Program offers a 50% discount on homes purchased in low- and moderate-income neighborhoods. The program was designed to integrate teachers into revitalization areas.

Am I eligible?

The Teacher Next Door Program offers assistance to teachers and education administrators. To qualify, you must:

• Be a state-certified classroom teacher or administrator in grades K-12
• Be employed full-time by a public or private school, or
• Be employed full-time by a federal, state, county or municipal education agency
• Certify that you are employed by the same district or jurisdiction in which the home you are purchasing is located
• Be in good standing with your employer
• Not own another home at the time of closing on your Teacher Next Door home
• Agree to live in your new home as your only residence for 3 years after moving in

As well as teachers and education administrators, a HUD approved home must fall within certain requirements. In order to qualify for the Teacher Next Door Program, a home must:

• Be a single-family house, townhouse or condominium
• Be located within a revitalization area
• Be a HUD acquired home and not other real estate for sale in the area

How does it work?

HUD homes available for the Teacher Next Door Program are listed and sold over the Internet marked with a Teacher Next Door button. You must bid the listed price of the home, and bids are randomly chosen and awarded each week. HUD does require that you sign a "silent second" mortgage and note for the discounted amount, but no interest or payments are required, provided that the 3 year occupancy agreement is met.

What are the alternatives?

For those who qualify according to the above requirements, purchasing a HUD home through the Teacher Next Door Program can offer you the opportunity to purchase a home more quickly, and for a lot less cost and hassle, than if you chose a conventional home loan. If becoming a homeowner is still out of reach, you may also apply for a FHA insured mortgage with only $100 down payment, as well as finance all closing costs. You may also qualify for additional assistance through state or local government sources, as these branches hope to encourage families to move into revitalization areas.

Do I really need this type of loan?

If financial hurdles are preventing you from purchasing your own home, the Teacher Next Door Program may be your ticket to homeownership. If, however, you are not in need of financial assistance or a low downpayment, you may opt for a conventional home loan.