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Home Loans For Teachers: An Educator’s Financing Guide

Emma Tomsich6-minute read
August 30, 2019

Anyone whose life has been impacted by a really great teacher will tell you how important the profession is. Teachers aren’t just educators. They’re role models who shape the minds and characters of our future leaders, caregivers, thinkers and heroes.

Unfortunately, teaching is a highly underappreciated field these days. Many new teachers graduate with tens of thousands of dollars of debt, and unlike many other graduates with a bachelor’s degree, teachers’ starting salaries tend to be lower than average.

As a result, teachers can face many financial struggles, such as low wages and student loan debt. This can make it challenging for teachers to make major purchases, such as buying a car or a house.

Fortunately for teachers, there are a few programs and resources unique to teaching that can help ease the burden of student loan debt and make buying a house more attainable. Let’s take a look at these programs and other home loans for teachers that you might be eligible for.

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Teacher Home Buying Programs

As we mentioned, it can be difficult for many teachers to find financing for a home purchase. Luckily, teachers may have eligibility for loan programs created specifically for them. Learn more about available assistance by researching the following programs.

1. Teacher Next Door Program 

The first loan program is called Teacher Next Door (TND). Pre-K to 12th grade teachers are eligible for this program. The TND program helps educators achieve homeownership by locating houses for them to buy. TND also offers down payment assistanceand grants to cover closing costs. Additionally, if you are not a teacher, but you work in administration or as another public service professional, you may qualify for assistance.

No credit check is required for the program’s preapplication. Apply now for the TND program, and a program specialist will contact you to discuss the program and go over what options may be available.

2. Good Neighbor Next Door Program 

Good Neighbor Next Door is the next program we’ll discuss. The Good Neighbor Next Door program is available through the U.S. Department of Housing and Urban Development (HUD) to pre-K through 12th grade teachers. Like TND, this program is also geared toward public servants like teachers, law enforcement officers, firefighters and emergency medical technicians.

Additionally, the program offers a 50% discount on foreclosed homes in revitalization areas. The 50% discount is covered by a second mortgage that HUD pays for and is forgiven if the property is the borrower's primary residence for 3 years.

If you’re interested, you can check out the available homes in your state on the HUD Homes website. To be eligible, you must be employed full-time by a state-accredited public or private school that serves students in grades prekindergarten through 12. The school you work at must be located within the same area the home you want to purchase is located. You must also agree to live in the property for at least 3 years.

If you need a loan option that’s more welcoming to first-time homebuyers and those who are unsure if they’d be able to qualify for or afford a conventional mortgage loan, you may want to look into getting an FHA, USDA or (if you’re eligible) VA loan.

Additionally, be sure to check out your state’s local home buying programs, which may offer things like financial counseling, down payment assistance and other resources. 

3. Homes For Heroes 

Homes for Heroes is a national program for teachers and other public servants that offers closing cost assistance. Qualifying heroes include, but are not limited to, military personnel, firefighters, paramedics, EMTs, teachers, law enforcement and all other first responders. On average heroes save $2,400 when they buy or sell a home with Homes for Heroes.

Estimate your savings, check your eligibility and take the first step toward the application process by filling out the Homes for Heroes registration form.

4. Additional Programs And Mortgages For Teachers 

Although we highlighted just three specific loan programs for teachers, there are many other programs and loan options available to teachers out there. We’ll introduce you to a few more programs at the national, state and local levels, and we encourage you to conduct additional research to determine what program is best for you.

  • United Federation of Teachers (UFT): The United Federation of Teachers offers numerous loans and discounts available through the Union Assist Program. Specifically, the program offers mortgage discounts to qualifying members so they can purchase a home, refinance their home, take out a home equity loan and more. Learn more about UFT’s mortgage discounts and promotions.

  • Educator Mortgage program: The Educator Mortgage program offers qualifying members many benefits including discounted closing costs, discounted real estate agent fees, fast loan processing and even a donation to the member’s school. As mentioned, this lender’s program covers closing costs and REALTOR fees.
  • Local programs: Conduct research to find out what local loan programs you may qualify for. There may be grants or other home buying bonuses geared toward teachers that are specific to your neighborhood.
  • State programs: Check out your state’s home buying programs to determine if you are eligible, too. State programs typically offer additional benefits such as counseling, down payment assistance and other resources. Search the web to determine what loan programs are available in your state.
  • First-time home buyer assistance programs: First-time home buyer assistance programs aren’t specifically designed for teachers, but they can still be helpful. If you are a first-time home buyer, see what programs might be available to you.

Finally, many unions are working hard to create and promote affordable housing options for teachers. Teachers can use affordable housing options as a temporary living solution while buying a home. Search the web to see if there are any affordable housing options in your neighborhood.

5. Alternative Loans

Additionally, there are other types of mortgage loans that have less strict eligibility requirements, besides the loan programs mentioned above. We’ll highlight your other options and the conditions for each one.

  • FHA loans: FHA loans offer homeowners many benefits, including low down payment amounts, lower credit score thresholds and limited closing costs.

  • USDA loans: USDA loans are eligible for people living in rural areas. They are backed by the USDA, which allows lenders to offer lower rates and a 0% down payment. To qualify for a USDA loan, you must have a low- to moderate-income and live in an eligible rural area. Rocket Mortgage does not accept USDA loan applications at this time.

  • VA loans: VA loans are the final alternative loan type. VA loans offer favorable interest rates, 0% down payment and no private mortgage insurance. To qualify for a VA loan, you must be a veteran, active service member or eligible spouse.

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Are There Home Loans For Teachers With Bad Credit?

Fortunately, there are also options for teachers with credit scores that aren’t high enough to qualify for conventional mortgages. Many of the above options - such as VA loans -  work for borrowers with lower credit scores, so look into the loan programs to determine if you qualify.

You can also check out the TND Fresh Start program which is a part of the Teacher Next Door program we highlighted above. The Fresh Start program helps buyers raise their credit scores to make homeownership a reality. Consultations are free, so consider applying for the TND Fresh Start program to start raising your credit score and get you closer to your dream of buying a home.

Getting your credit mortgage-ready by slowly building up your score is one of the first actions you should take if your score is less than ideal. You can make positive gains regardless of how high your student loan balance is, and this can help you unlock the best mortgage options. Shoot for a credit score of 760 or higher to get the best interest rate possible. Take steps toward building your credit score by making payments on time, lowering your utilization and checking your credit report for errors.

The Bottom Line

Buying a home can be challenging for teachers, but specialized programs can help you become a homeowner. Achieving homeowner status might not be fast or easy, but it can be realistic and attainable – you just have to be prepared to put in the work and potentially make some sacrifices.

Conduct your own research on the previously mentioned options to find one that best fits your needs and if you’re ready to start your home buying journey, get started today by checking your credit score to find out which programs you could qualify for.

Take the first step toward buying a house.

Get approved to see what you qualify for.

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Emma Tomsich

Emma Tomsich is a student at Marquette University studying Corporate Communications, Marketing and Public Relations. She has a passion for writing, and hopes to one day own her own business. In her free time, Emma likes to travel, shop, run and drink coffee.