A Home Buying Guide for Teachers

From federal and state to private entity programs, you can potentially save up to thousands of dollars on home loans, down payments, closing costs, and other fees associated with homeownership. Below is an overview of some of the most common ones designed specifically for educators, along with some of their advantages and disadvantages.

Teacher Next Door

Teacher Next Door is the largest national home buying program in the U.S., serving teachers and other public service professionals. Its specialists work with applicants to identify what assistance they may be eligible for. 

Pros: 

• Grants and payment assistance are available in all 50 states
• You can buy any home in any neighborhood as long as the purchase meets loan approval guidelines
• There are no application or up-front fees

Cons:

• You need to work with a real estate agent affiliated with the Teacher Next Door program as well as one of its mortgage lenders
• You may not qualify for down payment assistance if you earn a higher income

Good Neighbor Next Door

Launched by the U.S. Department of Housing and Urban Development, Good Neighbor Next Door is a program for public service professionals, including Pre-K through Grade 12 teachers. 

Pros:

• The program offers a 50% discount on a single-family home's listing price
• Down payments can be as low as $100

Cons:

• Eligible homes are in revitalization neighborhoods only and can be significantly limited
• You must commit to residing at the property for at least 36 months, and it must be your primary residence

Homes for Heroes

Launched in response to the September 11, 2001 terrorist attacks, Homes for Heroes gives back to community heroes, including law enforcement, firefighters, the military, healthcare professionals, and teachers. Homes for Heroes also has a Homes for Heroes Foundation, which receives a portion of earnings from customers who buy or sell a home through its program. 

Pros:

• Teachers can save on closing costs and other fees, such as applications, appraisals, and inspections 
• You can work with your own real estate agent and loan officer, both of whom can contact the program to learn more about how it works and how it can assist you

Cons:

• There are no apparent disadvantages, but it’s recommended you thoroughly research Homes for Heroes to see if it fits your needs

Educator Mortgage Program

The Educator Mortgage Program is backed by Supreme Lending and offers home buying and selling, refinancing, and FHA home loan programs. It also provides discounted closing costs, discounted real estate agent fees, and a fast loan process and donates to its customers' preferred school programs.

Pros:

• Retired teachers are also eligible
• Veterans can incorporate VA loans with the program

Cons:

• You might need to have spent a minimum amount of time in your current job to be eligible for certain programs

Teachers Unions

Another viable option is to look at teachers unions. Your best bet is to research the largest national ones, but state or local unions you might be a member of could also offer benefits. National options include the National Education Association, the American Federation of Teachers, and the United Federation of Teachers. 

Pros: 

• They often have zero application and related fees
• They may offer personal loans
• You can secure additional savings through discounts like van and truck rentals for moving

Cons: 

• Not all unions, like the American Federation of Teachers, have mortgage programs available in all 50 states

Additional Options to Consider

Teacher-Focused Credit Unions

Teacher-focused credit unions provide home loans for teachers, and you can find local institutions through the National Credit Union Association.

Landed

This private program helps educators secure a 20% down payment on a home. It has some drawbacks, however, including remitting a share of the profit should you ever sell your home. It also appears to mainly serve pricier housing markets, such as San Francisco and Washington, D.C. You can find out more about it here.

Government-Backed Mortgages

These differ from conventional loans because they have lower credit score and/or down payment requirements. They're also available to buyers regardless of their profession and include loans issued by the Federal Housing Administration, the U.S. Department of Veterans Affairs, and the U.S. Department of Agriculture.

Hometown Heroes 

Hometown Heroes gives back to those who serve their communities by helping them potentially save thousands of dollars when buying, selling, or refinancing a home. 

Teacher Next Door Fresh Start

Part of the Teacher Next Door program outlined above, Fresh Start helps educators who struggle to secure a mortgage because of poor credit scores and need to repair them.

State and Local Teacher Programs

State-specific teacher programs for educators are another way to help teachers become homeowners. 

Examples include:

• Florida: The Florida Housing Finance Corporation has several programs offering low-interest loans and down payment assistance to eligible teachers.
• Texas: The Texas State Affordable Housing Corporation offers programs like the Homes for Texas Heroes Program, which provides low-interest rate mortgages and down payment assistance to eligible teachers and other public school educators. 

Traditional Loans

Although not specifically geared toward educators, Fannie Mae and Freddie Mac offer two mortgage programs to help make homeownership more affordable. Fannie Mae's HomeReady and Freddie Mac's Home Possible are similar programs in that they assist low- to moderate-income borrowers who don't meet the average down payment requirements. Both programs accept down payments as low as 3% and allow flexible funding, including gifts and grants.

Summary

There's no shortage of assistance programs available to teachers everywhere; they just require some research on your part to find the best one that fits your needs and long-term goals. Depending on your circumstances and the program(s) you choose, you can increase your chances of getting more value for your money by raising your credit score if it’s too low, comparing mortgage lenders to secure the best possible rate, and finding a real estate agent with experience in teacher-related programs.