Teacher Mortgage Loans Explained

What is the Teacher Next Door program?

Basically, it is a HUD (Housing and Urban Development) program that allows teachers to purchase homes in certain areas for 50% of the listed value. For example, if the HUD site lists a property for $150,000 - you will only have to pay $75,000 for the house. Not a bad deal, wouldn't you say?

What's the catch?

You are restricted to purchasing a home in HUD-designated "revitalization areas". These are areas of a city that are in need of economic revitalization, and that HUD is already committed to improving. You also must live in this property as your sole residence for a minimum of three years.How do I participate?

Go to the HUD website and check the listings for your state. Please note that you must buy the home through a real estate agent.

What kind of financing is available for this program?

There are many teacher mortgage loan programs available. You may use conventional mortgages, FHA & VA loans or pay the full balance in cash. You also will be required to sign a second "silent" mortgage on the discounted amount, however you will not pay principal or be charged interest on this mortgage, provided you meet the three year owner occupancy requirement. After the three year period, that silent mortgage will be forgiven and you will owe the remaining balance on 50% of the home's purchase price.Does the HUD guarantee my purchase?

No. There is no warranty or guarantee on your home purchase. As with buying any piece of property, it is always recommended that you hire a good home inspector prior to purchase. Good luck!