Special Mortgage Programs for Teachers


If you are a certified teacher, you may be eligible for special home mortgage packages. These range from favorable interest rates to special discounts. Spearheaded by the Department of Housing and Urban Development's Good Neighbor Next Door program, many organizations offer further assistance to help teachers acquire their own homes.


  • Through the Good Neighbor Next Door program, the Department of Housing and Urban Development (HUD) offers to sell single-family houses to teachers for half the list price. To be eligible, you must be a full-time, state-certified teacher or administrator of any public or private school, or any educational agency from federal to municipal and in grades K through 12. To qualify for the program, your employer must certify that you are in good standing. You may then purchase a home in the vicinity of your employment.


  • The program's 50 percent discount is restricted to HUD-acquired properties. In other words, you may only buy a property from HUD's listings. HUD provides those homes on an as-is basis; it does not provide any guarantees, and it is up to you to visit and inspect the property. Only single-family homes, townhouses and condominiums are allowed; duplexes or other multi-family residences are ineligible. If the home you are purchasing requires repairs, the program includes provisions to repair the property.

Teacher Next Door Bids

  • The Good Neighbor Next Door program uses the Internet exclusively to list and sell the properties. All such properties are in revitalized areas which are places the government want people to move back to. You must submit a bid for the amount listed, no more or less, personally or through a real estate broker. For homes that receive more than one bid, HUD selects a winning bid via a lottery system -- bids are picked randomly by computer and awarded every week. Winning bids are posted on the website where the bid was submitted.


  • You must certify to live in the purchased house for three years. Also, you must be a first-time home buyer and may not own any home before the one acquired by the Good Neighbor Next Door program. If you fail to comply with these rules, certain penalties apply. You cannot resell the home during its first three years for more than 110 percent of the original price. You must refund part of the discounted amount if you live in the home for less than three years -- 90 percent for less than a year, 60 percent for less than two and 30 percent for less than three.

Other Programs

  • Teacher's Loan USA also offers special rates for teachers up to the university level. In this program, if you are a part-time teacher, you are also eligible provided that teaching is your primary source of income and you have regular hours. Teacher's Loan USA offers competitive mortgage rates rather than list-price discounts, but you may purchase a home in any location. You can even purchase an HUD-qualified home and receive the discount, too. Unfortunately, since 2008, many mortgage providers can no longer offer zero-money-down deals as banks have tightened their lending qualifications.

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