Purchasing a home can be challenging for many individuals, particularly first-time home buyers who work in lower-paying fields, such as teaching. Those teachers can take advantage of several federal programs, which offer more favorable loan terms, down payment assistance and other help. Many states also offer assistance to teachers.
Good Neighbor Next Door Program
Through its Good Neighbor Next Door program, the Department of Urban Housing and Development offers pre-kindergarten through 12th-grade teachers discounts of 50 percent off the list price of homes in revitalization areas. In return, teachers must live in the houses for three years. Teachers can bid on homes in the program for seven days, called the lottery period. After that time, the bidding is opened to a wider pool of potential buyers. Teachers can find listings by visiting HUD.gov's HUD Homes page and clicking on the state where they live. HUD requires participants to sign a "silent second" mortgage for the discounted amounts on their homes. For example, if a home list price was $200,000 but sold for $100,000, the participant would sign a silent mortgage for $100,000. No interest or payments are required on the second mortgage unless the three-year residency requirement is not fulfilled.
Help for California Educators
Under California's Extra Credit Teacher Home Purchase Program, eligible teachers, administrators, classified employees, and staff members working in public schools, continuation schools or high-priority schools may apply for junior loans ranging from $7,500 to $15,000. These loans can only be used as down payments. To qualify, teachers must be first-time home buyers, occupy the home, meet income limits and agree to work in the location where the home is located for three years from the date of the loan. Single-family homes and condominiums -- but not manufactured homes -- may be purchased.
Assistance for Educators in Texas
The Homes for Texas Heroes program offers fixed-rate home loans and grants for down payment assistance that requires no repayment. To quality, you must be a full-time classroom teacher, teacher aide, librarian, counselor or nurse in a Texas public school, or be employed by a Texas college or university as allied health faculty or nursing faculty. Teachers who are first-time home buyers may apply for the Mortgage Credit Certificate Program, which allows them to take a portion (up to $2,000) of the annual interest paid on a mortgage as a tax credit.
Homes for Heroes: The Company
Teachers are among those eligible for discounts when using real estate service providers affiliated with Homes for Heroes, a private company created after the events of Sept. 11, 2001. "Our Heroes include military personnel, firefighters, law enforcement officers and others who make our communities a better place to live," the company notes on its website. Discounts include 25 percent off commission fees and discounts for lending fees, home inspections and closing costs. Amounts vary according to location and home price.