Real Estate Finance Center
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Teacher Next Door
The U. S. Department of Housing and Urban Development (HUD) wants to make American communities stronger. The Teacher Next Door (TND) program is designed to further this goal by encouraging teachers to buy homes in low and moderate-income neighborhoods.
Who can participate?
The TND program is open to any person "employed full-time by a public school, private school, or federal, state, county, or municipal educational agency as a state-certified classroom teacher or
administrator in grades K-12 ." Participants must certify that they are employed by an educational agency that serves the school district/jurisdiction in which the home they are purchasing is located.
Southern California teachers wishing to purchase a home under the TND program must be in good standing with their employer. Your employer must certify that you are a full-time teacher or school administrator. You don't have to be a first-time homebuyer to participate. However, you cannot own any other home at the time you close on your TND home. You must agree to live in the HUD home as your only residence for 3-years after you move into it.
How do I participate?
TND property is listed and sold exclusively over the internet. Properties are single-family homes located in Revitalization Areas. Properties available through the program are marked with a special Teacher Next Door button. Bids are awarded once each week. Your bid must be the amount of the list price. You may submit your bid directly or utilize the services of a real estate broker. A computer randomly selects the winning bid. The winning bid is posted each week on the web site where you made your bid.
You may also buy a home from a government agency or a nonprofit organization that bought the home from HUD. When an agency or nonprofit buys the house, HUD expects the full discount to be passed on to you.
In all cases, HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this "silent second" provided you fulfill the three-year occupancy requirement.
What are the benefits for the teacher?
The selected bidder may purchase the property at a 50 percent discount from the list price. For example, if a HUD home is listed for $100,000, a teacher can buy it for $50,000. To make a HUD home even more affordable, you can apply for an FHA-insured mortgage with a downpayment of only $100 and you may finance all closing costs.
If the home you want to purchase needs repairs, you may use FHA's 203(k) mortgage program. This program allows you to finance both the purchase of the home and the cost of needed repairs. You have the benefit of one loan for both costs and one monthly payment.
Discuss these financing options with your lender.
Because homes sold through the TND program are located in Revitalization Areas, there may be additional assistance from state or local government sources. Local or state governments want to encourage families and businesses to move into Revitalization Area neighborhoods. Contact your state government housing office or local municipal government and request information on assistance for homebuyers.
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If you have any questions on financing your Southern California Real Estate, please contact Joseph Dodge today. As your Southern California real estate broker, you can be assured that we will always look out for your best interests. Please call or email today, and we'll be happy to assist you throughout your real estate transaction.