Last Updated on September 7, 2021 by Luke Feldbrugge
Buying a home for the first time is exciting, but also expensive. While historically people saved 20% for their down payment, you can still get a great home and good mortgage with less, thanks to first time home buying programs for teachers. Between grants, national funding, and different types of loans, there are home buying programs specifically for teachers to help with down payment costs.
Down Payment Assistance for Teachers
First Time Home Buying Classes for Teachers
For first time home buying programs for teachers, there are several options at the national and local level including grants, tax credits, and even discounts from real estate agents and lenders. Sometimes it can be hard to figure out where to start.
But, a good place to start is with a first time home buyer class. These classes are meant for first time home buyers and are helpful in so many areas of the home buying process. They are an opportunity to go over things like knowing how your personal finances work, and the steps involved in buying and closing on a house. They also explain how processes work, like inspections and homeowners insurance. One of the best resources from these classes is they generally discuss down payment programs available to you locally.
Some types of loans, and sometimes even lenders, strongly encourage you to attend these classes. Generally, you are not required to take these classes in order to buy a home.
You can find classes at the city, county, and state level, depending on where you’re looking to buy a home. A good place to look for these classes is on your city, county, or state’s department of housing web pages. Some cities have these types of classes as part of their adult education classes through a community center. If you’re moving to a new area, consider asking your future employer if they know of any resources. They might even know of some rarely used down payment resource programs.
Department of Housing and Urban Development
The Federal Government also offers first time home buying programs for teachers at the state level. The United States Department of Housing and Urban Development, or HUD, distributes funding to states to use through each state’s various programs, like the ones you’d learn about taking a first time home buying class. Again, you’ll be able to find these resources on your state’s website for housing assistance programs.
HUD also has another program that is specific for teachers, principals, and other educators. The Good Neighbor Next Door Program is designed to revitalize neighborhoods in every state. The homes available in the Good Neighbor Next Door program can be purchased at 50% off their list price! The only catch is that it has to be a HUD-approved home, and the list is generally short. The GNND program is also only available in certain areas.
Here’s how the program works: you put an offer on one of the GNND program-approved homes for the full list price. Then, your mortgage lender breaks your mortgage into two equal loans, Loan A and Loan B. You only need to pay back one of these loans, which is how you only have to pay 50% of the purchase price. You will not need to pay payments or interest on the other loan, so long as you live in the home as your primary residence, don’t sell it for at least 36 months, and continue to be employed as a teacher.
To qualify for this home program, you need to be eligibly employed as a teacher. The house you put an offer on must also be one of the houses that HUD has identified as eligible. You can find the list of houses per state on the Good Neighbor Next Door website. Keep in mind that homes are always being added to the list if you don’t find one right away in your desired location or that fits your needs.
Down Payment Resource
Another place to find first time home buying programs for teachers is through Down Payment Resource.
This is an online, comprehensive database of down payment assistance programs. You can enter your information, including that you’re employed as a teacher, to see the programs available to you. Down Payment Resource has approximately 2,300 programs in their database to automatically match you with.
Low and Zero-Down Loans
You can also combine the above programs with certain types of loans that also offer no or low down payments.
FHA loans, for example, require as low as 3.5% for a down payment with good credit scores. Even if you have a lower credit score, FHA loans for teachers only require maximum 10% for a down payment.
So, at a 3.5% down payment, if you’re looking at a $200,000 home, your down payment could be as low as $7,000. Sometimes, you can even finance some of your down payment components into your loan, meaning you’ll need less cash at closing.
USDA home loans are another excellent option for first time home buyer educators, because they don’t even require a down payment for qualified applicants.
These home loans are designed for first time home buying teachers already living in, or moving to, rural areas. While you might think of rural as a small town, the USDA recognizes towns up to 35,000 people as rural. USDA loans have the most requirements to meet for a government-backed loan. But, if you qualify, these loans are such a great option for homeownership.
The loan amount you request can be 100% of the home purchase price since there is no down payment requirement. There also is technically no minimum credit requirement, though a 640 credit score or better tend to have better success. You can also use a USDA loan to build a new home; it does not need to apply it to an existing home.
Homes for Heroes
If you qualify for down payment assistance through your local government, and are able to get a FHA or USDA loan, there are even more savings out there for a teacher hero like you! Homes for Heroes is the largest, nationwide program of its kind. We say thank you to heroes for their service to their communities by saving them money on buying, selling, or refinancing a home.
When you sign up, we’ll connect you with a Homes for Heroes real estate affiliate and mortgage specialist. These affiliates are in your local area, so they know what the housing market is like where you’re trying to buy. There is no obligation to use our service once you sign up, and there are never fees or extra paperwork when you use Homes for Heroes. We simply want to give back to our heroes across the country.
Homes for Heroes has helped over 46,000 teachers and other heroes save more than $80 million on their home transactions. We do this by giving you back Hero Rewards after your closing.
When you use one of our affiliate real estate agents to buy your home, you’ll get $700 back for every $100,000 in purchase price. So, if you buy a home for $200,000, you’d get $1,400 back. This money can be used for anything, like new furniture for your new home, make repairs, or put in savings. It’s yours to do whatever you’d like.
Plus, if you work with our mortgage, title and inspection specialists, you can save $500 on lender fees, $150 on title services, and $50 on a home inspection. We also have deals with companies all over the United States for home and career related products and services, like moving companies, carpet cleaners, storage containers, and home security. That adds up to thousands of dollars in savings!
Homes for Heroes specialists can work with any of the first time home buying programs for teachers you choose. The best part is that regardless of the assistance you receive, you’re always qualified to receive Hero Rewards. It’s the least we can do to say thank you for educating in our communities.
Sign up now to get more information from a Homes for Heroes agent. There is no obligation, cost, or extra paperwork for you.