The HUD Teacher Next Door Program

The HUD Teacher Next Door Program is a special HUD program.

Who can participate?

The Teacher Next Door 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."

Teachers 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.

Teachers wishing to purchase a home under the HUD teacher next door 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 HUD teacher next door home.

You must agree to live in the HUD teacher next door home as your only residence for 3-years after you move into it.

How do I participate?

The Teacher Next Door Program 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 HUD 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 Teacher Next Door Program 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 HUD 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 HUD Teacher Next Door 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.

I haven't had much experience in the Teacher Next Door Program because the areas I service are not in the Revitalization Areas.

The photo below in an example of HUD homes Illinois. This is a HUD home Chicago and listed for $245,000. If this property was a HUD home Indianapolis instead of HUD home in Illinois it would be listed at $50,000. I just can't believe it is worth $245,000.