The HUD Teacher Next Door Program | Can You Qualify?

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The HUD Teacher Next Door Program is a special HUD program to encourage homeownership in certain neighborhoods. The U. S. Department of Housing and Urban Development (HUD) wants to make American communities stronger. The Teacher Next Door program is designed to further this goal by encouraging teachers to buy homes in low and moderate-income neighborhoods. 

How the HUD Teacher Next Door Program Works

This program is part of the Good Neighbor Next Door Program and it is the intent of HUD to help revitalize certain areas throughout the country. They believe if teachers can live in the revitalization areas it will to stabilize the neighborhood.

The eligible single family homes located in the revitalization areas are listed only for sale through the Good Neighbor Next Door Sales Program and they are available for purchase for five days.

Teacher Next Door 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.

When participants purchase properties under the GNND program they agree to own and live in the property for a three-year period as their sole residence. Participants are required to certify every year that they are living in the property.

You will be required by HUD to sign a second mortgage and note for the amount of the 50% discount. The good thing is there will be no interest or payments on the second "silent second" if you fulfill your obligation to live in the property for 3 years. If you did not live in the property for the required 3 years then you will be required to pay back the discounted amount of the purchase price on a prorated amount.

At the end of the required three-year occupancy period, HUD's second mortgage will be released provided:

(1) the participant has completed and returned the required annual certifications,

(2) is not currently under investigation by the Office of Inspector General, and

(3) is in compliance with all GNND regulations.

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. Your bid must be the amount of the list price. You must use a realtor to submit your bid.

HUD will not pay any closing costs or real estate commissions, you will have to work out a commission agreement with your real estate agent before you make a bid on a GNND property.

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.

Remember 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.

HUD Teacher Next Door Program | 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.

The Teacher Next Door Program has recently been rolled in the Good Neighbor Next Door Program with the firefighters, EMTs, and HUD Officer Next Door Program. The program operates the same for each group with the exception of each group qualifications to participate.

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

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