*As of July 6, 2020, Quicken Loans is no longer accepting USDA loan applications.
There a number of mortgage types out there – which one is right for you if you’re a teacher? Fortunately, you can access home loans designed with your needs in mind.
From low down payment programs to low mortgage rates, teachers can save thousands of dollars on a home simply by taking advantage of the options listed below.
What Programs Are Available For Teachers?
Many home loan assistance programs and grants are designed to give back to teachers and other public service officials. Some of these programs can be combined with discounted mortgages and to help make buying a home even more affordable for educators.
Most programs are only open to K-12 educators, but others include college-level instructors, school administrators, coaches and retired teachers. Let’s review some of the options:
Option 1: Good Neighbor Next Door Home Loans
The Good Neighbor Next Door home financing program is funded through the U.S. Department of Housing and Urban Development to help teachers and other U.S. civil servants buy a home. This program aims to help build up communities in designated revitalization areas.
Qualified teachers buying a home in a revitalization area will receive a 50% discount off the listing price of a home.
There are a few requirements you must meet to be eligible for the Good Neighbor Next Door program:
- You must be a certified pre-K-12 teacher teaching in a revitalization area.
- You must purchase a home in a designated revitalization area.
- You must commit to live in the home for a minimum of 3 years to receive the discount.
- The property you purchase must remain your primary residence for all 3 years.
Is The Good Neighbor Next Door Program Right For You?
Option 2: HOMES FOR HEROES® Financing by Homes for Heroes, Inc.
You may have a bundle of money saved to put a down payment on a home – but you’ll still have to cover closing costs and other fees that pop up during the process. Homes for Heroes, Inc. can help U.S. teachers reduce these fees to make buying a home more affordable.
Homes for Heroes, Inc. can help qualified teachers reduce the amount of money spent in fees throughout the buying process. This program can help you save on closing costs, inspection fees, title company costs and more.
For example, you can save up to $2,450 in fees on a $250,000 home.
You’ll need to be a certified pre-K – 12th-grade or post-secondary teacher to qualify for the HOMES FOR HEROES® financing program.
Is HOMES FOR HEROES® Financing Right For You?
Homes for Heroes, Inc. can help you save money on buying fees and can typically be combined with other incentive programs. Explore this incentive program – as long as you meet the qualifications, you should be able to find out how much you can save. You can visit the official Homes for Heroes, Inc. website to review details at www.homesforheroes.com.
Rocket Mortgage by Quicken Loans is not affiliated with or otherwise sponsored by Homes for Heroes, Inc.
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Option 3: Teacher Next Door Program
This home financing program offers grants and down payment assistance to public service professionals and teachers. The Teacher Next Door program is an all-inclusive method for financing your home while you receive a large selection of discounts and incentives.
The Teacher Next Door program is known for its grants up to $4,170 in most areas and up to $6,000 in qualifying locations. This program also offers up to $10,681 in down payment assistance, provides teachers with low rate home loan options and waives many fees, such as application and broker fees.
In addition, the Teacher Next Door program offers free home appraisals, enrollment in its credit building program and discounted title fees.
You must be a pre-K – 12th-grade teacher to qualify for the Teacher Next Door program.
Is The Teacher Next Door Program Right For Me?
This program is a great way for you to maximize your savings when you buy a home. The grants and down payment assistance program can be combined with other financing options, so even if you’ve already found a lender, you can still be eligible for the same discounts. This program can also be combined with the Good Neighbor Next Door program.
Option 4: Government-Backed Mortgages
Government home loans are mortgages that are funded through the federal government. These loans are ideal for first-time home buyers, borrowers who purchase in rural areas and current or former members of the military. These loans typically come with flexible eligibility requirements and low money down options.
There are three main types of government home loans: FHA, USDA and VA. All three have different benefits and can be combined with many of the above grants.
You’ll pay as little as 3.5% down if you have a 580 credit score or higher with an FHA loan. Expect to put 10% down if your credit score is below 580 (Rocket Mortgage® has a 580 minimum credit score requirement for FHA loans). You’ll also be eligible for low mortgage rates. FHA loans are great options for low- to mid-income home buyers.
USDA loans can help you avoid down payments altogether if you purchase a home in a designated rural area. You can see if your address qualifies on its website. VA loans can assist you if you are a qualified current or former member of the military (or a qualified military spouse). VA loans have low mortgage rates, no down payment requirements and no mortgage insurance requirements.
For FHA mortgages, lenders typically require a minimum credit score of 580 for approval. USDA mortgages technically have no minimum requirement, but most lenders expect a credit score of 640 or higher.
You’ll also need to verify the home you’re purchasing meets the USDA location standards and area median income guidelines. VA mortgages do not have minimum credit requirements, but most lenders expect a 620 credit score or higher.
Is A Government Mortgage Right For You?
You can typically save the most in down payment fees with government home loans. You’ll also be able to combine them with some of the other teacher grants that cover closing cost fees to save the maximum amount of money on your home mortgage.
Can You Use A Government Program With Any Lender?
Not all lenders offer government-backed home loans, though most do. Not all lenders offer all three types of government loans, either, so do some research before you decide on a lender.
Rocket Mortgage® provides all three government-backed mortgage options and can help you determine which one is right for you.
Also, not all lenders can accept government-funded assistance programs. The Good Neighbor Next Door program, for instance, is typically provided through an FHA mortgage, which many (but not all) lenders offer. Talk to your lender about the programs you’re interested in to determine if it’s possible to use them.
If you’re a teacher looking to buy a home, it’s important to review all of the programs available to assist you. You can save up to 50% on your home if you live and teach in a designated revitalization area or pay as little as $0 on home closing and processing fees if you qualify for one of the mortgage assistance programs.
Since many of these programs can be combined with conventional or government-backed mortgages, you can save even more money by teaming up with the right lender. Partner with Rocket Mortgage® and we’ll walk you through all of your home loan options and speed up the home purchase process.
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