Saturday, February 2, 2008

Teacher Next Door Program

Good Neighbor Next Door Program or the Teacher Next Door Program is a unique federal government sponsored home loan program applicable to state-certified classroom teachers in grade K-12. The teacher should be a full-time employee at a public school, private school or a federal, state, county or city educational agency.

Under this program, HUD-acquired single-family homes are offered to teachers at half the purchase price. Homes offered under this program are located in HUD-designated Revitalization Areas and are typically in low and moderate-income neighborhoods. Single-family detached homes, condominiums and townhouses are also included under this program. The loan amount should be utilized for purchasing a home located in these revitalization areas. A teacher should purchase one that is located around the school in the same district or jurisdiction in which he/she is employed.

Revitalization areas contain many vacant homes that were previously insured through the Federal Housing Administration (FHA) and then foreclosed due to the inability of borrowers to make mortgage payments. In most cases, these are the homes that are offered to customers under the Teacher Next Door Program. These houses come at a discounted price and require a minimal down payment equivalent to $100. Interest rates on the mortgage loans are low and repayment terms are flexible. HUD contains a list of such houses. Hence, there is no need for real estate brokers and agents.

However, there are certain restrictions under this home loan program. The applicants must be citizens of the US and should be the primary resident in the purchased home for at least 3 years. Till that period, the teacher must be employed in the same school. Once the 3-year period is complete, the teacher has the option of selling the property and keeping the profit after clearing the loan.



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