How does the HUD homes Teacher Next Door mortgage program works?


The HUD homes Teacher Next Door mortgage program is part of the HUD Good Neighbor Next Door (GNND) program available to law-enforcing officers, teachers, firefighters and medical occupation practitioners. The purpose of the Teacher Next Door mortgage program, as the purpose of the whole GNND program and participants, is to encourage teachers to buy homes in low and moderate income neighborhoods.

HUD homes are offered at 50% discount through the Teacher Next Door mortgage program to eligible teachers.

HUD Homes Teacher Next Door Mortgage Program Requirements

Any state-certified teacher or administrator in grades K-12, full time employed by a public, private, federal or state educational agency in the area you want to purchase a GNND home. The HUD Teacher Next Door program does not require that the teacher is a first-time homebuyer, but they cannot own another home at the time of the application and have to remain on the HUD property for 3 years.

A HUD Teacher Next Door property can be bought with 50% discount. Bids for HUD homes can be submitted online or through a real estate agent. HUD homes under the Teacher Next Door mortgage program are situated in HUD-targeted areas for revitalization, and only single-unit homes, condo units or townhouses qualify.

To purchase a HUD home under the Teacher Next Door program, you will have to provide your own financing for 50% of the required amount - an FHA loan, or any type of conventional mortgage will do. For the remaining discount, you will have to sign a silent second mortgage and note on the property - no payments are required on the silent second mortgage, if the teacher stays on the property for full 3 years.

The HUD homes Teacher Next Door mortgage program requires that the teacher remains on the property for 3 years for the silent second mortgage to be waived. If they don't, they cannot sell the house for more than 110% of the original house price and 90, 60 and 30% repayment of the discount is required if the participant moves out during the 1st, 2nd or 3rd year, respectively.

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