Pravin Kaipa, Author at Teacher Loan Guide

As a teacher of almost a decade living in California, it’s hard to afford to live here, especially where I am currently renting in the San Francisco Bay Area. My family is growing and I need a space that we can grow into and not feel trapped in an apartment or smaller living space. My sister and brother-in-law moved to Colorado about 2 years ago now and have been telling my wife and me to look into moving there. As the new year began and my family and I are still stuck in our rental here in California, I thought to myself, what home loan programs for teachers are available in Colorado? There are several current programs available to help Colorado teachers afford a home, from the national Good Neighbor Next Door program, the Teacher Next Door program, Homes for Heroes, and Landed Home Loans. There are also local area home loans for teachers in large metropolitan cities like Denver, Colorado Springs, and Aurora. The Good Neighbor Next Door Program The Good Neighbor Next Door program is a national program meant to help teachers or other government workers buy a home and is funded by the United States Department of Housing and Urban Development (HUD) to help people live in the place they work, especially in areas defined as revitalization areas. How does the Good Neighbor Next Door Program work? The Good Neighbor Next Door program works by the HUD putting a silent second mortgage on the property to make sure you stay there for 3 years, (with a 50% discount on the house!), as a primary residence while you work in a nearby school. After 3 years, they lift the second mortgage, and you are just bound to the first mortgage. If you don’t stay for 3 years, you will have to pay the full price for the property. Is the Good Neighbor Next Door program right for you? The benefits are a 50% discount off the purchase price of the house for staying in the place you’re working for 3 years. You have to be a certified Pre-K-12 Teacher teaching in a revitalization area, purchase a home in that revitalization area, and commit to staying there for 3 years as your primary residence. If you find a house on HUD’s website that fits your needs, the 50% discount is a huge bonus! The Teacher Next Door Program The Teacher Next Door program can be combined with the Good Neighbor program, but when used by itself, it doesn’t offer a 50% discount. You get thousands of dollars of grants to help you buy a house and up to 10,000 dollars in down payment assistance, in addition to waiving application and broker fees, to buy a house wherever you qualify for a loan. The program also offers free home appraisals, enrollment in its credit building program, and discounted title fees. How does the Teacher Next Door Program Work? The Teacher Next Door program is an all-inclusive service provided by a private agency that helps you receive a large selection of discounts and incentives to use a TND agent and borrow through their lender network. It can also be used with HUD’s Good Neighbor Next Door program, Freddie Mac’s Home Possible program, Fannie Mae’s Home Ready program, or any number of other first-time home buyer programs in Colorado. Is the Teacher Next Door Program right for you? The only real downside I see with the Teacher Next Door program is that you have to use one of their partner lenders which may or may not have a better rate than other lenders in your area. The nice thing is they don’t pull your credit so it would not hurt your credit score to file an application with the Teacher Next Door program and see whether they can save you some money with grants and fees and if the tradeoff with using their lenders is worth it. You can also combine this program with others including the Good Neighbor Next Door program, which could save you hundreds of thousands of dollars. See our review of the Teacher Next Door Program here. Homes for Heroes Program The Homes for Heroes program provides rebates for teachers working with the Homes for Heroes real estate agents and affiliate lenders. Another nice thing about the Homes for Heroes program can be used in parts, for example, you do not have to use both their affiliate lenders and their affiliate real estate agents. How does the Homes for Heroes Program Work? There are no fees or costs at the beginning of the program. You just have to pay the individuals or companies you partner with to buy your house. You only need to give them your contact info, which can be easily found on their website, and they will reach out to you depending on what services you are looking for. Is the Homes for Heroes Program right for you? Not getting to use both of your lenders and real estate agent is a big trade-off to think about. Luckily, if you already have a realtor you are working with, they can apply to be a Homes for Heroes partner and you can still work with them. You could also just use the Homes for Heroes realtor and not their affiliate lenders. Their website boasts an average of 2,400 in savings, which, if you have your down payment already, is a nice chunk of change. The Landed Program Landed is a company that helps educators get into a house by matching or investing along with educators and other school staff when they are ready to buy a home in expensive cities throughout the United States. For example, Landed would provide half of the down payment funds you need as long as you agree to share 25% of your invested earnings when it comes time to sell. How does the Landed Program work? Landed pays for their portion with tens of millions of dollars in donations from foundations all over the US but the Denver area was one of the first areas they branched out to so they know the Colorado markets well by now. Employees, including custodians, bus drivers, principals, and of course, teachers, must have worked for the district for at least 2 years and must agree to stay for 2 more. If for any reason, they voluntarily leave before then, they have a year to pay Landed back. Is the Landed Program Right for You? If you don’t have enough upfront money to put a competitive down payment together, and you are comfortable with the amount of money you bring home each month, Landed, or companies like Landed, might be your best bet. I have personally looked into Landed and it’s been a good experience so far, just haven’t found a house we liked enough to bid on yet. What are your other options for home loans in Colorado? You could try your local teacher's unions to see if they have any connections for loans because some unions like the National Education Association and the American Federation of Teachers have partnerships with lenders. Some areas also have dedicated teacher housing, but it can be hit or miss if it is being used as a rental while you work for the district or whether it is owning a single-family home in district boundaries. Are there any new home loan programs for teachers in Colorado? There was a recent bill that was proposed to help teachers afford housing called the HELPER act, supposedly having no monthly mortgage, and those who qualify also would not have to worry about monthly mortgage insurance. Unfortunately, it hasn’t been made into law yet, but if it does, it would be great news for us teachers! How can you find teacher home loan programs near you? Every local area has its resources and programs that will help teachers as well. These houses might be under section 8 housing or other government-built or maintained housing. The nice thing about these resources is they are available with a phone number and an email. You can always reach out to the Teachers Union representative from your school or local area as well. Try not to be overwhelmed, there are a lot of resources out there for you! Link to Local Colorado HUD resources Any other tips and tricks for Teachers finding a home in Colorado? Usually, you want to look and move during summer break because that’s when you’re not working, but it might be easier these days to search for housing and start the loan process in spring. You can use the week of Spring Break or even fall so you can use the two weeks of Winter Break to make a move. The end of the year is a big holiday season so there’s less competition for the few houses that might be available during that time. Hopefully, that nets you a great deal! Related Posts