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HUD's wants to strengthen America's communities. The Teacher Next Door (TND) Initiative offers HUD-acquired, single family homes to public school teachers at a 50 percent discount. Teachers are an integral part of our communities and are often the most important mentors in a child's life. In fact, other than families, teachers are often the most important mentors in a child’s life. Teachers reinforce the core values and basic skills needed for successful and productive adult lives. The TND program recognizes teachers for the value they bring to community and family life, and provides them with increased opportunities to serve our most needy communities outside the classroom.
Under the program, HUD offers homes located in designated revitalization areas. Revitalization areas are typically in low- and moderate-income neighborhoods, have many vacant properties and often have high crime rates, but are considered good candidates for economic development and improvement. Homes offered for sale in the program were previously insured through the Federal Housing Administration (FHA) and then foreclosed. HUD also reduces the downpayment requirement to just $100 if the home is purchased with an FHA insured mortgage.
Teachers must live in the property as their sole residence for at least three years after purchase. A teacher is defined as an individual 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 through 12.
"We're very much in favor of anything that helps teachers get into the classrooms where they needed," said Darrell Capwell, spokesperson for the million-member-strong teachers' union, the American Federation of Teachers. According to the union, growing numbers of school-aged children and teachers reaching retirement age have left the country with a teacher shortage expected to reach two million in the next ten years.
"We're not doing enough to entice new teachers," he said. "This is a very innovative approach."
"The Officer Next Door program has been so successful, this seemed like a logical next step," said Lemar Wooley, spokesperson for HUD. "If this proves to be as popular, we’ll be very happy."
Both programs are part of a broader effort to reduce the homeownership gap that divides the nation's cities and suburbs. While 73 percent of suburban residents own their homes, only 50 percent of those in the inner city are homeowners, according to HUD.
Wooley said the decision to target teachers as the next group of participants in this housing initiative stems from their role in the neighborhoods where they work.
"Teachers are involved in the communities where they teach,"
he said. "It make sense to have them living in the communities where
they teach."
(1) Q. Can a teacher purchase a property at the 50% discount outside of the area where he/she is employed.
A. No. The Teacher Next Door initiative requires participants to certify that they are employed by an educational agency that serves the school district/jurisdiction in which the home they are purchasing is located.
(2) Q. In order to participate in the TND program, does a teacher have to be currently performing classroom teaching duties?
A. No. The program requires only that the teacher be currently state certified to perform classroom teaching duties in grades K-12.
(3) Q. Can the teacher use the 203(k) rehab loan program if the property is eligible for this program?
A. Yes, the contract sales price is the as-is value and the discount is calculated on the as-is value. The rehab loan is not deducted from the teacher's discount, but may be financed as part of the loan.
(4) Q. Is this program restricted to first-time home buyers?
A. No, but the teacher cannot own any other residential real property and the teacher must reside in the HUD home as their sole residence during the three-year owner- occupancy term.
(5) Q. Does the $100 down payment apply only to the 203(k) program?
A. No. The $100 down payment applies to all FHA-insured mortgage programs.
(6) Q. Is there one discount (50 percent)?
A. Yes. This is the discount for properties in revitalization areas, and for properties that meet the exception criteria.
(7) Q. Will the teacher be offered the property before interested non-profit organizations or government agencies?
A. No. The list of available properties must be made available simultaneously.
(8) Q: How will the teacher be able to obtain access to the property?
A. Keys are available at our office in Queens at 10703 Rockaway Blvd Ozone Park, NY 11417 during business hours 7 days a week. An officer can request to pick up a key at our Brooklyn or Bronx locations by appointment. There is a $1.00 duplication charge for the key.
(9) Q. What happens if a teacher wants to purchase a property that is advertised to the public?
A. If the property is: (1) located in a HUD-designated revitalization area, and (2) is unsold with no active offer(s) on it, then it may still be purchased by a teacher at the 50% discount. The teacher must submit a competitive bid at 100% of the listing price. The 50% discount will be applied at closing.
(10) Q. Will HUD provide a home warranty?
A. No. All sales are as-is, without warranty of any kind.
(11) Q. Can multiple unit properties (e.g. 2, 3 or 4 unit properties) be made available under the TND Program?
A. No. Only single unit properties may be offered for the TND program.
(12) Q. Can a teacher offer less than the value established by the M&M contractor?
A. No. The contract sales price must be the value established by the M&M contractor.
(13) Q. Will the teacher be required to pay an earnest money deposit when submitting contract for a property?
A. No.
(14) Q. Will HUD pay a sales commission and/or all or part of the closing costs?
A. Yes, but the amount is deducted from the teacher’s discount. Example: The list price is $80,000 and the teacher requests closing costs of $2,000 and commission of $4,000. With the 50% discount = $40,000, at closing the teacher’s discount is reduced to $34,000.
(15) Q. Can the teacher sell the property for whatever the value is after the 3 years and keep any profit?
A. Yes.
(16) Q. What happens to a teacher who is separated from their agency within 3 years of the purchase?
A. Nothing. However he/she must be in good standing with the agency when the contract is signed.