NJ Loan Program: The Teacher Next Door Program
The Teacher Next Door plan is a type of NJ loan program established by the Department of Housing and Urban Development (HUD) to offer single-family houses, townhouses, and condominiums for sale to a teacher at a 50 percent discount. The goal, therefore, is to encourage teachers to buy homes in low and moderate-income neighborhoods to strengthen New Jersey communities by encouraging public and private school teachers to live within the communities.
The Teacher Next Door NJ Loan Program: Who Can Participate?
The Teacher Next Door Program is open to any person “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-12.” Therefore, in order to qualify for this unique NJ loan program, participants must certify that they are employed by an educational agency that serves the school district or jurisdiction in which the home they are purchasing is located.
Furthermore, a teacher wishing to purchase a home under the Teacher Next Door Program must be in good standing with their employer. Your employer must certify that you are a full-time teacher or school administrator. In addition, you do not have to be a first-time homebuyer to participate. However, you cannot own any other home at the time of the close on your Teacher Next Door Program home. Finally, you must agree to live in the HUD home as your only residence for three years after you move into it.
What are the Benefits of the NJ Loan Program for the Teacher?
The teacher may purchase the property at a fifty percent discount from the list price. For example, if a HUD home is listed for $200,000, a teacher can offer $100,000 to buy it. To further make the HUD home even more affordable, you may apply for an FHA-insured mortgage/loan program with a down payment of only $100 with the ability to finance all of the closing costs.
Qualifying homes, under this NJ loan program, are restricted to specifically designated single-family homes, townhomes, and condominiums that are located within the revitalization areas. Other types of properties, such as a duplex or triplex, do not qualify for this program. In addition, the homes must be HUD acquired homes and cannot be other real estate for sale in the area (i.e. VA foreclosure homes, resale homes, or new construction). Furthermore, HUD sells all qualifying homes as-is. Therefore, HUD does not provide any guarantees or warranties.
However, if the home that your are interested in purchasing does need repairs, you may use the FHA’s 203 (k) mortgage/loan program. This program allows you to finance both the purchase of the home and the cost of the needed repairs. As a result, you have the benefit of one NJ loan program for both costs and one monthly payment.
Since homes sold through the Teacher Next Door Program are primarily located in designated revitalization areas there actually may be additional assistance from state and local government sources.