The Teacher Next Door – A Great Niche

Mortgage and Lending with InMotion Real Estate Institute

Today an agent/friend called and asked me to put together some marketing collateral for teachers.  I immediately began my research, thinking of a Department of Community Affairs program that loves teachers.  Then I remembered The Teacher Next Door, a program established by HUD to offer single-family houses, condominiums, and townhouses to teachers at a 50 percent discount. If the "HUD acquired home" cost $150,000, the borrower pays only $75,000.  How's that for a bargain?  It gets even sweeter.  The teacher may also apply for a FHA-insured mortgage with a down payment of only $100 and he/she may finance all closing costs.  Are you loving this yet?

Well, there's more to the story.                                                  

The goal of this program is to encourage teachers to buy homes in revitalization areas across the nation.  As per the guidelines, you must be "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." 

However, there are property type restrictions (i.e. No duplexes, no triplexes).  Also, the homes cannot be other real estate for sale in the area (so forget the 3-bedroom home in the new subdivision down the street-no new construction).  HUD sells all qualifying homes as-is and it does not provide any warranties. 

The good news-there are tons of revitalization areas across the country listed and sold exclusively over the Internet. Every week a bid is awarded.  And the bid must be the amount of the list price. The computer randomly selects each bid and it is posted each week on the web. I advise clients to enlist the services of a professional real estate agent even though they think they understand the program requirements and bidding process.

It's important to note that a borrower will be required to sign a silent second mortgage and note for the discount amount. No interest or payments are required as long as they fulfill the three-year occupancy requirement. For this point alone, I recommend that a borrower read the fine print carefully.  It turns out there are no free rides, even on a good neighbor program.  Here are a few URLs that will provide more information on this program. 

For Frequently Asked Questions, go to

To find out where these properties are located, visit:

For a Teacher Pre-qual Questionnaire:

A great niche in a down market.  Many teachers have never heard of this program and the targeted areas may be right in your backyard.  And a similar program exists for firefighters. 

Here's to your success,


Juanita McDowell

The FHA Originator

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Juanita McDowell

Marketing and Technology Trainer and Coach         404-955-9740     



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Toni Hogan - Houston, TX

Oh, were you reading my mind? LOL! There is a program like that for teachers, police officers, and military personnel here in Houston. I have been planning to sit down in the next few days to work on a marketing campaign focusing on teachers. I am also considering giving seminars on the topic along with a loan officer.

Keep us posted on how this niche unfolds. :-)

Nov 29, 2007 01:29 PM #6
Cecelia Marlow
The Federal Savings Bank - Chicago, IL
Wonderful contribution, thanks for sharing!
Nov 29, 2007 03:03 PM #7
Alan Barker
Boomerang Leads - Smithfield, UT

I just attempted to do my first Teacher Next Door program. It's not exaclty easy, atleast not here. There aren't a lot of HUD homes in Riverton Utah

Normally the few HUD homes that do qualify for the program are in pretty scary neighborhoods. This particluar one that my client bid in was actally in a decent area of Ogden. The house struggled, but anytime you can get a house for $42,000 it will be worth it. We did end up getting 1st backup position, so that gives us like a 3% chance of getting the house.


The other problem with the program is the restrictions on having to live in the school district. Narrowing it down to that criteria is almost imppossible to do for teachers looking for this program. 

Nov 29, 2007 04:37 PM #8
Fran Gatti
RE/MAX Integrity - Medford, OR
Managing Principal Broker - RE/MAX Integrity


My husband is a teacher, I'm an agent and I've never heard of this program.  Thanks for the heads up. 

Nov 29, 2007 04:41 PM #9
John Novak
Keller Williams Realty The Marketplace - Las Vegas, NV
Henderson, Las Vegas and Summerlin Real Estate
Nevada teachers face housing challenges every year. I'm going to check out the links and follow up with our Countrywide rep to see what we can do for 2008. Thanks for bringing this info to the Rain, Juanita!
Nov 29, 2007 04:44 PM #10
Julie Chapman
DR Horton - Lakeland, FL
New Homes Sales Lakeland Florida
This is a great program....thanks for sharing the information
Nov 29, 2007 05:16 PM #11
Kim Carpenter
Coldwell Banker - Alton, NH
Lake Winnipesaukee REALTOR -Lake Winnipesaukee Real Estate, NH
I have not heard of this one.  Sounds like a great oppotunity for the right people!  Thanks for the suggestion.  I will have to read further.
Nov 29, 2007 08:44 PM #12
Connor T. MacIvor
RE/MAX of Valencia CA - Paris911 - Valencia, CA - (888)SCVnest

Hey Juanita, I have been working this for years.  Thanks for sharing....

Connor MacIVOR

Nov 29, 2007 10:14 PM #13
Al Maxwell
Keller Williams - Marietta, GA
Real Estate Agent
That is quite amazing. Thank for passing along the info..Great stuff.
Nov 29, 2007 11:30 PM #14
Joeann Fossland
Advantage Solutions Group - Tucson, AZ
Master Certified Coach to Motivated Agents

Great post to help agents find an opportunity right now. You've made it easy with your research! Thanks for the contribution.

Nov 30, 2007 12:20 AM #15
Scott Smith
Coldwell Banker Residential Brokerage - Gloucester, MA
Gloucester & Rockport, Massachusetts
Thanks for the excellent idea. Our teachers need all the help they can get.
Nov 30, 2007 12:43 AM #16
Rebecca Savitski
BSR Real Estate Group - Cary, NC
NC Real Estate Listings
It is an awesome program - IF all requirements fall in line. I have a teacher I have been working with for over a year, there have been 2 possibilities but we were outbidded both times. Also kind of scary areas for a single woman but worth the opportunity. We are still trying.
Nov 30, 2007 12:51 AM #17
Max Douge
Exit Realty Enterprises - Frederick, MD
Juanita... Thanks for providing this information.  I plan on sharing it ASAP with some teachers I know.
Nov 30, 2007 05:22 AM #18

Go to for more information on mortgages for Teachers.


Troy Schuricht

Nov 30, 2007 05:50 AM #19
Robert L. Brown - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic
Great information. We have had that program here in our area for some time. Teachers deserve a break also.
Nov 30, 2007 08:51 AM #20
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
Good information. Thanks for sharing it. All the best.
Nov 30, 2007 03:20 PM #21
Misty Thomas
Houston Realty - Crosby, TX
Realtor Crosby, TX
Awesome idea! Thank you posting about the teacher next door...I will check it out right now! Love the idea!
Mar 30, 2008 01:46 AM #22
Heidi Henderson , NV
I don't know what's going on in the Las Vegas area, I keep thinking with all the foreclosures surely there will be some houses on HUD's (now) Good Neighbor Next Door, but basically for the past almost 5 years that I have been hoping to get a house there has been an occasional mobile home and that is it. It wasn't surprising during the housing boom, but I don't understand why with all these foreclosures nothing is in on HUD's teacher next door.
Apr 17, 2008 12:25 PM #23
Juanita McDowell

Thanks for the great feedback on this post. 


You might want to refer your question to HUD directly.  Here's their contact info:

U.S. Department of Housing and Urban Development
451 7th Street S.W., Washington, DC 20410
Telephone: (202) 708-1112   TTY: (202) 708-1455

Best of luck to all of you!

Juanita McDowell

Call me if you have any FHA questions.  404-401-6209

I'm now approved to do loans in all 50 states!

Apr 18, 2008 12:21 AM #24
Florida Private Golf Communities
Golf Life Properties, LLC - Palm Beach Gardens, FL
Finding Home Never Felt Better!

I've sold approx 50 homes using the Teacher Next Door Program which also applies to Police Officers, EMTs & Firefighters in certain areas.  Definitely a great niche.

Jul 12, 2008 05:37 AM #25
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