The Teacher Next Door – A Great Niche

By
Real Estate Mortgage Broker 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 http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndfaq.cfm

To find out where these properties are located, visit: http://www.hud.gov/offices/hsg/sfh/revite/abtrevt.cfm

For a Teacher Pre-qual Questionnaire: 

http://www.hmbireo.com/forms/9549-b.pdf

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

Posted by

 

Juanita McDowell

Marketing and Technology Trainer and Coach

Juanita@InMotionConsult.com         404-955-9740               WWW.InMotionREI.com

                                

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Rainmaker
652,246
Bob & Carolin Benjamin
East Phoenix Arizona Homes
Benjamin Realty LLC
Good information. Thanks for sharing it. All the best.
November 30, 2007 11:20 PM
Rainer
21,037
Misty Thomas
Realtor Crosby, TX
Houston Realty
Awesome idea! Thank you posting about the teacher next door...I will check it out right now! Love the idea!
March 30, 2008 08:46 AM
Anonymous #23
Anonymous
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.
April 17, 2008 07:25 PM
Anonymous #24
Anonymous
Juanita McDowell

Thanks for the great feedback on this post. 

Heidi,

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!

April 18, 2008 07:21 AM
Rainmaker
76,819
Nishika Jones Green ~ South Florida Waterfront Homes
Urban Oasis Realty

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.

July 12, 2008 12:37 PM
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Juanita McDowell

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Additional Information

Welcome to my blog! I'm a lifelong learner and I love to give tips on how to use technology to better market your real estate business. If you have any questions, I'd love to be of service. I teach courses online and offline at various schools and conferences across the United States. For speaker engagements contact Deborah Douglin on 404-955-9740.