downpayment assistance

Types of down payment assistance programs

CalHFA Government Assistance Program:

  • FHA assistance up to 6.50% available with max loan amount of $1,089,300.
  • Conventional assistance up to 6.0% with maximum loan amount of $647,200
  • Credit scores: 640-FHA/680-Conforming
  • 3.50% down assistance with silent 2nd loan at 2.5% deferred interest.
  • 3.00% closing costs assistance with silent 3rd loan at 0% interest.
  • 1-Unit SFR, Condo and Manufactured Homes, Guest Houses, Granny/In-Law Units are eligible
  • First time home buyers only (Must not have owned a home in last 3 years)
  • Non-occupant co-borrowers or Co-signers are not allowed.
  • CalHFA requires that at least one borrower complete online education class
  • Non-borrowing spouses are not allowed to go on Title.
  • The CalHFA subordinate liens MUST be repaid and are not forgiven

MaxONE & MaxONE Plus:

  • 100% CLTV FHA Loan to $726,200 with 3.5% assistance based on Sales Price or Appraised Value
  • MaxONE 2nd lien is a 0% fully amortized over 30 years, with a forgivable option
  • MaxONE Plus 2nd lien is 2% plus first lien rate and a 10-year amortization with payments required
  • Primary Residence Only
  • Min 600 FICO and No first-time home buyer requirement.
  • Non-occupant co-borrowers allowed per FHA guides.
  • Single Family Residences and 2 units only, PUDs, Townhouses, Condominiums
  • Home buyer Education: At least one borrower

Sapphire 3.5% Down Assistance:

  • 100% CLTV FHA Loan to $726,200 with 3.5% assistance based on Sales Price or Appraised Value
  • Do not have to be a 1st time home buyer
  • Borrower may own other residential properties
  • FHA 96.5% LTV with 3.5% assistance for down payment
  • 55% Max DTI with 600 minimum credit score
  • 1-2 units, SFR, Condo PUD and Town Home
  • Available in ALL States Except HI, NT, WA
  • No Income Limits and Non-Occupying Co-Borrowers okay

Chenoa Assistance:

  • Loan amount to $1,089,300 on FHA and $726,200 on Conventional
  • 3%, 3.5% and 5% down payment assistance available.
  • Forgivable assistance option: (3-3.5% forgivable after 3 years, 5% down forgivable after 10 years
  • Minimum 600. All borrowers must have at least one score
  • No income or purchase price limits
  • No first-time home buyer requirement
  • Education class certificate required with 600-639 score
  • No debt-to-income restrictions

Additional Assistance programs:

1. Good Neighbor Next Door

Perhaps the most valuable home loan for teachers is the Good Neighbor Next Door1 program, which can help educators save up to 50% on certain home purchases.

Good Neighbor Next Door offers up to 50% off the list price on HUD foreclosure homes. However, that only applies if you want to purchase in a “revitalization area,” as HUD defines it.

To qualify as an educator for this program, you’ll need to be a full-time pre-K through 12th-grade public school teacher. And you must agree to live in the home for at least 36 months.

HUD creates this 50% discount by taking out a silent second mortgage to cover half of the home price. This leaves you responsible for paying only the other half. HUD’s silent lien is forgiven after you’ve occupied the home for three years, satisfying the program’s primary residence requirement.

The Good Neighbor Next Door program helps law enforcement officers, firefighters, and EMTs, as well as teachers. The U.S. Department of Housing and Urban Development (HUD) runs the program. So you know you can trust it.

Want to find eligible properties in your area that are currently available with this teacher home buying program? Use HUD’s look-up tool.

2. Teacher Next Door

The Teacher Next Door2 (TND) program is a popular teacher home buying program. In collaboration with the U.S. Department of Housing and Urban Development (HUD), the program allows eligible teachers to purchase homes at a reduced price in designated revitalization areas. Typically, HUD acquires these homes through foreclosure procedures.

However, the Teacher Next Door Program does not limit teachers to only purchasing a home in a targeted area. It allows all classroom teachers, pre-K through 12th grade, public and private school teachers, and college and university professors to purchase any home on the market.

Qualified applicants are also eligible for the Teacher Next Door Grant and additional teacher down payment assistance. You can also pair TND with HUD’s Good Neighbor Next Door (50%) program, as well as other select first-time home buyer programs.

  • Up to $8,000 in grant money
  • Up to $10,681 in additional down payment assistance
  • Fees like application and broker fees are waived
  • Competitive interest rates
  • Discounted title fees

The TND home loan for teachers will also assist you with the loan application, helping streamline the process by working with you on your purchase, financing, and closing paperwork.

Teachers who want to take part in the program must get financing from a mortgage lender of their choice since the program does not offer financing directly.

3. Fresh Start Program

If you have a troubled credit history, the Fresh Start Program3, which is part of Teacher Next Door, might help you get the mortgage you want. This program doesn’t give out grants or down payment assistance, but it does offer free advice on fixing your credit. This can make it easier for you to get approved for a teacher home buying program.

As its website says:

"[Fresh Start] will discover exactly what credit challenges are preventing your mortgage loan from being approved and help you overcome these issues as quickly and efficiently as possible. This service has proven to be extremely effective in helping buyers raise their credit scores and make home ownership a reality. Consultations are free.”

For teachers, this means a direct path to improving financial health and moving one step closer to a successful home loan application. With such targeted support, home loans for teachers become not just a possibility, but a practical next step towards homeownership.

4. Homes for Heroes

Even if a teacher has saved enough for a down payment on a new home, closing costs and other fees can still be a big challenge. Homes for Heroes, Inc.4 can help teachers get these fees lowered, which will make it easier for them to buy a house. This program can save you money on closing costs, inspection fees, title fees, and more. Better yet, it can often be paired with other home buyer assistance.

Basically, if you’re an educator, signing up for teacher home buying programs like Homes for Heroes means you get to work with participating lenders and real estate agents who give you discounts on their services. You need to join first and then choose a professional from their approved network. The money you save from these discounts can really stack up.

For instance, programs like Homes for Heroes suggest you might keep an extra $2,800 in your pocket on the purchase of a $300,000 home. And if the home’s price is higher, you’ll save even more. If you’re a teacher looking into home loans for teachers, it’s definitely worth checking out if there are Homes for Heroes affiliates near you to help you cut down costs.

5. Government-backed home loans for teachers

It’s true; not everyone will do better with specialized home loans for teachers. Certain government mortgage programs are already so generous that they could exceed the benefits provided by popular teacher home buying programs.

All of these government-backed loans have the same goal: to make homeownership more accessible and affordable, especially for those who may struggle to meet the demands of conventional loan requirements. Because teachers frequently face financial challenges as a result of low salaries and high education-related debts, these loans can provide much-needed assistance in achieving their homeownership goals.

VA loans 100% Financing

A VA home loan is hard to beat if you are both a veteran and a teacher (or the spouse of either eligible group). You won’t need a down payment, and you’ll likely receive a competitive mortgage rate. Additionally, VA loans have no ongoing mortgage insurance, even if you put little or nothing down. Over other affordable options like the FHA loan, that is a significant advantage.

USDA loans 100% Financing

Similar to VA loans, loans guaranteed by the United States Department of Agriculture also let you buy with no down payment. USDA loans also offer lower interest rates and mortgage insurance rates than most other loan types.

For a USDA mortgage, eligibility depends on income limits and where you’re buying — it needs to be somewhere sparsely populated, rural, or suburban. Your income can’t exceed 15% above the local median.

Many teachers who work in rural areas could potentially take advantage of this program. USDA loans can offer 100% financing (no down payment), making them an attractive option for those who may struggle to save a substantial down payment.

6. Fannie Mae and Freddie Mac loans for teachers

Although not specifically among the top home loans for teachers, the mortgage programs offered by Fannie Mae and Freddie Mac are pivotal in providing affordable homeownership, especially for educators who contribute so much to our communities. These programs come with benefits that are especially advantageous to those in the teaching profession.

Fannie Mae's HomeReady Program 

HomeReady is intended to assist low- to moderate-income borrowers who have less than the average down payment savings. Teachers may benefit from this program because it has a low down payment requirement of as little as 3% and flexible funding, which means the down payment and closing costs can come from a variety of sources, such as gifts or grants.

HomeReady also provides lower mortgage insurance premiums than conventional mortgage insurance. To qualify, income limits based on the area’s median income apply, but these limits are waived if the property is located in a low-income neighborhood.

Freddie Mac's Home Possible Program

Home Possible, like HomeReady, is intended to help low- to moderate-income homebuyers. It also allows for a 3% down payment, which can come from a variety of sources, including family, employer assistance programs, secondary financing, and sweat equity. It also allows non-resident co-borrowers to be on the loan, which could help teachers qualify with a higher income level. Income limits apply again, but they are waived if you buy in a designated low-income neighborhood.

7. Your teachers union

If you’re exploring home loans for teachers, your membership in a teachers’ union can be an invaluable asset. Many unions, like the American Federation of Teachers (AFT), offer exclusive programs aimed at assisting with homeownership. Meanwhile, if you belong to the United Federation of Teachers (UFT), you could benefit from mortgage discounts through UFT-specific mortgage initiatives.

In addition to these union-specific offers, certain lenders provide UFT members with perks like reduced mortgage rates and lower mortgage insurance premiums. There are even opportunities to receive closing cost grants, which can be as substantial as $7,500.

Exploring AFT-associated lending programs is a smart move when considering your home buying plans. Simultaneously, it’s wise to investigate teacher home buying programs that might be available to you, including any state or local union-provided assistance. These opportunities can make the path to securing a home loan for teachers much more accessible.

There are thousands of DPA programs across the country. Each has its own rules about who’s eligible for help. So ask your Realtor or loan officer what’s available in your state and which assistance programs you might qualify for.

8. Local programs providing home loans for teachers

Some states have problems recruiting or retaining teachers. A number of those states offer special home loans for teachers as an incentive to move into certain school districts.

These tend to fall under the category of down payment assistance but may be more generous than other DPA programs available to the general population. For instance, you might get additional tax credits or grants.

As an example, the California Housing Finance Association (CalHFA) provides a lineup of resources, including grant programs, home loans for teachers with flexible guidelines and credit score requirements, first mortgage loans, and homebuyer education courses.

Again, a service like Teacher Next Door should be able to put you in touch with your local program, assuming there is one near you.

Get started today by calling (949) 293-6022 or complete our quick pre-qualification application.