How can a teacher with bad credit get approved for a mortgage to buy a home? As the largest National Home Buying Program in the U.S., it is a question we are asked every day. The honest answer is, it depends.
FICO scores between 500-580
FHA now allows loan approvals with FICO credit scores as low as 500. However, if your score is between 500 and 580, there are at least two important differences from the typical FHA loan: Down Payment: FHA requires all buyers with scores below 580 to put a minimum of 10% down. Whereas other loan programs may be as low as 0-3.5% down.
Hand-Underwriting: In addition to the larger down payment, with a score below 580, FHA will require that the application go through a process known as “hand-underwriting,” as opposed to the typical automated process. The underwriters will be looking for a specific hardship to explain the low credit score and will likely need a good “letter of explanation”
Compensating factors: During hand-underwriting, the underwriter will consider compensating factors, to get the loan approved for you. These may include things such as a long and stable employment history, high income, excellent rental history and high cash reserves. A low debt-to-income-ratio will also help. For example, 29/41. (29% or gross for PITI and 41% of gross total monthly debt.)
Teacher Next Door accepts all applications, regardless of credit score and our Preferred Lenders will work hard to get a loan approval for you. Many buyers with scores below 580 may find it necessary, or easier, to repair their credit prior to moving forward with a home purchase. Teacher Next Door’s Fresh Start Program could be a possible solution to help you raise your score.
FICO score of 580+
If your score is above 580, you should be able to get an FHA loan with only 3.5% down payment. You may also not need to go through the hand underwriting process, making it easier to get approved.
Grants and Down Payment Assistance for Teachers
All teachers and school employees are eligible for the Teacher Next Door GRANT, regardless of credit score. However, you would still need to qualify for the mortgage financing. With a credit score above 580, you may be eligible for down payment assistance. Teacher Next Door requires each of our three national Preferred Lenders to offer several different down payment assistance options. These DPA programs may include Home in Five Advantage, Georgia Dream, Florida First, Chenoa, Unison and several others. When you apply through the Teacher Next Door Program, a TND Program Specialist will contact you to go over the various options. A credit check is not required to complete the pre-application
If you have other Questions about the Teacher Next Door Program, please visit the Frequently Asked Questions section at
www.teachernextdoor.us/FAQs Teacher Next Door ReviewsAPPLY NOWFresh Start Program
With us every step of the way!"We wanted to give a shout out to Cheri Aumond-McLean for helping us find our dream home here in Tampa, FL. She was with us every step of the way (and I definitely appreciated her quick responses to ALL of my questions). She gets stuff done! Without this program, we would have been at a loss during the whole process. We appreciate the team (Cheri, Jose, Albie, and everyone else behind the scenes) that came together to guide us - we're at a loss of words for how thankful we are!"Danielle Matte, TeacherTampa, FLRead more Certified Buyer ReviewsAPPLY NOW
March 18, 2018 - Lakeland, FL Florida high school math teacher and first time home buyer, Wanda Miller, is the latest recipient of the Teacher Next Door housing grant. On Friday, Wanda and her family closed on their new home in Lakeland and received over $5,000 in home buyer assistance through the Teacher Next Door Program.
Often, saving for a down payment is the biggest challenge facing first time home buyers. Teacher Next Door is the largest National Home Buying Program in the U.S. Through this nationwide program, teachers may receive grants, downpayment assistance and other benefits to help them achieve the dream of home ownership. While many program participants are first time home buyers, this is not a prerequisite to participate. The Teacher Next Door Program is not just for classroom teachers. All school employees, including support staff and administration are eligible for the program and receive the same benefits, with the exception of HUD's GoodNeighbor Next Door program, which has additional limitations. Other public servants, such as nurses, law enforcement and firefighters, are included as well. For a complete list, CLICK HERE. For additional detail, you may visit the official website, at www.teachernextdoor.us.APPLY NOW Teacher Next Door Reviews
Congratulations to new first time home buyer Ashley Fair! We wish you many happy memories in your lovely new home. Special thanks to TND Program Specialists Maria Hickman for helping make dreams come true.For info on GRANTS, down payment assistance and other benefits for first time home buyers visit https://www.teachernextdoor.us/First-Time-Home-Buyer-Program.FAQ'sTeacher Next Door ReviewsAPPLY NOW
Congratulations Vickie Whitecotton on your beautiful new home! Vickie is an ER Nurse in downtown Orlando. We wish you many happy new memories. Thanks to Nurse Next Door Super-Realtor Javin Lopez for your help and contributions to the community. Thanks, NND Loan Officer, Mike Jones for your excellent service!
"The Teacher Next Door program has helped us tremendously at getting us into a new home that fits for our family. As a blended family of five kids - Sheff helped us to get the mortgage loan and understand the mortgage process. He had weekly updates and very easily answered our questions. Now that we were pre-qualified, we then next turned to Cheri to help us find a house that fit our needs. She was very prompt via text messaging and emailing for questions about houses.She was also very flexible to fit our schedule at looking at houses for us to see. After we found our house, Cheri and Sheff did everything in a exceptional manner and very prompt at getting the paperwork processes through the lender. Also, April and Caress contributed to helping us with paperwork and questions needed for this to happen. At the end of the day, we are in a new home that meets our needs and looking forward to raising our family in our home.
The Teacher Next Door Program has met our exceptions!"
Thank you to all,
Amy and Justin
If you are considering purchasing a new home in 2019, this is a great opportunity! For more information and to apply, visit www.TeacherNextDoor.us, or CLICK HERETeacher Next Door also has extended benefits to include nurses, law enforcement and other eligible public service professionals. If you are not a teacher and would like to determine your eligibility, please visit https://www.teachernextdoor.us/Home-Buying-Programs or CLICK HEREAPPLY NOWTo read more Teacher Next Door Reviews CLICK HERE.