State Housing Assistance Programs for Teachers: A Sampler

Last Updated: November 06, 2008

This article appeared in the November 2008 Rural Policy Matters.

What to do about housing for teachers is a long-standing issue in American education, especially in rural communities. It used to be that many teacher contracts included housing stipulations: the teacher (especially if it was a single woman) had to "board" with an approved family, or live next door to the school and start the fire in the potbelly stove every morning. Some larger rural schools — especially "mission" schools, settlement schools, and reservation schools — required teachers to live on campus in "teacherages," dorms, or staff housing.

That was in the old days.

These days, the housing challenges for teachers have more to do with finding and paying for a good place to live. That can be especially daunting in lower-wealth or very sparsely populated rural communities where teacher salaries are lower than average and where there are few sound and comfortable homes available for rent or purchase. All of these circumstances contribute to the difficulty many rural schools have in recruiting and keeping teachers.

A growing recognition of the problem has led some states and districts to create housing programs and public policies to lure teachers into the profession or to targeted hard-to-staff schools.

RPM did a quick review of housing assistance programs for teachers. Here's the skinny on private, local, federal, and state programs:

Private mortgage lenders target teachers: There's no shortage of private companies and mortgage brokers who claim to have special mortgage options for teachers. Often these websites claim great appreciation for those who labor in the classroom and many even look like "official" or state programs. But this is a buyer-beware market and teachers should approach lenders with appropriate skepticism and clear understanding that they are in the private market.

Some local districts run their own programs: Some school districts, especially in sparsely populated areas of western states, own homes that they rent to teachers at discount rates (and usually to offset lower-than-average salaries). Other districts work with local residents to identify unoccupied homes and convince their owners to make them available for rent or sale to teachers.

The federal Good-Neighbor-Next-Door Program (formerly Teacher-Next-Door) allows full-time teachers (and other certified K-12 staff) to purchase a home owned by HUD (Housing and Urban Development, but rural areas are included, too) in designated "revitalization" areas at a 50% discount on the HUD sale price. Teachers may also be eligible to apply for low down payment, financing of closing costs, and renovation loans. The program's goal is to encourage teachers to buy homes in low and moderate income communities. There is no income requirement and the borrower does not have to be a first-time home buyer. But the teacher cannot own another house and must live in the residence for three years. Available homes are listed online and change daily.

State programs: Among states that provide housing assistance to teachers (most don't), programs tend to fall into two general types. The first provides attractive mortgage financing or forgivable loans applicable to some portion of the mortgage or closing costs to any teacher in exchange for a commitment of service for a designated number of years. The other type of program provides housing assistance to teachers who agree to teach in a hard-to-staff school for an agreed-upon time. The list and descriptions of state programs below are indicative of the types of programs some states are offering but the list does not necessarily include all programs or all states.

Mississippi: The Mississippi Critical Teacher Shortage Act provides assistance of several types, including loan forgiveness and housing support, to teachers in 47 school districts identified as having a shortage of teachers.

The Mississippi Employer-Assisted Housing Teacher Program provides teachers in identified districts up to $6,000 in a forgivable loan to cover closing costs on the purchase of a home. The house must be located in the same county as the school district and teachers must commit to teach in the district for three years. Teachers of any income level may participate and the program is not limited to first-time home buyers.

The state's Moving Expense Reimbursement program provides up to $1,000 in moving expenses for teachers who relocate into a district designated as a critical shortage area.

Louisiana: The Louisiana Teachers HomeBuyer Program provides low-down payment, low-interest rate mortgages for any certified full-time employee of a public school or district. Teachers are eligible on a first-come, first-served basis and funding is not targeted to hard-to-staff or low-wealth districts. There are no income restrictions.

Georgia: Although the state does not offer a housing program specifically for teachers, the Georgia Dreams Home Ownership Program provides affordable first mortgage financing and down payment assistance to moderate income borrowers in targeted (mostly rural) counties and to first-time borrowers (or those who have not owned a home in three years) in any county. The program imposes family income and purchase price limits, with lower limits in counties outside the Atlanta area.

California: The Extra Credit Teacher Program provides up to $7,500 or 3% of the purchase price of a home for first-time home buyers who are certified teachers, administrators, and other employees of high-priority schools. Schools designated as "high priority" fall into three categories, including those that score in the bottom 50% on state-wide tests, those in which at least 70% of students qualify for free or reduced-price lunch, or those that serve very at-risk high school students. Income and sale price limits apply and are established for each county.

Arkansas: The Arkansas Teacher Housing Development Foundation provides rental assistance and forgivable loans of up to $10,000 or 10% of the purchase price of a home for experienced teachers who work in a "high-priority" school district for five years.

Read more from the November 2008 Rural Policy Matters.