Mortgages for Teachers: Can a teacher qualify for a USDA loan after changing school districts?
With the school season upon us once again, mortgages for teachers has become a hot topic. We have some teachers who are changing to a new school district, and although they may have signed contracts, can that teacher close on a home before school starts?
In today’s video, I will explain how teachers and other professions may be able to qualify for a USDA loan in these situations.
Also, if you have not yet done so, feel free to download our newest “USDA Blueprint” with the link below. This guide is designed to help walk you through the USDA process step-by-step and is a great educational resource for both homebuyers and their Realtors alike.
Qualifying USDA Mortgages for Teachers
How does a teacher qualify for a USDA loan when changing school districts?
There can be tremendous excitement after one has accepted an offer to start a new position, but many times that quickly turns to frustration when trying to coordinate moving, purchasing a home, preparing for the first day on the job, and when the first pay date will be in order to verify income.
Fortunately, we have worked with these situations before and are able to confirm that USDA guidelines offer flexibility for certain professions where employment is accompanied by a firm offer letter along with meeting other terms.
In situations where an applicant is moving to a new employer and has a contract or offer to start employment within 60 days of loan closing, USDA guidelines will permit this scenario to be eligible provided the underwriter determines the applicant has reserves available after loan closing to cover all monthly liability payments and the new mortgage obligation until employment begins.
An example of this situation would be a teacher changing school districts who is staying within the same profession where we are able to document both current and previous employment.
Additionally, remember that if the applicant is not going to be on the new job by loan closing, then we must document the required reserves mentioned, but if the applicant will be on their new job by loan closing then a pay stub will be required.
Lastly, because USDA guidelines will require at least one year of employment history in order to use base wages, previous employment history will also need to be verified.
In summary, it can be possible for a teacher to qualify for a USDA loan if they are changing school districts and also be able to close on a home after a teaching contract has been signed provided certain requirements are met.
As a USDA approved lender, we are here to help. Just call or email to discuss your scenario and let us show you the “Metroplex” difference!