Teachers and principals at nine high priority schools are being offered generous housing incentives, Mayor Bob Corker announced at City Hall on Thursday afternoon.
He said the Lyndhurst and Benwood foundations have provided $600,000 that will allow 60 teachers to get 10% of the total cost of the home up to $10,000.
To get the full $10,000 off, the teachers must stay at the schools for five years.
In addition, houses bought in one of the designated downtown neighborhoods only require a $3,000 down payment.
The buyer is eligible to take advantage of a second mortgage at a special Chattanooga Neighborhood Enterprise rate of 6 percent to cover 20 percent of the appraised value (maximum loan of $25,000).
To qualify, high priority school teachers must purchase a home in one of nine Chattanooga neighborhoods: Highland Park, Southside, Martin Luther King, Bushtown, Ridgedale, Oak Grove, East Chattanooga, Hill City or Alton Park.
The high priority elementary schools are Calvin Donaldson, Clifton Hills, East Lake, East Side, Hardy, Hillcrest, Howard, Orchard Knob and Woodmore.
Officials said the program "provides tremendous cost savings for qualified teachers."
For example:
Assuming a $100,000 purchase price on a home, a traditional FHA loan would require the buyer to pay an approximately $3,000 down payment and closing costs of approximately $4,300, meaning that with a 7% interest rate, the buyer would be responsible for an $847.77 monthly payment. Through the partnership with the Community Education Alliance, Chattanooga Neighborhood Enterprises, the Lyndhurst Foundation and the Benwood Foundation, the scenario is much different, it was stated. Assuming the same $100,000 loan amount, if the teacher pays a $3,000 down payment, a lower closing cost of approximately $4100, takes full advantage of the loan forgiveness program, receives a lower 6.5% interest rate on the first mortgage and the 6 % rate on the second mortgage, their monthly payment is reduced to $695.92. This example results in a $151.85 monthly savings.
Because of its flexible design, the program allows participants to fold their closing costs or renovation costs into the total loan amount.
This housing incentive is available to any teacher who teaches in a high priority school and makes a decision to a buy a home in one of the targeted neighborhoods during the next three years. The maximum purchase price of the home is $135,000.
Officials said, "Through this incentive, the Community Education Alliance, Chattanooga Neighborhood Enterprise, the Lyndhurst Foundation and the Benwood Foundation are working to attract high performing teachers to our City’s high priority schools."
Teachers interested in learning more about this program and the opportunities available in Chattanooga’s high priority elementary schools should call the Community Education Alliance hotline at 423-425-3500 or email at CEAinfo@mail.chattanooga.gov.