Recruitment & Retention

Freddie Mac To Expand Zero-Down Teacher Housing

By Julie Blair — May 16, 2001 3 min read
  • Save to favorites
  • Print

Freddie Mac is seeking partnerships with teacher-retirement systems around the country to build an innovative program that provides teachers and other school employees with zero-down-payment mortgages, a service the housing-finance company now offers in California.

The CalSTRS Home Loan Program, unveiled last spring, was the first in the nation to involve public pension funds, and aims to help lower- or middle- income employees afford their own homes, said Dwight Robinson, a spokesman for Freddie Mac, based in McLean, Va. The congressionally chartered corporation packages mortgages and sells them to investors as a way to maintain a supply of affordable housing.

The CalSTRS program has become so popular in the Golden State that the company aims to duplicate the effort in other parts of the country where modestly paid educators and other school workers often find homeownership out of reach.

Such an effort works to recruit and retain educators during a time of teacher shortages and brings stability to the communities where they live, Mr. Robinson added.

“When we launched this program in 2000, we said we would do $100 million in loans over the next few years,” he said. “We financed $400 million of teacher mortgages in 12 months— that’s 40 percent more activity than we expected.”

To date, more than 1,400 people in California have taken advantage of the opportunity, he said. Some 661,000 currently employed or retired school employees are eligible for the program there.

Two Loans

The program is a good deal for teachers and others, Mr. Robinson said, because they aren’t required to make a down payment on a house, a cost that can run to thousands of dollars.

Under the California model, participants are required to take out two loans, he said. The first, which covers 95 percent of the cost of the home, must come from a credit union or commercial lender and be paid back in monthly mortgage installments. Those bank loans are purchased by Freddie Mac.

The second loan is picked up by the California State Teachers’ Retirement System, or CalSTRS, and goes toward the down payment, Mr. Robinson said. It does not have to be repaid until the home is sold.

A state’s employee pension plan for teachers would have to agree to participate in order for the program to work in individual states.

Essentially, the program increases a teacher’s buying power by about 25 percent, said Brad German, a spokesman for Freddie Mac.

“The zero-down option is an overwhelming success,” Gary Lynes, the chairman of the board of California’s retirement system, said in a statement. “The ultimate result will allow California to better address the need to recruit and retain teachers in the classroom.”

The high cost of living in many regions of the country dissuades many educators from relocating or staying in the profession, added Robert J. Reid, a member of the board of directors for the Center for Housing Policy. The center is the national research affiliate of the Washington-based National Housing Conference, a nonprofit membership organization that promotes high-quality affordable housing.

In San Diego, for example, the average income of an educator is $45,000, while the amount needed upfront to buy a two- bedroom house averages $69,000.

Many states and districts are offering various incentives in an attempt to attract and keep teachers. The U.S. Department of Housing and Urban Development began offering teachers breaks on houses last year, but recently suspended the program because of fraud and abuse by police officers, who also were eligible for the program. (“HUD Suspends Housing Program for Teachers,” April 11, 2001.)

Related Tags:

A version of this article appeared in the May 16, 2001 edition of Education Week as Freddie Mac To Expand Zero-Down Teacher Housing

Events

Budget & Finance Webinar Staffing Schools After ESSER: What School and District Leaders Need to Know
Join our newsroom for insights on investing in critical student support positions as pandemic funds expire.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Achievement Webinar
How can districts build sustainable tutoring models before the money runs out?
District leaders, low on funds, must decide: broad support for all or deep interventions for few? Let's discuss maximizing tutoring resources.
Content provided by Varsity Tutors for Schools
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
College & Workforce Readiness Webinar
Roundtable Webinar: Why We Created a Portrait of a Graduate
Hear from three K-12 leaders for insights into their school’s Portrait of a Graduate and learn how to create your own.
Content provided by Otus

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Recruitment & Retention Signing Ceremonies Honor Students Who Want to Be Teachers
In a growing number of schools across the country, student-athletes aren't the only ones in the spotlight. Future teachers are, too.
7 min read
The advisers of Baldwin County High School’s chapter of Future Teachers of Alabama pose with the seniors who are committed to a career in education in April 2024. From left to right, they are: Chantelle McPherson, Diona Davis, Molly Caruthers, Jameia Brooks, Whitney Jernigan, Derriana Bishop, Vickie Locke, and Misty Byrd.
The advisers of Baldwin County High School’s chapter of Future Teachers of Alabama pose with seniors who are committed to a career in education in April 2024. From left to right: Chantelle McPherson, Diona Davis, Molly Caruthers, Jameia Brooks, Whitney Jernigan, Derriana Bishop, Vickie Locke, and Misty Byrd.
Courtesy of Baldwin County High School
Recruitment & Retention Why Your Next Teacher Job Fair Probably Won't Be Virtual
Post-pandemic, K-12 job fairs have largely pivoted to in-person events. But virtual fairs still have a place.
4 min read
Facility and prospective applicants gather at William Penn School District's teachers job fair in Lansdowne, Pa., Wednesday, May 3, 2023. As schools across the country struggle to find teachers to hire, more governors are pushing for pay increases and bonuses for the beleaguered profession.
Facility and prospective applicants gather at William Penn School District's in-person teachers job fair in Lansdowne, Pa., Wednesday, May 3, 2023.
Matt Rourke/AP
Recruitment & Retention How Effective Mentors Strengthen Teacher Recruitment and Retention
Rudy Ruiz, founder of the Edifying Teachers network, shares advice on what quality mentorship entails for teachers of color.
3 min read
A teacher helps students during a coding lesson at Sutton Middle School in Atlanta on Feb. 12, 2020.
A teacher helps students during a coding lesson at Sutton Middle School in Atlanta on Feb. 12, 2020.
Allison Shelley/EDUimages
Recruitment & Retention What the Research Says Some Positive Signs for the Teacher Pipeline, But It's Not All Good. What 3 Studies Say
Teacher-prep enrollment is stabilizing, but school-level turnover is still high.
8 min read
A classroom at Penn Wood High School in Lansdowne, Pa., sits empty on May 3, 2023. Teachers in the state left their jobs at an accelerating rate, according to an analysis that found attrition in Pennsylvania doubled in the 2022-23 school year. New studies paint a complex picture of the national pipeline.
A classroom at Penn Wood High School in Lansdowne, Pa., sits empty on May 3, 2023. Teachers in the state left their jobs at an accelerating rate, according to an analysis that found attrition in Pennsylvania doubled in the 2022-23 school year. New studies paint a complex picture of the national pipeline.
Matt Rourke/AP