About the Teacher Next Door program

April 26, 2024

MOHCD helps SFUSD educators buy their first home in San Francisco. It provides $40,000 for a market-rate unit, or $20,000 for a below-market-rate unit. It is typically layered on top of other MOHCD loan programs, such as DALP or City Second if additional funding is needed.

The loan is forgiven after 10 years if all program requirements are met. There is no interest and no shared appreciation.

Applicants must work with a MOHCD-approved lender to request a TND loan. See MOHCD's loan application process.


Program Details

Back to top


There are no fees when applying for Teacher Next Door funds; however, there is a nonrefundable fee if you are applying with a Mortgage Credit Certificate. See MOHCD program fees.

Back to top

Maximum loan amount for each household

Back to top

Borrower eligibility

  • Employee of SF Unified School District (SFUSD): TND Borrowers must be educators currently employed with the San Francisco Unified School District (SFUSD). SFUSD Educators include teachers, paraprofessionals, and certificated staff (including counselors, nurses, speech pathologists, psychologists, behavioral analysts, social workers, Special Education (SPED) Content Specialists, and librarians). At the time of application, the Borrower must provide a paystub or letter of employment from SFUSD.
    • Each household is limited to one TND loan, regardless of the number of SFUSD educators in the household.
  • First-time homebuyers: All adult household members must not have any ownership interest in a residential unit in San Francisco for the last three years. 
  • Completed homebuyer education from Homeownershipsf.org
  • Maximum Income Limits: household income must not exceed 200% of the Area Median Income (AMI).
    • The combined income of all household members 18 years or older, who will be living in the property, must be included in the determination of income. The combined household's income must be projected as an annual income. It should be assumed that the current income would continue for the next 12 months.
    • Maximum loan amounts are tied to the household income category.
  • Minimum Borrower Contribution: Borrower must contribute a minimum of 1% of the purchase price toward the down payment or closing costs. The entire 1% can come from gifts, if necessary.
  • Liquid Assets: Borrower must have no more than $60,000 after purchase. There is no limit on liquid assets before purchase.
  • Post-Purchase Reserves: Borrower must have a minimum of 3 months’ reserves after purchase. In addition to Liquid Assets, vested funds from retirement accounts that permit withdrawals may be also used for reserves. This reserve should include 3 months’ of:
    • Principal
    • Interest
    • Property taxes
    • Hazard insurance
    • Homeowner’s association dues
  • Occupancy: The property must be owner-occupied within 60 days of closing and during the life of the loan.
  • Eligible Household Member:  An eligible household member must either be:
    • On title and loan of the property. All spouses or domestic partners must be included in the household and must appear on the application, title, and loan for the City Second loan.
    • Listed as a dependent on tax returns. All household members who are under 18 years of age must be the legal dependent of an adult household member, as listed on the two most recent tax returns. An unborn child will be not counted as a household member. Elderly adult household members may be considered as dependent as long as they are listed as dependent on the two most recent tax returns. All income from dependent adults and children must be included in the total household income. A spouse or domestic partner of any titleholder is not considered a dependent.

Back to top

Property eligibility

  • Property Requirements: The property must be Single-Unit Residences located in San Francisco. The residences may be a single-family house, Condominium, Townhouse/Town Home, Loft or Live-Work Unit (as long as the property will be used as the owner’s principal residence). Rental of any portion of the property is NOT allowed.
  • Property Size Requirements: There is no requirement for the size of the household to be compatible with the size of the unit being purchased under the TND program.
  • ​Purchase of Tenant-Occupied Property: A TND borrower cannot purchase a housing unit where any unlawful rental eviction has occurred.
  • Property Flipping: TND cannot be used to purchase properties resold within 90 days and priced more than 20% above the initial purchase price.

Back to top

Financing requirements

  • Layered Financing: The TND loan may be layered with other City programs, such as Downpayment Assistance Loan Program (DALP), City Second Loan Program (CSLP), and Below-Market Rate (BMR) Program.
    • The Borrower must meet all of the other eligibility requirements for those programs. 
    • In the case of any conflicting requirements, the more restrictive will apply. 
  • Lien Position: TND loan must be in junior lien position behind the first mortgage, BMR lien and/or DALP.
  • First Mortgage Requirements: The first mortgage loan must be a 15- or 30-year fixed-rate mortgage. The mortgage payment must be fully amortized. 
    • Loan Types not allowed: Reverse mortgage, stated income, ARM (adjustable-rate mortgage), reverse mortgage, interest-only, negatively amortizing, balloon payments
  • Impounds: The first mortgage lender must collect and manage impound accounts for property taxes and hazard insurance for the loan term.
  • Loan-to-Value Requirements (LTV and CLTV): The minimum first mortgage Loan to Value (LTV) cannot be less than 50% of the purchase price or appraised value, whichever is less. The maximum Combined Loan to Value (CLTV) cannot exceed 97%, which includes the first mortgage, TND and any other borrowed subordinate financing. 
  • Front-End (Housing) Ratio: No less than 30% and no more than 40%
  • Back-End (Total Debt) Ratio: No more than 45%
  • Co-Signing: Co-signing for a MOHCD loan by a non-household member is not allowed.
  • Loan Signing: No power of attorney is allowed. All applicants must be physically present to sign loan documents.
  • Closing Costs: TND Funds may be used to pay for non-recurring closing costs up to 2% of the purchase price or appraised value, whichever is less.

Back to top

Loan terms

  • TND Loan Terms: The term of the TND is 10 years. There is no interest, nor shared appreciation. The loan is due upon sale, rent or title transfer of the property, or upon borrower’s unemployment with the SFUSD at any time during the entire loan term. Borrower must remain an educator with SFUSD during the entire loan term. If any defaults occurred within 5 years of the date the loan is issued, the loan must be paid off in full.
    • After the 5th year, the loan is forgiven at a rate of 20% per year, and at the end of the 10th year, the loan is forgiven in its entirety. The following chart illustrates repayments of TND loans in the amount of $20,000.
  • Loan Reservation: TND funds, as specified in the commitment letter issued to a borrower, will be placed on reserve for a period of no more than thirty (30) days from the date of the commitment.

See all MOHCD loan terms.

Back to top

Teacher Next Door manuals and documents

Back to top

Training for participating lenders

Mortgage Loan Officers (MLO) or mortgage brokers who would like to become participating lenders for MOHCD's homeownership programs, including BMR DALP, City Second, DALP, MCC and TND must complete the required training and pay the required fee. Each individual MLO or mortgage broker must complete the training every year.

See annual training information.

Back to top