Community Education Alliance to provide downtown housing incentive for all high priority elementary school teachers
4/25/2002
FACT SHEET
Mayor Corker’s Community Education Alliance is focused on driving up educational achievement in the City’s nine high priority elementary schools. The Alliance is based on the premise that all children can learn and that there is no more honorable a profession than that of the teachers and principals who teach our children.
Based on those principles, the Community Education Alliance has worked in conjunction with various other community initiatives already underway to find ways to recruit and retain great teachers in the nine high priority elementary schools. The effort specifically focuses on Calvin Donaldson Elementary, Clifton Hills Elementary, East Lake Elementary, East Side Elementary, Hardy Elementary, Hillcrest Elementary, Howard Elementary, Orchard Knob Elementary and Woodmore Elementary.
Recently, the CEA began a recruiting effort which provides financial incentives for qualifying teachers who agree to teach or are already teaching in one of the high priority schools.
Today, the CEA is announcing yet another important incentive which is geared toward enhancing this recruitment effort and ensuring a critical mass of excellent teachers in each of the nine schools. This exciting housing incentive is a great example of the positive impact which our City can realize when public and private resources are leveraged in innovative ways.
Any teacher who teaches in one of the City’s high priority elementary schools is eligible to take advantage of an innovative housing incentive made available through a partnership with the Community Education Alliance, Chattanooga Neighborhood Enterprises, the Lyndhurst Foundation and the Benwood Foundation.
Substantial funding for this program is being provided through a grant of $600,000, half through the Lyndhurst Foundation and half from the Benwood Foundation.
Teachers who teach in one of the high priority schools and are willing to commit to five years of service are eligible to participate.
Through this exciting program, these teachers are provided an opportunity to purchase a home, in one of the designated downtown neighborhoods, with a down payment of only $3,000.
The buyer is eligible to take advantage of a second mortgage at a special CNE rate of 6% to cover 20% of the appraised value (maximum loan of $25,000).
Through the Lyndhurst and Benwood grants, those teachers buying one of these homes are enrolled in a “loan forgiveness” program. This program essentially eliminates 10% of the total cost of the home (including rehabilitation expenditures) providing a loan of up to $10,000, with 0% interest, totally forgivable over a five year period of time.
The teacher will then qualify for a conventional 30 year first mortgage loan which will cover the remaining balance.
This specialized 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.
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 even allows participants to fold their closing costs or renovation costs into the total loan amount.
To qualify for the program, 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.
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.
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.
For more information, contact Todd Womack, Communications Director, at 423-757-5168
