Guide · Tennessee

Ten-month paychecks, summer gaps and a THDA loan for teachers

Tennessee K-12 teachers joined Homeownership for Heroes in May 2026. How lenders count a contract salary, summer school, a new August start date and student loans.

The quick answer: Full-time K-12 teachers and principals in Tennessee public and private schools have qualified for Homeownership for Heroes since May 2026. Lenders look at your annual contract, not the size of each check, and summer school or coaching pay needs its own history before it counts.

If you teach in Tennessee, the spring of 2026 brought good news. On May 5, during Teacher Appreciation Week, THDA announced that full-time K-12 teachers can use Homeownership for Heroes. That means the same 0.5% lower rate and down payment options that officers and firefighters have had for years. Now let's talk about the part that trips teachers up: how a lender reads a school paycheck.

Who counts as a teacher for this program

THDA's wording is kindergarten through 12th grade teachers employed in a full-time teaching position in a Tennessee public or private school. THDA's consumer page also names principals. A few practical notes:

Private schools count. A full-time teacher at a church school in Franklin is treated the same as one at a Metro Nashville public school.
Full-time is the key word. Substitutes, part-time teachers, aides and other school staff aren't named. A lender would have to review those case by case.
Principals: they're on THDA's consumer page but not yet in the Heroes section of the lender guide revised Sept. 21, 2026. Confirm with your lender before you lock.
Paperwork: THDA's lender guide asks for current Tennessee employment and a license or certification in your profession. Your teaching license is the obvious document, and your lender tells you what else it wants.

Ten checks, twelve months: how the math works

Lots of districts pay over fewer than 12 months, and some let you spread it out. The lender doesn't care about the size of each check as much as the annual number on your contract.

Freddie Mac's guide spells it out: when an annual salary is paid over less than 12 months, divide the annual gross by 12. Example only: a $54,000 contract paid in 10 checks of $5,400 is counted as $4,500 a month, not $5,400. At THDA's 45% debt-to-income cap, that supports about $2,025 a month in total debts, house payment included.

Homeownership for Heroes is an FHA, VA or USDA loan, and I couldn't confirm a written 10-month rule for those three. Most lenders do the same annual-divided-by-12 math, but your lender confirms how it handles your file.

Summer school, coaching and second jobs

Teachers are some of the hardest-working side-hustlers I know. Summer school, tutoring, coaching stipends, after-school programs. Here's the honest picture:

Summer school is treated as seasonal or secondary work in Freddie Mac's guide. With less than two years of history it may still be justified, but don't count on it.
A part-time second job under FHA needs two years without a break before it counts, averaged over those two years.
Stipends for coaching or department chair duties may be in your contract or paid separately. How a lender treats them depends on how they show up on your pay records, so bring the paperwork.

The good news is that most teachers qualify on base salary alone. Extra income is a bonus if it counts, not a requirement.

Starting a new job in August

Maybe you're finishing your degree at UT Knoxville or Austin Peay and you've signed a contract for fall. Can you buy before your first paycheck?

FHA: the handbook has no offer-letter provision. It does say a new graduate's time in school can satisfy the two-year work history, so you'd typically close after you start and have pay stubs.
Conventional loans: Fannie Mae and Freddie Mac both allow qualifying on a signed, non-contingent contract in some cases, with extra cash reserves to cover the months before your start date.

The catch: THDA's conventional option is Freddie Mac HFA Advantage, and it isn't clear the Heroes 0.5% discount applies to it. So a new teacher may have to choose between closing early on a conventional loan or waiting a month for pay stubs and a Heroes FHA loan. A THDA-approved lender can price both.

Student loans: the debt that sneaks up on teachers

Lots of teachers are on an income-driven repayment plan working toward Public Service Loan Forgiveness. PSLF forgives the rest of your Direct Loan balance after 120 qualifying payments while working full-time for a qualifying employer, and public schools count. Federal rules even count teachers as full-time if they work at least 30 hours a week on a contract of at least 8 months a year.

But lenders don't all treat those loans the same way in your debt ratio:

Loan type	If your payment shows $0
FHA	Lender uses 0.5% of the balance
Freddie Mac	Lender uses 0.5% of the balance, with a narrow exception near the end of PSLF
Fannie Mae	$0 can be used if documented

On a $40,000 balance, 0.5% is $200 a month in your ratio, even if you actually pay nothing. VA and USDA rules on student loans weren't verified for this guide, so your lender confirms those.

Memphis teachers: one more door

If you work for Memphis-Shelby County Schools, the City of Memphis runs a homebuyer incentive for full-time MSCS employees with at least two years of service. It lists up to 10% of the price, max $25,000, with no income limit, for a home inside Memphis city limits, subject to funding. Whether it can be combined with Heroes Plus isn't published, so ask a lender who works with both. Details are in the Shelby County guide.

Timing tips from the teacher's lounge

Close during the school year if you can. A lender verifying employment in July may get a slow answer from a closed district office.
Know your contract terms. Freddie Mac's guide treats an annually renewed education contract as continuing unless the lender knows otherwise.
Take the homebuyer class over a break. THDA requires it for every borrower, and the online option fits around grading.
Move-in rule: you have to move in within 60 days of closing, which lines up nicely with a June closing.

Grab your contract and last two pay stubs, then check your eligibility. We'll pair you with a lender who works with school-year pay every day.

Things people ask

Do private school teachers qualify for Homeownership for Heroes?

Yes. THDA's rule covers full-time K-12 teachers in Tennessee public or private schools.

How do lenders count a 10-month teacher salary?

Freddie Mac's guide divides the annual salary by 12. FHA, VA and USDA rules weren't confirmed, but most lenders use the same annual figure, and your lender confirms.

Does summer school income count?

Only with history. It's treated as seasonal or secondary work, which usually needs up to two years on record before a lender can use it.

Can I buy before my first teaching paycheck?

Conventional loans can sometimes close on a signed contract with extra reserves. FHA has no offer-letter rule, so a Heroes FHA loan usually closes after you have pay stubs.

Free printable: the Tennessee homebuyer checklist. Papers to gather, steps to follow, programs to ask about and questions for your lender, all on a single sheet. Grab the checklist