STRS loans are special loans available to public school district and community college employees in the state of California who are members of the State Teachers' Retirement System.  You can actually qualify for a STRS loan even if you are an inactive STRS member, as long as you have money in the STRS retirement account or if you are a retired STRS member.  These loans are only for people who plan on the home they are purchasing being their primary residence.  Also, the STRS loan  is only for STRS members who are buying a home in California.   


 
There are 3 different types of STRS home loans.  There is a Conventional Standard STRS Loan, a 80/17 STRS loan, and a reverse mortgage STRS loan.   First time buyers will consider either the conventional Standard Loan or the 80/17 Loan.  The Conventional Standard Loan offers both a 15 and 30 year mortgage, whereas, the 80/17 Loan offers a 30 year mortgage.  Both of these types of home loans boast a fixed interest rate. The main difference in the loans is that the 80/17 loan is actually 2 loans, You start paying the first loan (80%) of the home value right away, then 5 years down the road, you start paying the 2nd loan which comprises 17% of your home value.  Another difference is that the 80/17 loan requires a 3% down payment and the Conventional Standard Loan requires 5% down payment.  Another big difference between the two loans is that to qualify for the 80/17 loan, you cannot have any other home loans in your name, where as the Conventional Standard Loan you may own other properties.  Lastly, STRS offers a reverse Mortgage.  A reverse mortgage can be beneficial to homeowners who are 62 or older in order for them to access equity in their homes.  If the homeowner chooses a reverse mortgages Loans can be arranged as lump sum, monthly payment, or line of credit. 

Almost any Home Mortgage company can handle a STRS loan.  There are several financial institutions throughout California who can process this loan.  The loan requirements will not change from one mortgage institution to another. 

There are many advantages of choosing a STRS loan.   STRS loans have very competitive rates.  In addition, the lender will provide you with a free 45 day interest rate lock to protect you from rising interest rates.  CalSTRS will offer you a float down option if rates fall after you have applied for your loan in order to save you additional money.   Another advantage is when using an 80/17 loan; homeowners have a break on their mortgage up front for the first five years, before having to begin payments on the second loan.  This allows public school employees time to gain income as they naturally progress up the pay scale.  Also, any income derived through the CalSTRS Home Loan Programs goes directly to the State Teachers’ Retirement Fund, so your money really is working for you.  Finally, CALSTRS has negotiated discounts on escrow fees and insurance rates so that you can save additional money when purchasing a home.