The LMU Faculty Housing Loan Program is for a new, primary residence purchase only. It is not intended to support the purchase of vacation and/or investment properties. Eligible faculty members may apply for the LMU home loan program after completion of one year tenure track services and contracted for the second year. One loan per household. The $150,000 home loan is in the form of a 2nd Deed of Trust and is payment free with 10% forgiveness annually on January 15 beginning after the loan has had its first anniversary. Annual loan forgiveness is taxable income to the employee. Participation requires continuous employment with the University, and application is no guarantee of approval. Prospective faculty borrowers should consult with a primary mortgage lender/broker to determine how this Program may be treated during an underwriting process. While the university home loan leads to a lower overall mortgage payment, it is often considered debt and not a home purchase “down payment”. In periods of high demand, qualified applicants will be prioritized based on an existing methodology. See LMU Faculty Loan Program Policy for details. Applications are accepted now through March 31, 2020.

Faculty Housing Loan Program FAQ

  • Tenure-line faculty may apply for the loan program as long as they have been at the University for at least one full calendar year. Only tenure-line faculty are eligible. Please see the Faculty Loan Program Policy for details on eligibility.

  • The application window opens once per year in the early spring (usually in February) with a communication from the Provost Office. The application window closes on March 31 of each year with no late applications accepted. If you would like an application form during this window, please contact the LMU Faculty Housing Office.

  • Tenured faculty applicants are prioritized over tenure-track. Please see the policy for more detail on prioritization. If qualified applications are greater than number of loans available under the program budget, then the policy prioritization process will be undertaken. Application is no guarantee of approval and demand can fluctuate year to year depending on many variables. Eligible faculty members are welcome to apply each year until approved.

  • No. The primary mortgage banks do not allow the LMU second trust deed loan to be used as a down payment as they require the borrower to have their own skin in the game. Primary mortgage banks may require anywhere from 5% down to 20% down on a new home purchase, depending on many variables. The benefit of the LMU home loan is that it lowers the overall mortgage size and monthly payments thus making home ownership more affordable.

  • No. The LMU home loan program is for new, primary residence purchases only. It cannot be used to refinance an existing mortgage on an existing home. The home purchased with the LMU loan must be a primary residence and consistently occupied by the borrower. The loan cannot be used for vacation homes or investment/rental properties as those are events of default, which may trigger the loan balance to become immediately due and payable. The LMU loan will only be funded during a new purchase escrow process.

  • You have a one-year window to use the loan once you have been approved. That window is from 06/01/XX to 05/31/XX each year (the university fiscal year period). If you do not purchase a home during this period, your loan option is terminated and you must reapply under the regular application process.

  • The LMU second trust deed loan has no interest or principal due as long as the qualified borrower remains in good standing at the university and there is no evidence of default. The $150,000 loan is forgiven each year over a ten-year period ($15,000 per year). Forgiveness starts on the first January 15 date one full calendar year after Loan Agreement date. For example, if the Loan Agreement is signed on June 1, 2018, the first forgiveness will begin on January 15, 2020. Loan forgiveness is considered taxable revenue. As such, loan forgiveness is amortized over the course of the calendar year (via every paycheck) for payroll/tax purposes.

  • No. Qualified borrowers are welcome to select whomever they prefer in the home buying process. The LMU Faculty Housing Office is happy to provide recommendations if asked, but the choice is ultimately up to the borrower. That being said, some of the larger mortgage banks will not work with the LMU loan program due to the second-trust deed aspect. Typically and based on experience, most faculty borrowers find greater success with regional or community banks. It is important to let the LMU Faculty Housing Office know who your selected mortgage bank/broker is during the purchase process.

  • Yes. If you sell your home the University will provide a demand notice to escrow for the principal balance due. If you then purchase a new primary residence, the University will likely roll that balance into the new home. See the Policy for more details. Note: cash-out equity refinancing is not allowed under the .

  • If you are no longer employed at the University your loan becomes due and payable with interest. See Policy for details. If you go on sabbatical, you will continue to receive forgiveness and you will continue to pay taxes on that forgiveness.

  • When you sign a Loan Agreement with the University we go on title to your property and record a Grant Deed via the County Recorder’s Office. The University remains on title to your property until the loan is fully forgiven or paid off. Once that occurs, the University will come off title by filing a Deed of Reconveyance.

  • No. The various LMU Faculty Housing Loan programs cannot be combined. Qualified faculty members who are receiving rental assistance may apply for the loan program. However, once the home loan is funded then rental assistance will cease with no exceptions.