FHA or conventional
Conventional at 3 percent down needs $1,250 less at closing and its mortgage insurance falls away once the loan reaches 80 percent of value, where FHA’s runs for the life of the loan below 10 percent down. But at today’s spread it costs $94 a month more and asks for $4,004 more income to qualify, because the conventional rate is higher and mortgage insurance is expensive at 97 percent loan-to-value. FHA is the cheaper entry today; conventional is the better loan to still be holding in year eight. Which one wins depends on the buyer’s credit score and how long they stay.
FHA at the TDHCA bond rate of 5.750 percent, the cheapest financing a Texas teacher can obtain, at a 28 percent front-end ratio. Dashed line is the $209,900 cheapest property on the market.
Cash to close is what gates a purchase, not the monthly payment, and the smallest figure in that row is $16,250. The median American household holds $8,000 in its transaction accounts.
The finding that carries this report
Time to reach $16,250, the cash to close on a $250,000 entry-level home with an FHA loan, saving 5 percent of gross income. The second bar adds the annual rent differential from Section 5, with no change in the household’s own saving.
Cash to close is 3.5 percent down plus closing costs at 3 percent. Savings-rate method follows NCTQ, which found in 2023 that a teacher needs 13.6 years to save a 20 percent down payment at a 10 percent savings rate. Household balance from the Federal Reserve Survey of Consumer Finances.
An entry-level aide needs 15.3 years to save an FHA down payment at Hutto market rents, and 3.9 years renting in an Upward community, without saving a dollar more than before.
The Upward rent schedule
Projected from Upward’s current Central Texas schedule, adjusted five percent for timing. Final tiers would be set against the employee survey on a salary-based sliding scale, where lower earners receive the larger discount.
| Home type | Projected Upward rent net, no concessions | Against gross rent | Against net rent | ||
|---|---|---|---|---|---|
| Detached gross | Discount | Detached net | Discount | ||
| 1BR | $835–$1,255 | $1,638 | 36% | $1,354 | 23% |
| 2BR | $1,045–$1,520 | $1,984 | 35% | $1,641 | 22% |
| 3BR | $1,420–$1,915 | $2,299 | 27% | $1,901 | 12% |
| 4BR | $1,655–$2,095 | $2,420 | 23% | $2,001 | 6% |
| Midpoint used here | $1,045 / $1,280 / $1,670 / $1,875 | Net rent applies a nine-week concession, the average across the detached comparable set | |||
Conventional multifamily for comparison, gross then net at seven weeks free: 1BR $1,301 / $1,126, 2BR $1,776 / $1,537, 3BR $2,330 / $2,016, 4BR $2,420 / $2,094. Discounts against those net rents are 7, 17, 17 and 10 percent. Section 1.4 charts all four series.
Read the right column
Upward’s rents are net. A below-market program does not run move-in specials, so the projected figures are what a household actually pays in month one and month twelve. The market columns are not comparable on their own: at gross rent the discount looks like 23 to 36 percent, and against what the market is really collecting today it is 6 to 23 percent.
Both numbers are true and they answer different questions. The net column is the fair comparison for a household signing a lease this month. The gross column is the fair comparison for 2028 and 2029, because concessions burn off and these rents do not, being set against salary rather than against the market.
Share of gross income spent on rent, at Hutto market asking rent and at the projected Upward rent, same right-sized unit. Dashed line is the 30 percent threshold.
Annual saving for an average teacher in a two-bedroom.
Annual saving for a two-teacher household in a three-bedroom home.
The entire starting-salary spread across the five districts, for comparison.
Profiles still cost burdened living alone. Shared occupancy addresses most of it.
Roommate matching is a standard feature of these communities, and the arithmetic of sharing is decisive for exactly the roles the single-occupancy chart leaves behind.
| Role | Annual income | 1BR alone | 2BR shared, $640 each | 3BR shared by three, $557 each |
|---|---|---|---|---|
| Child nutrition worker | $17,030 | 74% | 45% | 39% |
| Instructional aide, entry | $21,271 | 59% | 36% | 31% |
| Bus driver | $22,680 | 55% | 34% | 29% |
| Custodian | $28,396 | 44% | 27% | 24% |
| Instructional aide, top of band | $31,193 | 40% | 25% | 21% |
Shared figures divide the projected midpoint rent evenly by occupant. Roommate placement would be voluntary and matched through the district. Two further levers stay open for Phase 2: a studio or efficiency type not present in the current mix, and cutting the sliding scale deeper at the bottom.
A three-bedroom shared by three district employees costs each of them $557 a month. At that figure a bus driver, a custodian and an experienced aide all clear the 30 percent threshold, and an entry-level aide lands at 31 percent against 59 percent living alone.
Site options
Two paths, and the choice does not change the housing or the rents in Section 5. Upward can build on land Hutto ISD already owns, or acquire land in Hutto at market and build there.
Site program to follow
Unit mix, density, phasing and a sample site plan sit in a separate document, worked against a real survey rather than an assumed parcel. Nothing in this report depends on which path the district chooses.
What this is worth to the district
Housing changes two lines in the district's budget: what it spends replacing people who leave, and what it collects for students who enroll. Both calculators open on published figures and Hutto's own data. Change any input to test it.
Hutto's teacher turnover has run between 19.7 and 23.3 percent over the last three years. Every departure carries a replacement cost the district already pays.
Teachers
The Learning Policy Institute totals four categories of cost a district actually spends every time a teacher leaves. Most of it never appears as a line item, which is why the total surprises people.
LPI's 2024 figure for districts enrolling 10,000 to 50,000 students. Hutto enrolls 11,101. LPI does not publish a fixed split between the four categories. The figure counts district spending only, so it excludes the effect of turnover on student achievement, which LPI documents separately.
Auxiliary and paraprofessional
The Center for American Progress reviewed 30 studies of employee replacement cost and found a median of 16 percent of annual salary for positions paying under $30,000. Applied here to a $32,000 salary.
Hutto should replace both the salary and the percentage with its own figures. Auxiliary roles vary widely, and a bus driver and a campus aide do not cost the same to replace.
Turnover falls from 23.3% to 20.3%
Jefferson Union High School District in California went from 25 percent annual staff turnover to near zero after opening 122 staff homes in 2022. A 3% improvement is a deliberately conservative test.
Saved every year
$480,000
Recurring. Not a one time saving.
Equivalent to 8 beginning teacher salaries a year
181 teacher departures and 177 auxiliary departures a year
Texas funds districts on attendance. Staff commuting in from Taylor, Georgetown or Pflugerville bring their children when they move into the district, and those students are new revenue. Staff already living in Hutto are not, and the calculator counts only the first group.
The community
Assumptions
Why the share matters
If every child housed already attended Hutto ISD, the revenue effect is zero. The honest number is the students who transfer in, and it is the first thing a CFO will ask about.
Added state funding each year
$775,000
Recurring, for as long as the homes are occupied.
Equivalent to 13 beginning teacher salaries a year
125 in average daily attendance
Retention saving
Added state funding
Together, every year
Equivalent to 22 beginning teacher salaries every year, recurring for as long as the community stands, at no capital cost to the district.
What this is and is not
The district's own figures run through published replacement costs and the state funding formula. Not a guarantee. Upward does not control how many staff choose to move, and the retention effect should be tested against Hutto's exit data in the employee survey.
Turnover: Hutto ISD, 2023–24 through 2025–26. Teacher replacement cost: Learning Policy Institute, 2024, districts of 10,000 to 50,000 students. Auxiliary replacement cost: Center for American Progress, 16 percent of salary under $30,000. Basic allotment: Texas HB 2, 2025. Enrollment 11,101, 2026. Beginning teacher salary $57,500, Hutto ISD 2025–26.
Next steps
This study is the first step, not a proposal. It sizes the gap from public data; only the workforce can tell us how many people would actually move and what they would pay. Select any stage for detail.
The district decides whether it wants to see more. Nothing below this point begins without that decision. No cost, commitment, land, structure or term is fixed by it, and the district can stop here with a finished market study and nothing owed.
Anonymous all-staff housing survey, distributed by the district so response rates are real. Current housing cost and commute, household composition, rent or own, interest in the program, willingness to pay by unit type, roommate interest, and what would make them say no. Segmented by role and years of service so results map to the pay bands in Section 2. Then three to four workshops across campuses, mixed by role so bus drivers and aides are in the room with teachers.
District counsel and bond counsel review the structure. Third-party diligence runs alongside: title, the equitable title tax treatment confirmed with Williamson CAD, and the NNN lease form. This track is the district’s own advisors testing the transaction, not Upward presenting to them.
Upward presents the survey and workshop results to the board with the program they imply: unit mix, rent tiers, phase sizing, and a real demand figure rather than an estimate. This is an information item. The board is not asked to authorize anything at this meeting.
Counsel signs off on the structure and third-party diligence closes. Nothing below this point begins before it. The gate sits ahead of both the board’s authorization and the engineering spend, so that the district is never asked to authorize a structure its own advisors have not cleared.
Upward presents the final terms and asks the board for authority to enter into the lease and to delegate execution to the officer it designates. Full public airing of the terms before the vote. The authorization comes before the engineering work, so that neither party spends design money on a transaction the board has not approved.
Survey, topography, floodplain, utility capacity and access on the district’s chosen parcel. A real site plan, unit mix locked to the survey results, and a full pro forma and financing plan against the authorized structure.
With the plan complete and the exhibits final, the NNN lease is executed by whoever holds the authority the board delegated at presentation two. Everything the district signs at this point has already been reviewed by its counsel, authorized by its board in public, and engineered against the actual site.
Durations are working estimates and assume the district provides its data promptly. Tracks A and B run at the same time. The two board presentations follow Upward’s standard sequence with public partners: one to present findings, one to authorize.
What would change the conclusion
Three findings in Phase 2 would materially weaken the case, and they should be tested honestly rather than worked around. If the employee survey returns fewer than roughly 150 households with genuine interest, the program is too small to finance efficiently. If the district’s actual turnover rate is already low, the retention argument that carries this program elsewhere does not apply here. And if the property tax treatment resolves badly, the rent discount narrows enough to change the analysis. Each is answerable within the next four months.
Method and open items
Here is what we verified, what we modelled, and what we still have to confirm. Every item on the open list closes in the next few weeks.
Use of this document
Prepared for planning discussion between Hutto ISD and Upward Communities. Not an appraisal, not USPAP compliant, and not to be relied upon for financing, investment or valuation. Figures marked modeled or to confirm are working assumptions.