HUD’s Good Neighbor Next Door program serves two purposes: providing housing for frontline workers at a 50% discount and helping revitalize communities across the country.
Who is Eligible?
The Good Neighbor Next Door program is available to law enforcement officers, firefighters, paramedics, and teachers.
How much is the discount?
Eligible participants can purchase a house at 50% of the current price Estimate. For example, if a home estimates $ 300,000, the buyer pays $ 150,000. The other $ 150,000 goes “silent” second mortgage that is taken after 36 months of residence.
Not every police officer, firefighter, paramedic, or teacher qualifies for the Good Neighbor Next Door program. Here are the specifics.
Officials must be employed full-time by a federal government, state, municipality, local government, or Indian tribal government. As part of your professional duties, you must be obliged to make arrests. Law enforcement officers from private companies are not allowed.
Firefighters and rescue workers
Like law enforcement officers, you must serve full-time with a federal, state, parish, local, or Native American tribal government. First aiders working for privately owned companies are not eligible.
You must be a class teacher for preschool age through 12th grade and be employed full-time in a state-approved public or private school. Members of the support staff are not eligible.
What’s the catch?
Eligible applicants must buy a home in the community where they work and the home must be used as their primary residence. There is an annual certification process to ensure that participants live on the property for three years. After three years, the “silent” second mortgage is granted and the homeowner is free Sell the property. If the home is sold, the homeowner keeps all of the proceeds.
How to buy
When a HUD home hits the market, it’s only available to Good Neighbor Next Door participants for seven days, so act quickly. Check the Listings for HUD homes in your state.
Once HUD knows you are interested, you will be assigned a real estate agent to assist you with the process. The agent will provide you with the information you need to pre-qualify with one Mortgage lender and places your name in a lottery draw. The name that HUD pulls from this drawing is the “Winner”. While this may sound like a frustrating process, HUD insists that the chances of winning a house are high and that many houses are unclaimed within seven days. Since you compete against a select group of buyers, the drawing rarely contains many names at the same time.
The amount of money you need for a deposit depends on the type of loan you choose.
The minimum Credit score required also depends on the type of mortgage you are getting.
What if a house is a mess?
All properties for sale are owned by HUD and are often located in areas in need of revitalization. Although HUD homes are sold “as is,” buyers can use any type of loan to purchase the property including:
Buyers often use a program like this FHA 203 (k) Renovation loans to buy and refurbish your property. In other words, the cost of upgrading the home is added to the mortgage.
By providing the Good Neighbor Next Door program, the federal government is making housing affordable for hardworking frontline workers so they can keep more money in their home Bank accounts.