Good Neighbor Next Door Sales Program
In an effort to improve communities across the country, HUD has designed the Good Neighbor Next Door Program to make housing more affordable to those who work in law enforcement, primary and secondary education and other municipal services such as firefighting and emergency medical services. Those who qualify for the Good Neighbor Next Door Program receive the benefit of a 50% discount on a home, making homeownership happen faster than if you saved for a downpayment and more affordable than choosing a conventional mortgage loan.
Am I eligible?
Qualifying for the Good Neighbor Next Door Program relies in on certain requirements. In order to qualify, you must:
- Be a full-time law enforcement official employed by a law enforcement agency of the federal government, a state, a unit of general local government or an Indian tribal government, or
- Be a full-time teacher employed by a state-accredited public or private school that provides direct service to students in grades pre-kindergarten through 12 and the school you are employed by must serve students from the area where the home you are purchasing is located, or
- Be a full-time firefighter or emergency medical technician employed by a fire department or emergency medical services responder unit of the federal government, a state, unit of general local government or an Indian tribal government serving the area where the home is located
How does it work?
HUD approved homes in revitalization areas are exclusively listed for sale through the GNND program for 5 days. You can check the listings for your state and submit your bid on a home. If more than one bid appears for a home, the homeowner is chosen randomly. You are required to sign a "silent second" mortgage and a note for the discount amount. However, no interest or payments on this second mortgage are required, unless you vacate the home before the minimum 3 year occupancy is complete.
What are the alternatives?
You may opt for other FHA loans, such as a the American Dream Downpayment Initiative, if the GNND program does not suit and your needs. You may also qualify for additional assistance through state or local government sources, as these branches hope to encourage families to move into revitalization areas.
Do I really need this type of loan?
If you qualify according to the above requirements and need assistance in buying a home, the GNND program may be your best option. If, however, you are able to afford a home at the asking price and do not need more than a conventional home loan, you may choose to go that route, or look into other FHA home loans.
