The Good Neighbor Next Door Program – How to Get a 50% Discount When Buying a Qualified Home
If you are a police officer, firefighter, emergency medical technician, or a pre-Kindergarten through 12th grade teacher, please do not purchase a home until you have read this article. The United States Department of Housing and Urban Development (HUD) has developed a new program with the sole purpose of filling designated “revitalization areas” with employed professionals in an attempt to strengthen certain communities throughout the country. This program is rightfully named the Good Neighbor Next Door Program (GNND), and is available in numerous communities, in each state, nationwide. And why would these employed professionals choose to participate in this program? The main incentive for buying a home in one of the designated revitalization areas is the 50% discount associated with purchasing one of these HUD homes. Yes, I said 50% discount. Qualified buyers can purchase a $200,000 home and only pay a $100,000 mortgage. The other half of the mortgage is considered a “silent second” mortgage, which the buyer must sign at time of closing. This program is truly a great deal, especially since homeowners have the option to sell the HUD home after the 36 month occupancy period is over, leaving them free to collect the full profit from the sale.
So, what’s the catch? In an attempt to strengthen the designated communities, participants of the Good Neighbor Next Door Program must live in the home for the first 36 months after purchasing the home. This is the part of the deal that HUD is very strict about. They mail out annual forms that must be completed and signed stating that the buyer still lives in the home as their primary residence. Failure to live in the home for the designated 36 month period can result in the homeowner having to pay back a pro-rated portion of the “silent second” mortgage, the amount to repay being dependent upon the length of time the homeowner lived in the home.
In addition to being able to qualify for the loan, participants of the Good Neighbor Next Door Program must not have owned a property within the past year. Also, the homes are sold “as is” with no home warranty, since many of the homes in this program are foreclosures. The good news is that there are multiple loan options, some of which include additional monies that can be borrowed to make needed repairs to the HUD homes in this program. The buyer also has to be prepared to pay earnest money equaling approximately 1% of the list price, and the prices of these homes are not negotiable. Interested buyers also must use a Realtor when purchasing one of these HUD homes, which can be beneficial, since the Realtor will be able to guide buyers through the home buying process and offer valuable advice.
To find a list of qualified homes in your state, you can search by state, and then by county or city at the HUD homes website. Make sure you check the website regularly, as the homes listed in the program are only available for 5 days at a time, and then replaced by new properties. A program this great will probably not last, so you may want to take advantage of this program now.