The US. Dept. of Housing and Urban Development (HUD) offers a home buying and mortgage program for Teachers (Pre-K-12), Police and Law Enforcement, Firefighters, and EMT/Emergency Responders, called the Good Neighbor Next Door Program (GNND).
The Good Neighbor Next Door program gives a huge incentive by discounting the sales price of a eligible HUD homes by 50%!!
Purpose of Good Neighbor Next Door Program
HUD’s goal of GNND is to promote home ownership, strengthen communities, and revitalize neighborhoods in HUD targeted areas. HUD believes if they financially reward and encourage teachers, police, firefighters, and EMT’s to buy and live in a HUD owned home , that it will bring stability to the community.
Conditions of Buying
- Eligible buyers can purchase homes for 50% off the list price.
- Buyers accept a ‘silent second’ mortgage equal to 50% of the sales price.
- Must agree to live in the home for a minimum 3 years as their primary residence.
- Buyers must go through an annual certification process to ensure primary occupancy.
- Do NOT have to be a first time home buyer
- Cannot own any other properties at the time of buying.
- Single family residence only
Good Neighbor Next Door Eligibility
- Police/Law Enforcement/Teachers must be employed full time by the federal, state, county, municipal, Indian tribal government, pre-k-12 public or private school.
- Firefighters and EMT’s must be be employed by a fire department or emergency medical responder unit by federal, state, county, municipal, or Indian tribal govt.
- Buying the home must be with-in a reasonable commute of where you work.
You can read more details on eligibility here.
==> Teachers Only: Home Buyer Assistance program for Teachers!
Good Neighbor Next Door Mortgage
The GNND program is not an actual loan program. It’s more of an incentive to help HUD sell homes that may not be the most desirable, but the 50% of the home is technically a mortgage even though the buyer is not repaying it. This is the ‘silent second’ mortgage.
Buyers can use any type of loan like FHA, VA, USDA, Conventional financing, or cash to purchase a Good Neighbor Next Door home. Since HUD homes are sold ‘as is’, and in need of repair, buyers often use the FHA 203(K) Streamline renovation/rehab loan to purchase.
FHA does have a special financing $100 Down Payment payment program when buying a HUD home but currently is not available in California. You can see HUD sales incentives here here.
Consider All Your Options
If you are a teacher, police officer, in law enforcement, are a firefighter, or emergency medical technician/EMT and want to explore all of your home loan options with a mortgage lender who specializes in affordable home financing programs, contact me or call 951-215-6119.