What do homebuyers need to know about HUD’s Good Neighbor Next Door Program?

Image by Steve Riot from Pixabay

The U.S. Department of Housing and Urban Development (HUD) has a unique housing program for homebuyers engaged in certain jobs that can contribute to strengthening communities in the country. The HUD’s Good Neighbor Next Door or GNND is a sales program of the HUD that offers a 50% discount to eligible homebuyers planning to buy a HUD-owned single-family home.

Homebuyers who are eligible for the GNND program

Homebuyers who the HUD considers as “good neighbors” are those who can make contributions to community revitalization areas defined by the Department. As a homebuyer, you may be eligible to participate in the GNND program if you work full-time in any of these occupations:

  • Law enforcers – Any members of the federal, state, general local government unit, and Indian tribal government law enforcement agencies who have sworn to uphold the law which includes making arrests for violations.
  • Teachers – State-accredited public or private school teachers directly serving pre-kindergarten through grade 12 students. The teachers must be working in schools near the home they are planning to buy.
  • Firefighters/Emergency Medical Technicians (EMT) – Any members of the state, general local government unit, and Indian tribal government Fire Department agency or Emergency Medical Services. The homes that participants will buy should be within their service areas.

Eligible GNND homebuyers must ensure the HUD that they will remain in their respective jobs for a minimum of one year upon home purchase. Homebuyers who expect to terminate their employment within the required period are discouraged to participate in the program.

Homebuyers may avail of the GNND homes by taking advantage of the government-backed loans like VA, FHA, or conventional mortgages, or cash. While non-first-time homebuyers are also allowed to participate in the GNND program, they should not have another property under their name when making a purchase.

The perks of being a “good neighbor”

The HUD offers very affordable housing to individuals who can help strengthen the communities. Eligible GNND homebuyers will only pay half of the HUD appraised single-family home. For example, if the HUD-listed home you plan to buy is valued at $100,000, it can be yours by just paying $50,000. Down payment for a GNND home can be as low as $100 if you qualify for an FHA mortgage. You will be required to settle a minimal amount of earnest money that usually ranges between $500 to $2,000. The earnest money you will deposit will be credited to you at closing once your offer has been accepted; if not, you can get your money back.

After closing a GNND home, you will be given 30 – 180 days to occupy the property and you need to live there for a full 36 months.

Upon completion of the required occupancy period, GNND homeowners are released from all their community obligations. They may even decide to sell the property and keep its equity.

Homebuyers should note that the HUD is very strict in implementing the GNND program to prevent it from being abused. GNND homeowners may face hefty fines and imprisonment, or both if they try to defraud the program.

Get in touch with an RPM loan advisor to learn more about the GNND program

If you’re a teacher, a police officer, a fireman, or an EMT responder, the GNND program could make your homeownership dream come true. However, if you have other questions about the GNND or you’re interested to apply for a mortgage, an RPM loan advisor can help you.