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Chapter 8: Good Neighbor Next Door Program

8. The Good Neighbor Next Door program
FAQ #1 – What is the Good Neighbor Next Door Program?
FAQ #2 – Who is Eligible for the Good Neighbor Next Door Program?
FAQ #3 – What is the Occupancy Period Required?
FAQ #4 – What Mortgage Financing is Available for this Program?
FAQ #5 – Can the Home Be Sold at a Profit After Three Years?
FAQ #6 – Where are Homes in the Good Neighbor Next Door Program Located?
FAQ #7 – Is This Program Only Available to First-Time Home Buyers?
FAQ #8 – Can Buyers Try to Bargain with HUD on the Home Price?

Available to teachers and first responders, the Good Neighbor Next Door Program offers some excellent benefits to qualifying people who want to purchase HUD homes. This special program allows qualifying individuals to enjoy a 50% discount from the HUD home’s listing price. To offer information for those interested in this program, the following is a look at important Frequently Asked Questions regarding the Good Neighbor Next Door Program.

The Good Neighbor Next Door Program was developed by HUD to help strengthen the communities in America.

FAQ #1 – What is the Good Neighbor Next Door Program?

The Good Neighbor Next Door Program was developed by HUD to help strengthen the communities in America. In specific Revitalization Areas, this program offers HUD owned single family homes at a 50% discount to participants eligible for the program. This 50% discount is 50% off the HUD appraised value, which is the value at which the home is listed by HUD. For instance, a home that HUD lists at $150,000 would be available to eligible participants for only $75,000. However, it is required that the buyer occupies the home as their only personal residence during the required occupancy period.

FAQ #2 – Who is Eligible for the Good Neighbor Next Door Program?

Working to make American communities stronger, the U.S. Department of Housing and Urban Development established the Good Neighbor Next Door Program to make it possible for teachers, firefighters, law enforcement officers and emergency medical technicians to become owners of homes in revitalization areas.
Law enforcement members are eligible for this program if an Indian tribal government, a state, a unit of local government or the federal government employs them full time.

Teachers are eligible for the program if they are teaching full time at a private school or state accredited public school that offers services to students in pre-K-12th grade.

Firefighters and Emergency Medical Technicians are eligible for the program if a state, local government, Indian tribal government or federal government EMS responder unit or fire department employs them.

Law enforcement members, teachers, emergency medical technicians and firefighters must be serving the area where the HUD home is located and must be in good standing with their employer.

FAQ #3 – What is the Occupancy Period Required?

To qualify for the Good Neighbor Next Door Program, an occupancy period must be fulfilled. The home purchased must be the only residence of the participant for a minimum of 36 months. This requirement is designed to strengthen communities by encouraging these professionals to live within the community. After the home is purchased and based upon the determination of the home’s condition and repairs needed, HUD will give participants 30, 90 or 180 days to move into the purchased home. After the 36th month of occupancy, participants are released from all the program obligations.

FAQ #4 – What Mortgage Financing is Available for this Program?

When purchasing HUD homes with the aid of the Good Neighbor Next Door Program, buyers are permitted to use conventional mortgages, VA financing, FHA financing or cash to finance the home. However, a Second Mortgage and Note must be signed according to HUD, which is for the discounted amount on the home. The “silent second mortgage” requires no payments or interest as long as participants fulfill the 36-month occupancy period. Failing to meet the full requirement for occupancy could result in participants being required to pay a pro-rata portion of the original discount.

FAQ #5 – Can the Home Be Sold at a Profit After Three Years?

After fulfilling the three-year occupancy period, homeowners are permitted to sell the home. If there is any appreciation or equity in the home when sold, homeowners are permitted to keep it as a profit.

FAQ #6 – Where are Homes in the Good Neighbor Next Door Program Located?

Participating HUD homes are specifically located in special Revitalization Areas. The United States contains many Revitalization Areas, making it easy for many qualified participants to find a home in their area.

FAQ #7 – Is This Program Only Available to First-Time Home Buyers?

No, buyers do not have to be first-time homebuyers to take advantage of the Good Neighbor Next Door Program. However, buyers may not own other residential real estate when they submit an offer on the HUD home. Any residential real estate has to be sold at least a year before the offer to purchase is made. For instance, if buyers plan to make an offer to purchase government foreclosures on August 1, 2012, they may not have been the owner of any residential real estate during the period of July 31, 2011 on.

FAQ #8 – Can Buyers Try to Bargain with HUD on the Home Price?

Buyers involved in the Good Neighbor Next Door Program are not permitted to bargain with HUD on the home price. When bidding on a home involved in this program, buyers must offer the HUD list price on the bid. After submitting the bid, participants receive a 50% discount from the list price. Since the program already offers the 50% discount on the original listing price, no bargaining is permitted

The Good Neighbor Next Door Program definitely offers exciting benefits to those who qualify for the program. Those qualified to participate in the program should find out to be eligible for this loan more about HUD homes in their area that are a part of this program. Buyers can find out more information about this exciting program by visiting this link.

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