The Good Neighbor Next Door Program

The Good Neighbor Next Door Program is run by the U.S. Department of Housing and Urban Development, also known as HUD.  The basic idea is to make it easier for some civil servants to become homeowners by giving them financial incentives to purchase a home.  If you work in any of these jobs, you could be eligible:

  • Police officer
  • Teacher
  • Firefighter
  • Emergency medical technician

How the Program Works

The Good Neighbor Next Door Program is very simple.  HUD publishes a list of homes that are located in areas around the country that need to be revitalized.  The properties that are eligible for the program are listed on the site and can be purchased, but only for the five days they are on the list.

Every state has its own listings of properties that are available for the program.  Each state also publishes its own instructions for those who are interested in purchasing a home that is listed on the program.  If anyone other than you submits an application for a specific home, then the state runs a lottery to see who will get the chance to actually purchase the home.

When you are awarded the purchase of the home, you will have to sign a second mortgage and a note for the amount of the discount you are receiving off the home.  If you live in the home for at least three years, then you do not have to pay on that second mortgage.  Each year you will be required to certify that you are still living in the property.  Certification comes in the form of a letter that must be signed and returned to HUD.

In the event that you are called to active military duty during the three years you must live in the home, you do receive clemency as far as residency requirements for the length of time of your service.  You just have to make HUD aware of what is happening and follow specific instructions for those on the Good Neighbor Next Door Program who end up on military duty.

If for some reason you need to sell the home before the three years are up, then you will need to submit the payoff through C&L Service Corporation, the company that processes the payoffs for the Good Neighbor Next Door Program.  If this happens, you will be required to also pay the second mortgage.  However, if you do live in the home for the full three years, the second mortgage will be released as long as you returned your residency certifications every year.

Revitalization Areas

The homes on the HUD Good Neighbor Next Door Program are very specific and change every week.  To be qualified as a revitalization area for this program, the agency looks at household income of people living there, the rate of homeownership there, and also the rate of foreclosures involving FHA-insured mortgages.  The homes that are offered in the program are usually offered at 50 percent off the list price, so this does make it very attractive to those who want to own a home but think they can’t afford to.  As long as you fit the criteria for the program and follow the rules to the letter, you can definitely save a lot of money and also own your very own home!

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