Won’t You Be My Neighbor? HUD Offers Half-off Homes through the Good Neighbor Next Door Program

On Tuesday, we gave you a little background on the Housing and Urban Development agency – or HUD. You’re probably are familiar with FHA loans and Section 8 housing, but today we’re going to take a look at one of HUD’s lesser known and really amazing programs: Good Neighbor Next Door.


So what is it?

The Good Neighbor Next Door program – or GNND – allows law enforcement officers, pre-K through highschool teachers, and firefighters/EMTs to purchase single-family homes for half off the list price. Sound too incredible to be true? Well, it is true, but there are some other details to be aware of:

·         the homes in the GNND program are offered for sale only through the program for five days

·         the homes are located in areas that HUD has designated as a “revitalization zone”

·         if more than one person is interested in a GNND home, the winner is chosen by random lottery

·         you must commit to live in the home for 3 years after purchasing


And what’s it for?

The idea is that these “good neighbor” citizens can contribute to community revitalization by putting down roots in a community that struggle with low income or dense concentrations of foreclosed homes. As these civic servants commit to living in these areas for a few years, not only will homeownership and property values go up just by their purchase of a home, but they’ll also bring non-monetary value to the community by virtue of their honorable occupations.

Plus, the people who qualify for the GNND get an incredible deal on a home of 50% off the “as-is” appraised list price.


A few more details about the program…

If you win the lottery, HUD requires that you sign a “silent second” mortgage and note for the discounted amount – as long as you fulfill the 3-year occupancy requirement, you won’t pay anything on this mortgage.

Another thing to note is that while you don’t have to be a first-time homebuyer, HUD does require that you do not currently own a home at the time you submit an offer to purchase, and that you have not owned a home in the last year.

The lottery only applies if more than one person submit interest on a home. If you’re the only applicant, you win! Since there is a limited inventory of homes in limited areas, the chances are actually pretty good.

GNND homes are homes that were insured by the FHA, but the homeowner defaulted and the home was re-conveyed to HUD AND the home is located in a designated “revitalization area”. If a GNND home is not purchased during the lottery period, it is then marketed to the general public at full price.


If you are interested in the GNND program, read more details regarding financing and making your offer on the HUD site.

Sarah Louise Green lives in the San Francisco Bay Area and writes about national and local real estate trends, home financing, advice for buyers, and DIY projects for the home and garden. Follow Sarah on Twitter:@slouisegreen

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