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Good Neighbor Next Door Program: Get a Home for 50% Off
The Good Neighbor Next Door (GNND) sales program is part of the government’s affordable homeownership directive for revitalizing U.S. neighborhoods and communities.
Unlike other first-time home buyer programs and grants, which any buyer can use, Good Neighbor Next Door focuses on community contributors such as teachers, firefighters, and law enforcement personnel who work where they live.
This article discusses the Good Neighbor Next Door sales program, which home buyers are eligible to use it, and how a Good Neighbor Next Door mortgage works.
What Is The Good Neighbor Next Door (GNND) Program?
Good Neighbor Next Door is a government-supported housing program. It sells homes at half-price to teachers, firefighters, law enforcement officials, and emergency medical technicians (EMTs) and allows for $100 down payments.
Created by the U.S. Department of Housing and Urban Development (HUD), the GNND Program revitalizes communities.
How Does The Good Neighbor Next Door Program Work?
HUD’s Good Neighbor Next Door program makes homes available at a 50% discount off the listing price to law enforcement officers, teachers, firefighters, and emergency medical technicians. In exchange for the price reduction, home buyers commit to living in their home as a principal residence for at least thirty-six months.
First-time home buyers can use Good Neighbor Next Door to buy their first home, and the program is also available to renters who haven’t owned a home within the last 12 months.
Home buyers must meet six eligibility standards to qualify for the Good Neighbor Next Door sales program.
You must have a full-time, qualified job
Eligible home buyers must work full-time as a classroom teacher, law enforcement official, firefighter, or emergency medical technician. They must attest their intention to remain in their line of work for at least 12 months after purchase.
Part-time employees such as substitute teachers and volunteer firefighters are not eligible.
You must purchase a single-family home within a HUD revitalization area
Not all homes for sale are eligible for the Good Neighbor Next Door sales program. Eligible properties are limited to single-family, repossessed homes in neighborhoods where income levels and homeownership rates are below area averages.
HUD maintains a list of available GNND homes on its website. Homes are sold as-is. Repairs are the responsibility of the home buyer.
You must follow the program rules for bidding on a Good Neighbor Next Door home
The Good Neighbor Next Door sales program requires buyers to submit offers via a real estate agent. Real estate agents must be registered on the U.S. Housing & Urban Development website, and offers must be made via the HUD Homestore website. All offers are subject to a 30-day waiting period, and a modest earnest money deposit should accompany all offers.
You must buy the home as your main residence
Good Neighbor Next Door is a community revitalization program, so the government requires that buyers use their new home as a primary residence. Home buyers cannot use Good Neighbor Next Door to purchase a second home or rental property.
You must not have owned a home within 12 months of making an offer
The Good Neighbor Next Door sales program is available to home buyers who haven’t owned a home within the last year and haven’t used the Good Neighbor Next Door program previously. Co-purchasers must satisfy the same criteria.
You must certify your residence for the next 3 years
Home buyers must agree to make their Good Neighbor Next Door home their sole residence for three years from the purchase date. Buyers must certify their occupancy annually.
Home buyers who move out early must repay the unused portion of their 50% discount. Military members called to active duty are exempted.
To pre-qualify for a mortgage, see today’s rates.
Who Qualifies For The Good Neighbor Next Door Program
The U.S. Department of Housing and Urban Development makes its Good Neighbor Next Door sales program available to home buyers in four professions: law enforcement, education, firefighting, and emergency medical services.
Police and Law Enforcement
A home buyer qualifies for Good Neighbor Next Door as a law enforcement officer when meeting three conditions:
- The home buyer is a full-time employee of a law enforcement agency
- The home buyer is sworn to uphold and make arrests for violations of the law
- The home buyer serves the area in which the home is located
Law enforcement agencies may be federal, state, local, or tribal, including the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, and other U.S. territories.
Law enforcement officers of a county, parish or political subdivision are also eligible for Good Neighbor Next Door.
The Good Neighbor Next Door sales program is available to home-buying firefighters who:
- Are firefighters for a government-backed fire department
- Work at least 40 hours per week for the fire department
- Serve the local area in which the home is located
Firefighters may work for federal, state, local, or tribal governments and serve in any firefighting role, including as a technician, engineer, inspector, and ranger.
Part-time employees are ineligible for the Good Neighbor Next Door sales program.
Emergency Medical Technician (EMT)
Emergency Medical Technicians who work with fire departments, hospitals, and ambulatory services can buy HUD homes via Good Neighbor Next Door. EMTs must meet the following criteria to qualify:
- Must work for an Emergency Medical Services responder unit
- Must work at least 40 hours per week as an EMT
- Must serve the local area in which the home is located
EMTs may work for federal, state, local, or tribal governments and serve in any EMT-related role, including as a paramedic, an ambulance driver, and a first responder.
School teachers qualify for the Good Neighbor Next Door sales program when meeting the following conditions:
- The teacher is a full-time employee of a school
- The teacher teaches pre-kindergarten through 12th grade
- The teacher serves students in the area in which the home is located
Teachers in any state-accredited public or private school are eligible for Good Neighbor Next Door. Administrators, coaches, and other school employees are not program-eligible.
Mortgages For Good Neighbor Next Door Purchases
Home buyers can finance their Good Neighbor Next Door home with any government- or private-backed home loan, including a low- and no-down payment mortgage.
First-time home buyers may qualify for home buyer tax credits and local down payment assistance.
FHA mortgages are the default low-down payment mortgage for Good Neighbor Next Door home sales. Home buyers who use FHA financing with Good Neighbor Next Door can make a $100 down payment instead of the FHA’s standard 3.5 percent down payment. The minimum required credit score is 500.
FHA 203k Construction Loan Mortgage
Home buyers can use the FHA 203k construction loan to buy a HUD home and finance its repairs. Up to $35,000 is available for major and minor repairs, including new roofing, new HVAC, and yard repair.
FHA 203k-backed purchases are eligible for a $100 down payment with a credit score of 580 or higher.
HomeReady is a 3% down conforming mortgage loan for home buyers in low-to-moderate income neighborhoods. HomeReady offers reduced mortgage rates and more straightforward qualifications than standard conforming mortgage loans.
HomeReady enforces a minimum credit score of 620. Buyers with credit scores of at least 680 get interest rate and mortgage insurance rate discounts.
Home Possible Mortgage
Home Possible is a 3% down, conforming mortgage loan for home buyers in low-to-moderate income neighborhoods. Like HomeReady, Home Possible provides lower mortgage rates and reduced qualifications than other conforming mortgage loans. Home Possible requires a minimum credit score of 660.
USDA mortgages are no-down payment mortgages backed by the U.S. Department of Agriculture for homes in rural and less-dense suburbs. USDA loans offer low mortgage rates and inexpensive mortgage insurance. USDA loans require a minimum 580 credit score.
VA mortgages are 100% mortgages for military veterans, active duty members, and surviving spouses. The Department of Veterans Affairs backs VA loans. VA loans never require mortgage insurance and require a 620 credit score for Good Neighbor Next Door home buyers.
Frequently Asked Questions About the Good Neighbor Next Door Program
Do all HUD homes qualify for Good Neighbor Next Door?
No, only some HUD homes qualify for Good Neighbor Next Door. HUD homes must also be located in a HUD Revitalization Area to qualify.
What is a HUD Revitalization Area?
Revitalization Areas are neighborhoods with lower homeownership rates and income than area averages. Revitalization Areas are defined in the National Housing Act and identified periodically by HUD.
How do I make a Good Neighbor Next Door offer?
Home buyers should get pre-approved for a mortgage first, then look for Good Neighbor Next Door homes for sale on the government’s official website. Once a buyer identifies a home for sale, a real estate agent can submit a bid on their behalf.
Can I purchase Good Neighbor Next Door house without a real estate agent?
No, the U.S. Department of Housing & Urban Development requires home buyers to work with HUD-registered real estate agents when buying a HUD home for sale.
Can I buy a home through the Good Neighbor Next Door program if I’m not a first-time home buyer?
Good Neighbor Next Door is available to all home buyers who have not owned a home in the last twelve months. First-time home buyers and repeat home buyers are eligible.
Can I use Good Neighbor Next Door more than once?
Home buyers can use the Good Neighbor Next Door program only once.
Can home buyers combine down payment assistance programs with the Good Neighbor Next Door sales program?
Yes, first-time home buyers can use down payment assistance and cash grant programs as part of their Good Neighbor Next Door home purchase.
Am I required to take a homeownership education class to buy a Good Neighbor Next Door home?
There is no homeownership education requirement for Good Neighbor Next Door. However, education is beneficial. First-time homeowners who complete a homeownership education class are less likely to default.