What Is The Good Neighbor Next Door Program?

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 grants and programs, which any buyer can use, the Good Neighbor Next Door housing program focuses on community contributors such as teachers, firefighters, and law enforcement personnel who work where they live. The program offers a substantial discount compared to other HUD home buying programs.

The Good Neighbor Next Door is not a mortgage program — it’s a discount program. Qualified professionals can purchase homes at a significant discount, making homeownership more affordable in HUD revitalization areas.

This article discusses the Good Neighbor Next Door sales program, which home buyers can use it, and which mortgage loans the program can work with.

How Does The Good Neighbor Next Door Program Work?

The Good Neighbor Next Door housing program is a government-supported affordable housing initiative. It sells homes on the Multiple Listing Service (MLS) at a 50% discount to law enforcement officers, teachers, firefighters, and emergency medical technicians (EMTs). In exchange for the discounted price, buyers commit to living in the home as their primary residence for at least thirty-six months.

To qualify for the Good Neighbor Next Door program, home buyers must meet six eligibility standards.

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 also attest their intention to remain in their profession for at least 12 months after the home purchase.

Part-time employees, such as substitute teachers and volunteer firefighters, do not qualify for the teacher housing programs or similar GNND benefits.

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 program. Eligible properties are limited to single-family, repossessed homes in HUD-designated revitalization areas 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 registered HUD buyer’s agent. All offers must be made via the HUD Homestore website, and a modest earnest money deposit is required.

You must buy the home as your main residence

The Good Neighbor Next Door program is designed to revitalize communities, so buyers must use the home as their primary residence. This program cannot be used for second homes or investment properties.

You must not have owned a home within 12 months of making an offer

To be eligible for the Good Neighbor Next Door housing program, you must not have owned a home within the last 12 months. Buyers must also not have used the program previously.

You must certify your residence for the next 3 years

Home buyers must certify that they will occupy the home for at least three years. Those who move out early must repay the unused portion of the 50% discount. Active duty military personnel are exempt from this rule.

What Professions Qualify for the Good Neighbor Next Door Program?

The U.S. Department of Housing and Urban Development makes the Good Neighbor Next Door program available to professionals in four fields: law enforcement, education, firefighting, and emergency medical services.

Police and Law Enforcement

A home buyer qualifies for the Good Neighbor Next Door program 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. This includes agencies in the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, and other U.S. territories. 

Firefighters

The Good Neighbor Next Door housing program is available to firefighters who meet the following criteria:

• Are employed full-time by a government-backed fire department
• Work at least 40 hours per week for the department
• Serve the local area in which the home is located

Part-time employees do not qualify for the Good Neighbor Next Door firefighter housing programs.

Emergency Medical Technicians (EMTs)

Emergency Medical Technicians (EMTs) can qualify for the Good Neighbor Next Door program if they:

• Work for an Emergency Medical Services (EMS) responder unit
• Are employed full-time (at least 40 hours per week)
• Serve the local area in which the home is located

EMTs may work for federal, state, local, or tribal governments in any EMT-related role, such as a paramedic, first responder, or ambulance driver.

School Teachers

To qualify for the Good Neighbor Next Door program as a school teacher, applicants must:

• Be employed full-time by a state-accredited school
• Teach grades Pre-K through 12
• Serve students in the local area where the home is located

Teachers in both public and private schools are eligible. However, administrators, coaches, and other school employees are not eligible for this program.

Mortgages Available With Good Neighbor Next Door

Home buyers can finance their Good Neighbor Next Door home with any mortgage for first-time home buyers, including low-down-payment mortgages. The program may also be combined with down payment assistance programs and home buyer tax credits. 

FHA Mortgage

FHA mortgages are the default low-down-payment option for the Good Neighbor Next Door program. Qualified buyers can make a $100 down payment, instead of the standard FHA requirement of 3.5% of the purchase price. The minimum required credit score for an FHA mortgage is 500.

FHA 203k Construction Loan Mortgage

Buyers using the Good Neighbor Next Door program can also finance repairs through the FHA 203k loan. This allows for up to $35,000 in repairs, including new roofing, HVAC systems, and curb appeal improvements.

HomeReady Mortgage

HomeReady is a 3% down payment mortgage for buyers in low-to-moderate income areas. It offers reduced mortgage rates and simpler qualifications. HomeReady requires a minimum credit score of 620.

Home Possible Mortgage

Home Possible is a similar 3% down payment option for buyers in low-to-moderate income neighborhoods. Like HomeReady, it features lower mortgage rates and relaxed qualification criteria. Home Possible requires a minimum credit score of 660.

USDA Mortgage

USDA loans are no-down-payment mortgages for homes in rural and less densely populated suburban areas. They offer competitive rates and affordable mortgage insurance. USDA loans require a minimum credit score of 620.

VA Mortgage

VA loans are zero-down mortgages for military veterans, active duty members, and their families. These loans offer 100% financing, no mortgage insurance, and require a minimum credit score of 580.

Common Questions About the Good Neighbor Next Door Program

Do all HUD homes qualify for Good Neighbor Next Door?

No, only certain HUD homes qualify for the Good Neighbor Next Door housing program. These homes must also be located in a designated HUD Revitalization Area.

What is a HUD Revitalization Area?

HUD Revitalization Areas are neighborhoods where homeownership rates and income levels are lower than the regional average. These areas are identified periodically by HUD as part of its effort to increase homeownership in underserved communities.

How do I make a Good Neighbor Next Door offer?

To make an offer on a Good Neighbor Next Door home, buyers should first get pre-approved for a mortgage. After that, a real estate agent registered with HUD can submit a bid on your behalf through the HUD Homestore website.

Can I purchase a Good Neighbor Next Door house without a real estate agent?

No, the U.S. Department of Housing & Urban Development requires that buyers work with a registered real estate agent to purchase a HUD home.

Can I buy a home through the Good Neighbor Next Door program if I’m not a first-time home buyer?

The Good Neighbor Next Door program is available to both first-time and repeat home buyers, as long as they have not owned a home in the past 12 months.

Can I use Good Neighbor Next Door more than once?

Buyers can only use the Good Neighbor Next Door program once.

Can home buyers combine down payment assistance programs with the Good Neighbor Next Door sales program?

Yes, home buyers can combine the Good Neighbor Next Door program with other down payment assistance programs and grants.

Am I required to take a homeownership education class to buy a Good Neighbor Next Door home?

There is no mandatory homeownership education requirement for the Good Neighbor Next Door housing program, but taking such a class is beneficial. First-time homeowners who complete education courses are less likely to default on their mortgage.