Good Neighbor Next Door Program Requirements



good neighbor next door program

There are many programs and grants available for people who want to become homeowners.

But the Good Neighbor Next Door Program (GNND) may have the best deal available to teachers, law enforcement, firefighters, and EMT’s.

If eligible, you may be able to purchase a home at half price with just a $100 down payment.

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Who is Eligible?

Good Neighbor Next Door Eligibility Requirements

  • Full-time teacher, law enforcement officer, or EMT who works for an agency, school or department in the same area the home is located.

  • Must not have previously purchased a Good Neighbor Next Door home  

  • Certify your intention to continue working as a law enforcement officer, teacher, firefighter or EMT for a year after the home purchase.

  • Owned any home in the 12 months prior to bidding on an eligible property

  • Certify your intention to continue working as a law enforcement officer, teacher, firefighter or EMT for a year after the home purchase.

How Does the Good Neighbor Next Door Program Work?

The U.S. Department of Housing and Urban Development (HUD) created the Good Neighbor Program (GNND) to help strengthen communities by giving Law enforcement officers, teachers, and firefighters/emergency medical technicians the ability to purchase homes in communities at a reduced rate.

When borrowers get an FHA mortgage on a home, the Federal Housing Administration insures the loan if the borrower defaults on the loan. If this happens, the FHA pays the mortgage lender the remaining balance on the loan and takes possession of the home. It is then classified as a HUD home and listed for sale on the hudhomestore website.

Eligible buyers will get 50% off the list price on a home. If a home is listed at $150,000, then you can buy it for $75,000. You must purchase the property as your primary residence and live in the home for at least 36 months.

The program is open to all buyers and is not limited to first-time home buyers. However, you cannot own another property at the time of purchase or within one year before closing. It is only available in certain revitalization areas. Your realtor will be able to assist you in finding qualifying communities.

Good Neighbor Next Door Program Benefits

  • Purchase HUD homes for 50% off the list price
  • Low $100 down payment
  • Can use any mortgage loan for the purchase
  • VA loan can be used to purchase for 100% financing

Down Payment Requirements

If using an FHA loan to purchase a home as part of the Good Neighbor Next Door Program, the down payment will be $100.

If using a conventional home loan or another type of loan, standard mortgage down payment requirements stay the same.

Veterans are allowed to use a VA loan to purchase a house through the program and receive 100% financing.

Closing costs are required for all types of mortgage loans used as part of the GNND program.

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GNND Requirements and Guidelines

  • Available for owner-occupied borrowers only
  • Must use a Real Estate Agent to purchase a HUD home
  • Cannot negotiate price, 50% off the listed price
  • Earnest money deposit required of 1% of the purchase price ($500 minimum and $2,000 maximum)
  • $100 down payment with FHA loan
  • Must reside in the property for three years
  • Must use a real estate agent
  • Can only purchase single-family homes
  • Silent second mortgage required at signing

Using an FHA Loan

FHA loans are very popular for their low down payment and credit score requirements. But in the case of the Good Neighbor Next Door Program, the down payment will be an unbelievably low $100.

The minimum credit score needed for FHA loans is 580; the minimum credit requirement will vary from lender to lender.

FHA Loan Benefits

The Occupancy Period

The Good Neighbor Next Door Program is available to borrowers who will live in the home as their primary residence. Buyers must reside in the property for a period of no less than 36 months.

When you purchase a HUD home as part of the GNND program, you will get a home loan. The program will also make you sign a silent second mortgage with no payments or interest.

If you leave the home before three years are up, you will pay a pro-rata amount for the full 36-month term.

If you leave your job, retire, or are fired, you will not face any penalties as long as you fulfill the 36 month occupancy period requirement.