Are you a teacher, firefighter, EMT, or police officer? Great news: the US Department of Housing and Urban Development has developed a program specifically with you in mind. The goal of this program is to provide affordable housing to our valuable community helpers. Think of it as a thank you for your service in whatever role you serve in your community.
What is the Good Neighbor Next Door program?
The purpose of this program is two-fold: it aims to revitalize neighborhoods through affordable homes while also helping those who fill some of the most important duties in the community achieve their goals of homeownership. As the purpose of the program is dual, so is the incentive; HUD offers borrowers who qualify a fifty-percent discount from the list price of the home, and in exchange, you must agree to purchase and live in one of the pre-determined eligible properties for thirty-six months (three years) as your sole residence.
What are the requirements for borrowers?
As with all loan programs and benefits, certain requirements are in place both for eligible borrowers and the properties being purchased. The requirements vary depending on which role you occupy within your community.
- Law Enforcement: To participate in the Good Neighbor Next Door program as a member of law enforcement, you must be employed full-time by a law enforcement agency of the federal government, state, unit of general local government, or Native American tribal government.
- Teachers: To participate in the Good Neighbor Next Door program as a teacher, you must be employed as a teacher full-time by a state-accredited public or private school. The school must provide services to students from the pre-kindergarten ages through 12th grade. Additionally, if you are qualifying as a teacher, the area in which you purchase a home through the program must be the same as the area in which you work.
- Firefighters and Emergency Medical Technicians: To participate in the Good Neighbor Next Door program as a firefighter or EMT, you must be employed full-time as a firefighter or EMT by a fire department or emergency medical services responder unit of the federal government, state, unit of general local government, or Native tribal government. You must also serve in the area where the home is located.
Financing for homes through this program is available through the FHA. Standard FHA requirements apply. You must also be able to finance all the closing costs and pre-paid expenses associated with the purchase through an FHA-insured mortgage. HUD also requires that you sign a second mortgage note for the discounted amount. No interest or payments are required on this second (called a “silent second”), and provided you fulfill the minimum occupancy requirement, the second mortgage is forgiven at the end of three years. All equity in the home then becomes yours.
What are the requirements for properties?
With the Good Neighbor Next Door program, eligible homes are located in what HUD calls revitalization areas. Areas chosen for revitalization must meet certain criteria based on median household income, homeownership rate, and FHA-insured mortgage foreclosure activity. Homes located in revitalization areas are listed for sale exclusively through the Good Neighbor Next Door program; the listings last for seven days and change weekly. If more than one qualifying borrower submits an offer on any one home, a selection will be made by HUD via a random lottery. The number of properties is limited.
At Southern Trust Mortgage, we are grateful to the women and men who help to make our communities better every day. We’ve been helping community heroes just like you purchase homes since 1998. Contact us today; we would be honored to help make home happen for you.