A reader asked us a question recently in the comments section about the HUD Good Neighbor Next Door program. “I am a 13 year veteran Corrections Officer of the Maryland’s DCSCS and I wanted to inquire as to whether or not I qualified for the Good Neighbor Next Door Program.”
The HUD Good Neighbor Next Door program is mentioned on the FHA/HUD official site, which states, “Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.”
The program works by directing eligible borrowers to “Single Family homes located in revitalization areas” which are listed “exclusively for sale through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program forseven days.”
Who is permitted to participate in this program? According to the HUD official site:
You may participate in the Good Neighbor Next Door program as a law enforcement officer if you are employed full-time by a law enforcement agency of the federal government, a state, a unit of general local government, or an Indian tribal government; and, in carrying out such full-time employment, you are sworn to uphold, and make arrests for violations of, federal, state, tribal, county, township, or municipal laws.
You may participate in the Good Neighbor Next Door program as a Teacher if you are employed as a full-time teacher by a state-accredited public school or private school that provides direct services to students in grades pre-kindergarten through 12. In addition, the public or private school where you are employed as a teacher must serve students from the area where the home you are purchasing is located in the normal course of business.
Firefighter/Emergency Medical Technicians
You may participate in the Good Neighbor Next Door program as a Firefighter/Emergency Medical Technician if you are employed full-time as a firefighter or emergency medical technician by a fire department or emergency medical services responder unit of the federal government, a state, unit of general local government, or an Indian tribal government serving the area where the home is located.”
HUD requires borrowers who participate in this program to “sign a second mortgage and note for the discount amount. No interest or payments are required on this ‘silent second’ provided that you fulfill the three-year occupancy requirement.”
What kind of mortgage loans are permitted under this program? FHA, VA, or conventional mortgages, or cash, according to HUD. Additionally, “You must live in the home as your sole residence for a full 36 months. The purpose of the program is to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community.”
The HUD official site says borrowers will have up to 180 days to move into the home you purchase, “depending on HUD’s determination of the condition of the home and the level of repairs that may be required, if any. The 30th, 90th or 180th day is the start date for the occupancy period. You are released from all obligations under this program at the end of the 36th month following the start date. HUD views the occupancy obligation seriously and vigorously pursues violators to the fullest extent of the law.”
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