December 10, 2019

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FHA Good Neighbor Next Door Loans

140A reader asks, “Im active duty military stationed overseas with 2 years left on my tour, and I’m interested in buying a home in my state or record to return to. If I take leave and occupy the house multiple times throughout the year, and have family watch it. Am I able to qualify under the FHA Good Neighbor Next Door Program? Or is that unlikely?

The FHA Good Neighbor Next Door program is described on the FHA official site:

“The Good Neighbor Next Door (GNND) sales incentive permits an Owner- Occupant Borrower who is a full-time law enforcement officer, teacher, firefighter, or emergency medical technician who meets HUD requirements to purchase a specifically designated HUD REO Property located in a HUD- designated revitalization area with FHA-insured financing at a 50 percent discount from the purchase price.”

This program also has a special down payment incentive-a minimum down payment of $100.

The Good Neighbor Next Door program also has an occupancy requirement. As stated in HUD 4000.1, page 707, there doesn’t seem to be any provision for the scenario described in the reader question. Good Neighbor Next Door borrowers are required to take occupancy of the property within a specified time after closing and maintain occupancy in the property as the primary residence.

The specific occupancy requirements are as follows, as printed in HUD 4000.1:

“The Good Neighbor Next Door (GNND) participant must live in the Property as their sole residence for an owner-occupancy term of 36 months, beginning on one of the following dates:

-30 Days after closing if the home requires no more than $10,000 in repairs before occupancy;
-90 Days after closing if the home requires more than $10,000, but not more than $20,000 in repairs; or
-180 Days after closing if the home requires more than $20,000 in repairs prior to occupancy.”

Speak to a loan officer about these requirements if you are unsure how they might affect your specific needs.

Joe Wallace - Staff Writer

By Joe Wallace

November 10, 2016

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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