The HUD Good Neighbor Next Door program offers incentives for law enforcement officers, teachers, firefighters and emergency medical technicians who buy properties in certain areas.
Through the program, homeowners can get a 50% decrease on the price of their home. Homeowners must commit to live in their home for at least three years and the home must be their primary residence.
Patrick Smith | US Gov Connect
This program is a good way to revitalize and strenghten communities as well as to help people with modest incomes afford housing. Of course, there are restrictions that vary from community to community. In order to find out if you qualify, you can check out the HUD website. Properties available through the program are listed through the Good Neighbor Next Door Sales program. Properties are available for purchase for a limited time, usually about 5 days. If more than one person applies for a house, a lottery will be established to see who can purchase the property. The number or properties is limited and changes from week to week. If you see a property that interests you, you should inquire about it right away.
When you purchase your property, you will be asked to sign a second mortgage or "silent second" promising to pay the additional 50% of the mortgage. You will not be asked to pay the interest or the principal on this loan as long as you meet the requirements of the program. However, if you do not live in the property that you have purchased for 3 years, you will be asked to re-pay the second mortgage. For example, if your home is priced at $100,000, you can purchase it for $50,000. If you qualify for an FHA mortgage program, your down payment on that home would only be $100! You can finance the closing costs too. As long as you live in your home for 3 years, you will not have to pay back the additional $50,000 on the loan. If you must move or break the agreement, you will be asked to pay a pro-rated rate on the silent second mortgage based upon how long you did live at the property. If you are only a few months short of the three year period, the amount you owe will be less than if you stayed at the property for only a few months.
Under the requirements of the program, you will have up to 180 days to move into the new home that you purchase. This is in case you have to make repairs to the home. The amount of time you have is based upon the amount of work that the agency determines is needed on the property. Before you sign on the dotted line, be aware that HUD does take this occupance obligation very seriously and will check to make sure that homeowners have complied with the regualtion.
If you are short on cash, this may be just the program that you have been looking for in order to help you get out of your apartment and into a new affordable home. Take some time today to check out the Good Neighbor Next Door Program.
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