Good Neighbor Next Door Program: 50 Percent Off Houses for Teachers, Firefighters, EMTs and Cops

Home prices are high these days. But how does 50% off sound?

If you’re a teacher, firefighter, EMT, or law enforcement officer, you may be able to purchase a home for half the list price through the Good Neighbor Next Door program.

What is the Good Neighbor Next Door program?

Operated by the U.S. Department of Housing and Urban Development (HUD), the Good Neighbor Next Door program helps homebuyers in community-oriented professions buy homes for 50% off the list price.

To be eligible for HUD’s Good Neighbor Next Door program, you must be in one of the following professions:

• Pre-kindergarten through 12th-grade teacher
• Firefighter
• EMT
• Law enforcement officer

You must also purchase a home that is a designated Good Neighbor Next Door property.

How does the Good Neighbor Next Door program work?

The Good Neighbor Next Door program (GNND) allows you to buy a house for 50% less than the list price.

Here’s how that works:

1. You take a mortgage loan for half of the home’s list price
2. You’ll receive a second mortgage for the remaining cost of the home. But you will not owe payments or interest on the second mortgage as long as you live in the home for at least three years
3. After three years, the second mortgage is forgiven if you have met all GNND requirements

Occupancy requirement

All Good Neighbor Next Door homebuyers must live in the property as their primary residence, and they must live in the home for at least three years. You cannot purchase a Good Neighbor Next Door home as a rental property.

Three-year residency requirement

You will need to submit an annual certification of residence each year for your first three years in the home. If you live in the home for at least three years, the second mortgage on the home will be forgiven, and you will not have to pay on it at all.

You will, of course, need to continue making payments on the first mortgage until it is paid in full or you sell the home.

Exceptions for military homebuyers

According to the HUD website, military homebuyers are exempt from the three-year residency requirement when they are called to active duty.

They are also allowed to rent out the home while on active duty if they believe that doing so will reduce the risk of vandalism, as opposed to the property being vacant while they are on duty.

Homeowners who are called to active duty during their initial three years in the home must provide documentation of their orders to the National Servicing Center (NSC), which oversees Good Neighbor Next Door loans after they close.

Where to find Good Neighbor Next Door Homes for sale

Good Neighbor Next Door Homes are available in revitalization zones throughout the country and in Puerto Rico. But they’re not available in all 50 states.

These homes are not available in:

• Hawaii
• Idaho
• Montana
• Nebraska
• New Hampshire
• Oregon
• Utah
• Washington, D.C.

Although Good Neighbor Next Door homes can be found in Puerto Rico, they’re not available in other U.S. territories, including Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands.

You can search for HUD Good Neighbor Next Door properties here.

How do you qualify for a Good Neighbor Next Door home loan?

First, you’ll need to provide your lender with proof that you are employed full-time in a qualifying profession.

You’ll also need to get preapproved* for a home loan. During the preapproval process, your lender will verify your income, check your credit score and credit history, and determine your debt-to-income ratio (DTI).

They’ll use this information to calculate how much you can afford in a monthly mortgage payment.

Although you can purchase a HUD Home using any type of loan, you’ll need to use an FHA loan to get the 50% discount through Good Neighbor Next Door.

Also, if you purchase a Good Neighbor Next Door loan with an FHA loan, you get the option of putting just $100 down on the property. Typically, homebuyers need to put down at least 3.5% on an FHA loan, so that’s a very low down payment.

It’s worth noting that not all lenders work with the GNND program, so you may need to shop around to find one that does.

Do nurses qualify for the Good Neighbor Next Door program?

Other than EMTs, medical professionals are not eligible for the Good Neighbor Next Door program. However, the Nurse Next Door program offers grants and down payment assistance for nurses. It’s important to note that the Nurse Next Door Program is not a type of loan, but a service that matches qualified homebuyers with a home and down payment assistance options.

Some lenders also offer specific assistance programs for nurses, physicians, and other medical professionals.

Related reading: Physician Loans Remove Homeownership Hurdles for Medical Professionals

The bottom line

The Good Neighbor Next Door program can make homeownership easier for folks whose work is vital to their communities. Firefighters, teachers, EMTs, and law enforcement officers are essential to community health and safety, and they deserve affordable places to live.

Good Neighbor Next Door gives them a way to put down roots, and a way to get ahead in a particularly competitive housing market.

Key Takeaways

• The Good Neighbor Next Door program allows select buyers to purchase a home for 50% off the list price
• Teachers, EMTs, firefighters, and law enforcement offers are eligible for the program
• You must live in the home as your primary residence and you must stay in the home for at least three years

*Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.