There are certain people within communities that do an exceptional job making the community safe and successful. These people can get rewarded via the Good Neighbor Next Door program which is meant to help both communities and certain special people within those communities. The program is sponsored by HUD and offers eligible borrowers up to 50 percent off of the price of a home within certain boundaries. In exchange for the discount, however not only do you have to be eligible, but you have to agree to live in the home for at least 36 months as your primary residence.
Who Qualifies for the Good Neighbor Program?
Community workers within a certain area are eligible for the program. This includes the following types of employees:
- Law enforcement officers
- Emergency medical technicians
In general, anyone within these categories is eligible for the program however there are some stipulations that must be followed. For example, teachers must teach at the district that the home they live in serves; must work there full-time; and must teach at a public school for grades Pre-K to 12th grade. Most law enforcement, firefighters, and policemen/women are eligible as long as the home is within the area served by the police or fire department that they work and they work full-time.
Where do you Have to Live?
In order to qualify for the program, you must live in a “ revitalization area” which is determined by the FHA. In general, this means an area that has many foreclosures, typically FHA foreclosures, and needs some positive strengthening with employed, professional people that will do whatever it takes to bring the community back together. The reason the program requires you to live in the home for 3 years is to give time for the area to build back up. Some homes will need extensive work in order to make them livable while others just need time for the community itself to adjust. The home you purchase must also be a single family home – multiple units are not allowed and HUD follows the occupancy requirements very closely – once your 36 months are up, you are free to do what you wish with the home.
What are the Other Requirements?
In general, you can take on any type of loan in order to purchase a Good Neighbor Next Door home. This means an FHA, VA, or conventional mortgage is perfectly acceptable. Some borrowers even take an FHA 203K loan in order to have the funds to fix the house up. If this is the case, you may be eligible to live elsewhere while the work is completed if it is structural and the home inhabitable. HUD also requires that this is the only home you own during the 3-year period – you cannot purchase this as a 2nd home or even own another home which you rent out – this home can be your only home.
If you work within the community, consider how the Good Neighbor Next Door program could help you and the community in which you serve. Purchasing a home that was otherwise foreclosed on and could sit vacant for many years, running the community down could be detrimental to the area which you work. With 50 percent savings on the price of the home, it is a great way to enhance your community while making a profit after your 3-year occupancy requirement is complete.