To see if you qualify, read through the FAQ section below.
These are the only homes in the country that are available for a 50% discount through HUD’s GNND program.
This is what to expect when buying a Good Neighbor Next Door home.
Visit our FAQ section to learn details concerning the GNND program.
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If you meet the qualifications, we will enter your name in the lottery before the deadline. HUD will randomly select a winner and two backups. You can't bid above or below list price.
After your name is selected, you will sign a contract with HUD. After HUD approval, you will have 15 days to inspect your home. Closing will be 30 - 60 days after contact approval.
If you are qualifying as an educator, you must be a full-time, state certified, classroom teacher. Support staff do not qualify for this program.
No. This is a lottery process. Every qualified prospect has an equal chance of being selected. HUD randomly selects from the list of social security numbers of the people who have entered the lottery.
HUD requires that you or your spouse, if married, cannot have had ownership interest in a residential property in the previous 12 months. So, if you sold and closed on your home more than 12 months ago, and you have not purchased a new one, then you will qualify for the GNND program.
HUD prices the homes according to their condition and sell them “AS IS.” If you don’t have the cash to make desired renovations, you can use a special mortgage program called FHA 203K. This allows you to decide how you want to repair/remodel the home and then increase your home loan to include those costs. The home must be able to appraise for the purchase price plus repair costs.
After three years of occupancy, HUD will release your GNND second mortgage. You decide what you want to do next. Some will use it as an investment home they rent out. Others will keep it as their primary residence. You can also sell the home and realize all of the gain.
The lender will provide you with an expected estimate of closing costs. In addition to their typical list of costs will be the buyer premium that will be paid to the Realtor. HUD requires that the participant use a HUD certified broker but requires the GNND participant to pay for their services. This amount can be added to the buyer’s FHA mortgage.
No. HUD designates which homes qualify for the GNND program. Homes from their inventory that are located in “revitalization areas” qualify for the GNND program. These areas have a higher-than-average FHA foreclosure rate and renter to homeowner ratio.
The goal of the program is for contributing members of our society to invest in and bring stability to certain neighborhoods. In order to accomplish this, HUD requires that participants own and occupy their GNND home for three years.
When you close on a GNND home, you sign a GNND second mortgage that is held by HUD for the amount of discount that you received on the home. This second mortgage allows HUD to monitor your home ownership. (There is no interest or monthly payment associated with this second mortgage.) If you sell your home before the 36 month anniversary, HUD will be notified and will require a prorated payback of the GNND discount. For every month that you own and occupy the home HUD will forgive 1/36th of the GNND second mortgage. After 36 months, the second mortgage will automatically be released. Additionally, HUD will send you a yearly certification form that you must sign stating the you have continued to own and occupy the home.
There are incentives for participants to utilize FHA financing through their lender of choice. Specifically, your down payment is reduced from 3.5% to $100 and you can finance all of your closing costs into your mortgage.
If your social security number is selected in the GNND lottery, along with signing a contract and providing a prequalification letter, you will be required to submit an earnest money check equal to 1% of the list price of the home. (The amount before the 50% discount.) There is a $500 minimum and $2,000 maximum. The earnest money is held with the buyer’s title company and will be credited back to the buyer at closing.