Good Neighbor Next Door

Good Neighbor Next Door, also known as GNND, is a program offered by the Department of Housing and Urban Development (HUD). The program is available to teachers, firefighters, police officers and emergency medical personnel who are looking for affordable new homes. To participate in the program, homeowners must agree to live in their new houses for a set period of time. In return, they can receive an HUD home for a drastically reduced rate.

The Good Neighbor Next Door program is a great incentive offered in the HUD’s revitalization areas. A revitalization zone is a geographic area that is established based on the median income, as well as the local foreclosure rate. By encouraging teachers and first responders to live in such areas, the HUD is working to revive local communities. Below, learn more about the Good Neighbor program, and discover how to get a new home in one of these areas.

Good Neighbor Next Door Benefits

HUD Good Neighbor was created mainly in order to revitalize communities in need. The presence of teachers and first responders in a community is associated with having a positive impact on a neighborhood, as a whole, which is why the HUD encourages these applicants to buy homes in revitalization areas.

By participating in HUD Good Neighbor Next Door, the most significant personal benefit you receive is a discount on the sale price of your home. When looking for HUD homes in revitalization areas, you will find that home prices are reduced by 50 percent, if you participate in the program.

If you qualify for Good Neighbor Next Door, you may also be eligible for a Federal Housing Administration (FHA)-insured mortgage program. In such cases, you will be able to make a very modest down payment on your home, rather than paying a percentage of the home’s selling price.

Good Neighbor Next Door Program Eligibility

Before asking how to apply for Good Neighbor Next Door program benefits in your community, it helps to understand the eligibility criteria better. You will qualify for Good Neighbor homes if you fall into one of the following categories:

  • Law enforcement personnel
  • Teachers
  • Firefighters
  • Emergency Medical Technicians (EMTs)
  • Other first responders

Note that specific requirements apply to each of these categories. For more information on the exact eligibility criteria you must meet, download our comprehensive guide on the GNND program.

No matter which the category into which you fall, there are no income or financial requirements for this program. However, if you plan on financing your home with an FHA-insured mortgage program, you will need to check the specific eligibility criteria for FHA loans in which you are interested, to ensure you qualify.

How to Apply for the Good Neighbor Next Door Program

If you qualify for Good Neighbor Next Door, it is easy to start your search for a home. To begin, you will need to look at the HUD home listings in your area, and locate a home that is within a revitalization area. Obtaining an HUD home requires that you work with a real estate broker, in order to place a bid. In the event that there are multiple bids on a home, the HUD will hold a lottery drawing to fairly and effectively select a homeowner.

Buying a HUD Good Neighbor Home is similar to the process of purchasing a home through conventional methods. You will need to have cash on hand, or qualify for financing, in order to pay for your house. Any type of mortgage loan can be used to pay for your home. Furthermore, you should also have the home inspected before going through the closing procedures.

One major difference when purchasing a HUD Good Neighbor house is that you must sign a second mortgage and a note equal to the amount of your discount. However, no payments or interest will be due on your second mortgage, provided that you meet all of the program criteria, such as the occupancy requirement.

Where are Good Neighbor Next Door revitalization areas found?

When looking for a home in the HUD Good Neighbor Next Door program, you may be wondering what a revitalization area is, and where to find one. A revitalization zone is simply a geographic area designated by the HUD and approved by Congress. The HUD determines revitalization areas by looking at criteria, such as the median household income, the rate of homeownership and the prevalence of FHA-insured mortgage foreclosures.

When using the HUD Home Store to locate houses for sale, each listing will indicate whether or not it is in a revitalization area. Finding a revitalization area can sometimes be challenging, but once you start your search, it is possible to find these zones all throughout the country.

Retaining Your GNND Eligibility

Once you move into a Good Neighbor program home, you will need to meet a few qualifications in order to remain eligible. Most importantly, you must remain in your home for a minimum number of months so that you can keep your discounted home price.

Additionally, you need to recertify your eligibility every year. Failing to certify for the Good Neighbor Next Door program on an annual basis will result in your case being investigated. If you do not uphold the occupancy agreement, you will be held accountable for the full price of the home. Providing false information on your certification comes with serious consequences.

Note that you do not lose your eligibility if you leave the place of employment that helped you qualify for the program in the first place. For example, if you were a teacher when you applied for a home, you will not be disqualified if you get a different job during your residency in your home. For more information on retaining your GNND eligibility, download our detailed guide.

Getting Released from the Good Neighbor Program

Upon meeting the minimum occupancy requirements for Good Neighbor Next Door, you will be released from your obligations. At this time, your second mortgage amount will be satisfied with the local county recorder, and you will receive a copy of this notice.

However, you will not be released if you are currently under investigation, or if you have failed to comply with the program requirements. In such cases, you will need to pay the balance of your second mortgage, instead of having it absolved.


What Are FHA Loans?

The Federal Housing Authority (FHA) insures mortgages and approved lenders to offer mortgages to eligible borrowers. Although available to all home buyers, the requirements of the loan make it attractive for first-time buyers. FHA-approved mortgages typically allow buyers to provide a smaller down payment and apply with a lower credit score than standard home loans. FHA loans covers many needs, including energy efficiency repairs and mobile home financing. Find out about FHA loan benefits in our guide.

Who Is Eligible For An FHA Loan?

If you are interested in getting a home loan through an FHA-approved lender, you must meet program requirements. The most important factor is choosing a mortgage provider approved by the FHA. Employment history is another crucial eligibility factor, as lenders will require proof of employment for the previous two years. Lenders will review your potential expenses, lending histories and your current debts to determine if you can pay your mortgage. Find out more about FHA loan eligibility by downloading our guide today.