What Is a Good Neighbor Next Door Loan?

The Good Neighbor Next Door program allows law enforcement officers, teachers, firefighters or emergency medical technicians to purchase homes at lower-than-usual rates. This program exists to help individuals who work full time in public services to purchase homes in certain communities. The borrowers must meet certain eligibility requirements set by the Department of Housing and Urban Development.

This program provides 50% off of the list price for designated homes. Qualifying homes are those which have been repossessed by the FHA after the prior homeowner defaulted on an FHA mortgage. You can use this loan along with Section 203(k). Note that the 50% discount takes the form of a second mortgage without interest or payments as long as the borrower lives in the home as a primary residence for at least 36 months.

Tellus TIP:

This program provides an excellent cost-saving opportunity to qualifying individuals and for certain properties. However, keep in mind that you must use the home as your primary residence for 36 months after purchase.