The Good Neighbor Next Door Program

Good Neighbor Next Door and HUD


HUD’s Good Neighbor Next Door Program and other HUD Information.


good neighbor next door HUDWhen you buy a home through HUD you should familiarize yourself with their special home-buying programs.


The first one is known as the (GNND) Good Neighbor Next Door program. This is the program where firefighters, emergency technicians, pre-kindergarten teachers up to 12th grade teachers, and law enforcement officers can contribute to the revitalization of their community while they become homeowners via the Good Neighbor Next Door home program.


HUD offers these qualified people a very substantial incentive (50% discount off the price of their home). They have to commit to living in the home for 36 months with that home as their sole residence.


How it Works


These qualified single-family homes i the revitalized areas get listed exclusively to be sold via the GNND program and are available for purchase for 7 days.


To participate you need to check those listings that are specific to your own state. Then simply follow the instructions and submit your information showing interest in buying a specific home.


When there are more than one person submitting an offer for a single home the selection is made via a random lottery. You must be able to meet the requirements of what is considered to be a teacher, emergency technician, firefighter, or law enforcement officer, as well as be in compliance with all of the HUD regulations governing the program.


HUD requires all recipients of the discount to sign a 2nd mortgage note. There are no payments or interest required on that ‘silent second’ note on the condition that the 3-year occupancy requirement is met.


They have a limited number of properties available and the list changes every week. If anyone is interested in a Good Neighbor sale they should contact the HUD agency in their state. You can go onto and click on your state for more information.


HUD Home Store


This is where you can find the listing for HUD REO (real estate owned) single-family properties. On this website you’ll be able to search the HUD inventory of the properties they have for sale.


Additionally, registered real estate brokers along with other similar organizations are able to place bids for purchasing HUD properties on behalf of their clients. There is a lot of guidance and advice on this website regarding the buying process. They have them categorized to make the information easier to sort through. Categories like –


Real Estate Agents


Non-Profit Organizations & Government Entities


General Public


Mortgage Industry Members


make locating the information you need much faster and a lot easier.


HUD Homes Explained


HUD home is a one to four unit residential property. It has been acquired by HUD due to foreclosure actions on an FHA-insured mortgage. When HUD becomes the owner of the property they put it up for sale so the loss on the foreclosure claim can be recovered.


Who May Buy a HUD Home?


Anybody who has the cash or who is able to qualify for a loan can purchase a HUD home. They are usually offered first to owner-occupant owners, however, after the priority period is over for the owner-occupants, any unsold properties are made available to all buyers, investors included.




HUD doesn’t provide any direct financing to the buyers of HUD Homes. They have to get their financing via their own personal cash reserves or from a mortgage lender. Anyone who can qualify for a loan or who has the necessary cash can purchase HUD homes. While HUD themselves cannot offer any financing, potential home buyers can apply for an FHA-insured mortgage and get financing that way.


All HUD homes get appraised at the fair market value in relation to their location. If the home needs a few repairs, the price gets adjusted downward to reflect how much the new owner will need to invest in order to make improvements to the home. All HUD homes are sold ‘As-Is’ and HUD has no responsibility toward making any repairs.


How Does HUD Sell Their Homes?


HUD foreclosures get sold using the good old ‘bidding’ process. There is a period for offers in which potential buyers submit sealed bids to their agent. After that all the offers get opened up. HUD usually accepts the highest bid (or the one that brings in the highest net).


After the initial period, if a home doesn’t sell, the bids are opened as they come in. If you put in a bid that’s accepted, your agent is usually notified within a couple of days. You are then given a settlement date (most often from 30 to 60 days) from the date on your accepted contract.


HUD pays a commission of around 6% of the home sale price to the real estate agents. In order for any agent to be paid they must add words to the contract verifying HUD will be paying their commissions.


What About Buying HUD Foreclosures as Investments


This can done only if there are no owner-occupants bidding on the home. Owner-Occupants get first refusal rights. This is the purpose of the initial offering period. Once that time has passed and no owner-occupants have bid on the home, investors may get into the bidding.


Additional HUD Programs


When a foreclosure doesn’t sell within a six month period, HUD actually sells them for $1 each to government agencies and non-profit organizations. Those homes MUST be used for creating family housing for needy families or for the benefit of certain neighborhoods. Again, all the HUD programs can be found on their website where you can click on your specific state and find the information you need.

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Craig Jackson

Craig Jackson

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