The Good Neighbor Next Door Sales (GNND) program is a federal revitalization initiative through HUD that provides homeownership at a substantial discount to qualified buyers. Under this Florida Home Loan program, HUD offers a 50% discount on the list price of a qualified home as long as the buyer commits to live in the property for a minimum of 36 months and maintains the property as the sole residence. Law enforcement officers, pre-K through 12th grade teachers and firefighters/EMTs that are employed full-time by federal, state or local governments are eligible to participate in the Florida Home Mortgage Good Neighbor Next Door Program.
Eligible single family homes located in HUD-designated revitalization areas are listed exclusively for sales under the GNND program. Interested qualified buyers can contact their local HUD office for a listing of properties in their area.
Under this Florida Mortgage program, the eligible home is offered at a 50% discount off the HUD appraised value. The buyer may use FHA, VA, or conventional mortgage or cash to purchase the home. HUD requires you to sign a second mortgage for the remaining 50% of the appraised value. No interest or payment is required on the second mortgage if you live in the house for the entire 36 month occupancy period. If you fail to remain in the house for the full occupancy period you may be required to pay a pro-rata portion of the discount.
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Question: What Is the Good Neighbor Next Door (GNND) Program?
Answer: A program to strengthen America’s communities offered through HUD. The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes at a 50% discount.
Question: Who is eligible for the GNND Sales Program?
Answer: Law enforcement officers, teachers and firefighters/emergency medical technicians who meet all other requirements of the program.
Question: How does the discount work?
Answer: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided you occupy the home as your personal residence for the required occupancy period.
Question: How can I finance the purchase of the home?
Answer: You may use Florida Home Mortgage Programs such as FHA, VA, or conventional mortgages, or cash. You are required to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.
Question: What is the Occupancy Period?
You must live in the home as your sole residence for a full 36 months.
Question: Can I sell the GNND home after 3-years?
Answer: Yes. After you live in the GNND home 3 years, you can sell the home and keep any equity and/or appreciation.
Question: Do I have to use a real estate broker or agent to buy a GNND home?
Question: Do I have to be a first time homebuyer?
Answer: No. However, you may not own any other residential property at the time you submit your offer to purchase a home and for one year previous to that date. For example, if you submit an offer to purchase a home on July 1, 2010, you may not have owned a home during the period from June 30, 2009.
Question: Where are these homes located?
Answer: The HUD homes are located in designated Revitalization Areas throughout the US.
Question: Is the appraised value of the home negotiable?
Answer: No. You must offer the exact HUD list price when bidding on any GNND property. Then you get a 50 percent discount off that list price.
Question: What if I leave the employment that made me eligible during the Occupancy Period?
Answer: Nothing as long as you live in the home for 3 years. When you purchase the home you provide a good faith intention to remain employed as a law enforcement officer, teacher or firefighter/emergency medical technician for one year beginning with your purchase. Do no attempt to participate in the program if you know in advance that you will not be employed for at least one year.
Question: What happens if I fail to honor the 3-year Occupancy Period?
Answer: HUD can demand repayment of the discounted amount on a prorated basis. That means you would have to repay 1/36th of the discount you received for each month that you did not occupy the home.
Question: How does HUD enforce the 3-year Occupancy Requirement?
Answer: The participant must certify he or she is living in the home as a sole residence at the time of purchase and each year after. HUD can conduct spot checks to make sure the home is your sole residence at any time during the 3-year period. You also must sign a note and mortgage for the discount amount.