I found out today about a program offered through the U.S. Department of Housing and Urban Development called “Good Neighbor Next Door.”  The program allows qualifying folks (namely, law enforcement, emergency medical personnel, and schoolteachers) to purchase qualifying HUD foreclosures at 50% below list price.  All you have to do is maintain the home as your sole and primary residence for 36 months.

As a mortgage broker, I see a bunch of “down-payment assistance” programs.  Most involve channelling seller’s funds through some entity to the borrower.  Almost every one is shady and not the type of program I would do business with.

The Good Neighbor Next Door program, however, is completely legitimate.  I spent some time on the phone with the folks who run the program and got all my questions answered.

Here is how it works:  You find a qualifying home by searching the site provided by HUD.  You make a list price offer on the home, and obtain a mortgage (FHA or conventional) for 50% of the purchase price.  HUD then grants you a second mortgage for 50% of the value.  There are no payments or interest due on the HUD mortgage, and if you fulfill the terms of the program, HUD releases their mortgage after 36 months….leaving you with 50% equity in the home.

If you have to sell early, they even prorate the 50% second mortgage by the number of months you have actually occupied the property.

The HUD person I spoke to told me that this was their “best-kept secret” but they were trying to get the word out.  I think this is a phenomenal program, and if I qualified I would absolutely take advantage.  For more information, visit the HUD page on the Good Neighbor Next Door program at http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm.

So if you are a schoolteacher or a cop and can find a qualifying house, go buy yourself a home for 50% off!

Disclaimer:  I am not affiliated with HUD, FHA, or the Good Neighbor Next Door program, and receive no compensation from any of those organizations or programs.

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This entry was posted on Tuesday, April 3rd, 2007 at 5:57 pm and is filed under Promotions, Buying a Home. You may e-mail this post to a friend. You may print this page. Responses are currently closed.