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HUD's Good Neighbor Next Door Program Offers Half Price Homes
Since the bursting of the bubble, foreclosure sales have been popping up everywhere, attempting to entice buyers with low, attractive prices. Some special deals, such as the Good Neighbor Next Door program, attempt to sweeten the pot even more.
Under the Federal Housing Administration (FHA), the Good Neighbor Next Door program sells homes for half their price. The program is open exclusively for buyers who are teachers, law enforcement officers, firefighters and EMTs. The homes sold are insured by the FHA and foreclosed on, therefore, allowing the Department of Housing and Urban Development (HUD) to sell them at half price, reports Mortgage Lending News.
The program does come with a few requirements and considerations, however. The prospective buyers must also be willing to relocate to one of the program-offered areas. Buyers meeting the professional requirements must also serve in the jurisdiction where the house is located in order to quality.
Once all of the requirements have been fulfilled, the buyer then agrees to pay half of the appraised value as determined by HUD. The other half is seen as a "silent second" mortgage, with no principal or interest payments. Once the house becomes the buyer's primary residence for at least three years, the buyer is then forgiven from paying the second half, says Mortgage Lending News.
The neighborhoods involved in the program are what the FHA calls "revitalization areas," offering a combination of low income households, low homeownership rates and a high number of foreclosures of FHA-insured property. According to HUD, "the goal of this program is "to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community."