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Your Guide To The Good Neighbor Next Door Home Financing Program

Molly Grace4-minute read

May 16, 2021


In an effort to strengthen communities and encourage homeownership, the Good Neighbor Next Door (GNND) program offers home on the cheap to public servants.

Though inventory is extremely limited, public servants who meet program requirements and are able to find an eligible property can benefit from significantly discounted homes and, if they get FHA-backed financing, very low down payment requirements.

Wondering how to qualify for this program? Here’s everything you need to know about GNND.

What Is The Good Neighbor Next Door (GNND) Program?

GNND is a program offered by the U.S. Department of Housing and Urban Development (HUD).

GNND allows eligible buyers who work in certain public servant fields to purchase HUD homes in revitalization areas at a 50% discount.

A HUD home is a foreclosed property that was initially purchased using an FHA loan.

Eligible program participants include:

  • Law enforcement officers
  • Teachers
  • Firefighters
  • Emergency medical technicians (EMTs)

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How Does GNND Work?

By helping public servants more easily afford homeownership, HUD encourages growth and community-building in economically distressed communities known as revitalization areas.

What exactly does that mean? Revitalization areas are specially designated areas where government programs such as GNND can be used to promote homeownership. Revitalization areas are created based on an area’s median household income, rate of homeownership and number of FHA foreclosures.

Though anyone can buy a HUD home, buying one offered through the GNND program means you’ll get a 50% discount off the list price. Since HUD homes already tend to be priced to sell quickly, program recipients can potentially purchase a home at an incredibly low price.

How The Discount Works

When you buy a home through the GNND program, you’ll typically get a loan to finance the property. Though you’ll only be paying 50% of the list price, that other 50% doesn’t automatically disappear.

The discounted half of the home’s price will be paid for by a second mortgage through HUD. As long as you fulfill occupancy requirements (more on that further down), you won’t have to pay this “silent” second mortgage.

Once you’ve lived in the home for 3 years, the second mortgage will be released. Once released, you’ll no longer be restricted by program rules and can do as you wish with the property.


If you use an FHA loan to purchase your GNND property, it’s possible to make a down payment of just $100 (traditionally, a down payment on an FHA loan would be at least 3.5% of the purchase price).

Other loan types, such as conventional or VA mortgages, can be used as well, though you won’t get the $100 down payment option.

If the property needs extensive repairs, you may also use a 203(k) loan, which allows you to combine a home’s purchase price with repair costs into a single mortgage.


This all sounds great, right? Here’s the catch: Though this program can greatly benefit those who qualify for it, inventory of eligible GNND homes is limited, to say the least. In fact, there are typically only a handful of available GNND homes available in the entire U.S. at any given time.

You can check out GNND’s current inventory on the HUD HomeStore.

Who Qualifies For GNND?

Let’s take a look at the specific requirements you’ll need to fulfill to be eligible for this program.

Regardless of which of the following professions you belong to, you must be serving the area in which your GNND home is located. For example, a teacher would need to purchase a home within the same city or school district they’re employed in.

Program recipients need to be full-time employees in their qualifying profession and must certify that they intend to remain in that profession for at least one year after closing on the home.

You can only use this program once, so if you’ve already purchased a GNND home, you’re ineligible.


Teachers can qualify for GNND if they’re employed by a state-accredited public or private school that serves students in pre-k through grade 12.

Law Enforcement Officers

Law enforcement officers must be employed by a federal, state, local or tribal law enforcement agency.

Firefighters And EMTs

Firefighters or EMTs much be employed by a federal, state, local or tribal fire department or emergency medical services responder unit.

Other Requirements

In addition to belonging to one of these professions, there are a couple other requirements you’ll need to fulfill as well.

In order to receive the discounted purchase price, you’ll need to agree to keep the home as your primary residence for at least 3 years. Each year, you’ll be required to certify that you’re still living in the property. HUD will mail this certification to you for you to sign and return.

You can’t purchase a GNND home if you’ve owned a home in the previous year.

If you’re getting a loan to purchase the home, minimum credit score and other requirements will depend on the loan program you’re using and individual lender requirements.

FHA loans, for example, usually require a minimum score of 580. Some lenders allow borrowers to go as low as 500, but you won’t have access to the lowest down payment options.

How To Find A GNND Home

You can find all available GNND homes on the HUD HomeStore website. This site works a lot like other real estate listing sites, with basic information on the property and pictures of what it looks like.

Because these are distressed properties, they’re sold as-is and often need significant repairs. This is where FHA 203(k) loans can come in handy, since they enable borrowers to finance repair costs along with the purchase price of the home.

However, if you’re looking for a home that’s already move-in ready, the GNND program might not be a great fit for you.

If you’re able to find a GNND-eligible home you’d like to purchase, you’ll need to work with a HUD-registered broker or agent, who will submit a bid on your behalf.

Properties are only available for a 7-day period, so it’s important to act fast if you find a home you want. If multiple bids are made on a property, the buyer will be chosen by random lottery.

The Bottom Line

The promise of the GNND program is a great one – make homeownership affordable for public servants to help revitalize struggling communities. However, limited availability can make this program difficult to break into.

If you’re in need of home financing, you can get started online with Rocket Mortgage®.

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Great news about 2021 so far: Rates are still relatively low.

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Molly Grace

Molly Grace is a staff writer focusing on mortgages, personal finance and homeownership. She has a B.A. in journalism from Indiana University. You can follow her on Twitter @themollygrace.