Good Neighbor Next Door program (GNND) offers homes at half price
TUESDAY, 28 SEPTEMBER 2010 By Elizabeth Martinez
Miami, FL- With the current market situation, and since the bursting of the mortgage bubble, foreclosure sales are attracting many buyers. Special deals like the one offered by the Good Neighbor Next Door program (GNND) is one that has received much attention.
Under the Federal Housing Administration (FHA) Good Neighbor Next Door program (GNND), homes are being sold at half price. This program is exclusively for buyers who are teachers, law enforcement officers, firefighters and emergency medical technicians, or EMTs. The homes being sold were insured by the FHA and foreclosed on. Now, the Department of Housing and Urban Development is selling them at half price.
However, there is more to take into consideration when you apply for this program. Buyers who meet the professional requirements must be willing to live in the neighborhoods where this program is being offered. For example, if a buyer is a firefighters or EMT, he or she must serve in the jurisdiction where the house is located in order to qualify. Similarly, teachers must teach at a school in the neighborhood boundary of where the house is located.
Once the buyer has met all of those requirements, the buyer then pays half the appraised value as determined by HUD. The other half which is the discounted half is taken as a "silent second" mortgage, with no principal or interest payments. If the house becomes the buyer’s primary residence for at least three years, then the buyer is forgiven from paying the silent second mortgage at the end of that time period. The owner may then keep the house or sell it and keep any profit. Payment of the first half can be made in cash, or the buyer can even borrow some or all of one-half of the purchase price.
The neighborhoods covered by this program are what the FHA calls "revitalization areas." These neighborhoods offer a combination of low household incomes, low homeownership rate and high number of foreclosures of FHA-insured properties. Therefore, these areas are not necessarily ideal, and they need fixing up.
According to the Department of Housing and Urban Development, 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."
Reprinted courtesy of Mortage Lending News: http://www.mortgagelendingnews.com/top-news/11774-good-neighbor-next-door-program-gnnd-offers-homes-at-half-price
