Good Neighbor Next Door Program

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What You Should Know

  • The Good Neighbor Next Door program allows qualifying individuals to receive a 50% discount on a qualifying home purchase.
  • Financing with this program may require a down payment as low as $100.
  • This program has significant limitations on what kind of house a person can buy.

What Is a Good Neighbor Next Door Program?


The Good Neighbor Next Door program is run by the US Department of Housing and Urban Development (HUD). This program allows qualifying individuals who work as teachers, law enforcement officers, firefighters, or emergency medical technicians, to receive a 50% discount on the price of a house if the individual commits to keep it as a primary residence for at least 36 months. In addition to that, there are lower limits for the down payment. Qualifying individuals may be able to finance a property with a down payment as low as $100. Even though the program sounds very good, it has very high limitations on the properties a person can choose from. It may be even the case that there are only a handful of properties available for purchase in a whole state.

Pros And Cons of a Good Neighbor Next Door Program
50% Discount on the House PriceSmall Choice of Houses
Low Down PaymentRequires Commitment
House AppreciationHighest Bidder Wins
Loan for Repairs Available

Not every house is eligible for this type of program. Only single-family homes that are located in revitalization areas are eligible for purchase with this program. When qualifying an area as a revitalization area, HUD looks at certain criteria such as low median household income, low homeownership rate, and a high foreclosure rate in the area. Most of the time, these properties are foreclosed properties that have been financed with FHA loans. Even though there are many revitalization areas across the US, there is a very limited number of homes that are eligible for purchase using a good neighbor next door program.

Who Qualifies for the Program?

An individual who wants to participate in a good neighbor next door program must meet certain criteria to be eligible. The first criteria are that they must have one of the following full-time jobs that serve the area where the house is located:

  • Law Enforcement Officer
  • Teacher or a School Employee
  • Firefighter
  • Emergency Medical Technician

A buyer must also not have purchased a house using this program before and must not have owned a property within one year before buying the property the house is bought. Additionally, a buyer must certify their intentions to keep working for the same job one for at least one year after buying a house.

How to Buy a House Using the Program?

The procedure for buying a house using the good neighbor next door program is different from buying a regular house mainly because the choice of the house is very restricted. It is important to note that this program allows qualifying individuals to essentially buy a foreclosed property, which can be risky. A buyer should work with an experienced real estate agent to make sure that the property is in habitable condition. The following steps may help a potential buyer to navigate through the buying process.

  1. Assess Eligibility

    The first step a buyer should take is to ensure that they are eligible for the program. A buyer should ensure that they have the job that is eligible for buying a good neighbor next door house in the area, they are planning to stay on the job for at least one year after buying the house, and they will be living in that house for at least 36 months.

  2. Get Pre-Approved for a Mortgage

    If a buyer needs a mortgage to pay for the property, it is important to get pre-approved before buying a house. The houses that are sold with this program are in foreclosure, and the sellers of foreclosed properties try to sell them as fast as possible. It is unlikely that the seller will wait for a better deal and instead sell the property to the first person who offers enough. A buyer can choose their loan, but if they want to purchase a house with a $100 down payment, they have to get an FHA loan.

  3. Search Through Available Properties

    The properties that are eligible for purchase through the good neighbor next door program can be found on the US Department of Housing and Urban Development website. It is important to adjust the search filter to match the buyer’s preferences.

  4. Pick a Desirable Property

    A buyer can click the listings to see more detailed information about the property. Before proceeding to the next step, a buyer should decide what property they want to proceed with. If there are no properties that are of interest, or there are no properties at all, the best strategy is to visit the website weekly because the list of good neighbor next door homes for sale is updated weekly.

  5. Find a HUD-Registered Real Estate Agent

    The houses that are sold are in foreclosure. These houses are sold as-is, so they may require quite a substantial amount of capital to make them habitable. A HUD-registered real estate agent who has worked with foreclosure properties may be able to identify the issues with the property and even estimate the amount of money required to fix it. After that, the agent submits a bid for the property at the full price, and the HUD contributes 50% to the price of the property.

Pros And Cons of the Program

Even though this program has very unique features, this program might not fit everyone. Before purchasing a property with this program, a buyer should consider the advantages and disadvantages that come with the program.


  • 50% Discount on the House Price

    The biggest advantage of a good neighbor next door program is that the government pays for half of the property price.

  • Low Down Payment

    Another pro of this program is the fact that it is possible to get a mortgage with a down payment as low as $100. Such a low down payment is only available if a buyer gets an FHA mortgage instead of any other one available. You can also finance buyer closing costs.

  • House Appreciation

    The program is created to help revitalize neighborhoods. This means that if the process of revitalization of a neighborhood is successful, then the value of the houses in the neighborhood will be much higher than before.

  • Loan for Repairs

    It is possible to get a loan for repairing the property because the properties sold with the program usually require substantial repairs. If the house is purchased with an FHA loan, it is possible to apply for an FHA 203(k) loan, which allows a borrower to get up to 110% of the house value to make upgrades.


  • Small Choice of Houses

    There are strict rules as to what house a buyer can purchase with this program. Apart from the choice being limited only to some areas, sometimes there may be no houses available in a given area. A buyer may wait for some time before they find a house they are willing to purchase.

  • Requires Commitment

    One of the requirements for people participating in the program is that they have to keep it as their primary residence for at least 36 months. This means that the buyer will have to live there for 3 years before moving somewhere else. In addition to that, the buyer has to stay in their current job for at least a year after purchasing a house with the program. If the buyer chooses to break the commitment, the buyer will have to pay back the discount the HUD provided.

  • Highest Bidder Wins

    The houses sold with this program are on auction sale. This means that the listing price does not necessarily reflect the price a house will be sold for. For some areas where a lot of competition is present, it might be difficult to purchase a home because other people may bid more.

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