FHA Loan Financing for Good Neighbors (GNND)

FHA offers home loans “Good Neighbors Next Door” program (GNND Program) for qualified civil servants like firefighters, police officers and teachers.

The Federal Housing Administration offers affordable financing to qualified firefighters, emergency medical technicians, police officers and teachers (pre-K Grade12) who wish to purchase a home. This program is offered by HUD under Good Neighbors Next-Door Program (GNND).

This program works in two ways. First of all it helps the FHA dispose of the single property homes (Real Estate Owned Properties – REO) that they acquire through the defaults by the FHA home owners and secondly it helps the growth of neighborhoods that require enhancement and inception of responsible citizens by providing affordable housing to “good neighbors” such as firefighters, police officers and teachers.

How GNND Program Works

1) When owners of FHA loans default, the lender submits the title of the property with the FHA to be reimbursed for the remaining amount on the mortgage. After the claim from the lender is settles, FHA makes the necessary repairs on the home and takes on the title of the property. The property then comes in the ownership of the FHA and is known as Real Estate Owned Property or REO. This property is then put up for sale of the FHA through its network of approved mortgage brokers. The FHA also makes some of these properties in certain areas available to qualified firefighters, police officers and teachers at a discount. This helps the FHA reduce its mounting inventory of REOs and provides impetus to growing neighborhoods by inculcating responsible citizens and “good neighbors”.

2) The homes eligible for Good Neighbors Next Door program can be found through local real estate professionals and FHA approved mortgage lenders.

3) Eligible public service employees can purchase forms under the GNND program at prices up to 50% less than the listed prices with extremely favorable interest rates and terms.

4) The mortgage payment on the home purchased under the GNND program are essentially very low. The borrowers are also required to sign on a second silent mortgage which covers the discounted amount of the mortgage. This mortgage is not payable to the time that the home is sold or borrow or otherwise retires the first mortgage or vacates the property purchased through the GNND program.