Who this is for
- Full-time teachers (pre-K through 12) buying in their school’s service area
- Full-time law enforcement officers employed by a government agency
- Full-time firefighters and EMTs employed by a fire department or EMS unit
- Eligible buyers comfortable with a 3-year occupancy commitment
Typical HUD Good Neighbor Next Door requirements
| Discount | 50% off HUD’s list price |
|---|---|
| Down payment | $100 minimum |
| Occupancy | Must live in the home 3 years as sole residence |
| Earnest money | Typically 1% of list price (varies) |
| Service area | Home must be in the revitalization area you serve |
| Second mortgage | The 50% discount is a silent second, forgiven after 3 years |
Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.
How it works
- Confirm you are full-time in an eligible role: teacher, police officer, firefighter, or EMT.
- Search HUD Home Store for Good Neighbor Next Door eligible listings in your service area.
- Bid during the 7-day GNND exclusive listing period (before investors can bid).
- Finance with FHA (203k for repairs if needed), conventional, VA, or cash, the $100 down is the GNND minimum, lender rules still apply.
- At closing, HUD records a silent second mortgage for the discount amount, no payments, no interest.
- Live in the home 3 years; the second mortgage is forgiven 1/36th per month. Sell or move early and you repay the prorated balance.
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Pros and cons
Advantages
- 50% discount is unmatched by any other homebuyer program
- $100 down payment minimum
- Silent second with no payments, forgiven over 3 years
- Can combine with FHA 203k to finance repairs
Trade-offs
- Eligible inventory is scarce and varies wildly by market
- Homes are sold as-is, many need significant work
- 3-year occupancy lock with prorated repayment if you leave early
- 7-day exclusive bidding window is competitive when listings appear
Documents you’ll need
- Proof of full-time eligible employment
- Employer verification in the service area
- Standard FHA/conventional loan documents
- Earnest money deposit
HUD Good Neighbor Next Door FAQ
Who qualifies as a "teacher" for GNND?
Full-time teachers (pre-K through grade 12) employed by a state-accredited public or private school serving students from the area where the home is located. Administrators generally do not qualify, classroom role matters.
What happens if I move before 3 years?
The silent second mortgage is forgiven proportionally (1/36 per month of occupancy). Leave after 18 months and you would owe roughly half the discount amount back to HUD.
Can I use an FHA 203k with Good Neighbor Next Door?
Yes, this is a common combination: GNND for the 50% acquisition discount, 203k to finance the repairs these as-is homes often need.
How do I find eligible homes?
HUD lists GNND-eligible properties on the HUD Home Store during a 7-day exclusive period for eligible buyers. Inventory is the constraint, set up alerts and check frequently.
Do firefighters and EMTs really qualify?
Yes, full-time firefighters and EMTs employed by a fire department or EMS unit qualify, along with teachers and law enforcement officers.
Can I buy a GNND home as an investment?
No, it must be your sole residence for 3 years. Investors cannot use this program.
What is the $100 down payment about?
GNND allows a $100 minimum down payment, but your lender’s program rules still apply. FHA will still want its 3.5%, the $100 is the GNND program minimum.
Are GNND homes in good condition?
Usually not. They are HUD-owned foreclosures sold as-is, and many need significant repairs. That is why the 50% discount exists.
Can I sell before 3 years in an emergency?
You can, but you repay the prorated silent second. After 18 months, you would owe roughly half the discount back to HUD.
Official sources
How HUD Good Neighbor Next Door compares
| HUD Good Neighbor Next Door | FHA Loans | FHA 203(k) Renovation Loans | First-Time Homebuyer Loans | |
|---|---|---|---|---|
| Best for | Full-time teachers (pre-K through 12) buying in their school’s service area | First-time buyers | Buyers of fixer-uppers who will live in the home | Renters ready to buy |
| Down payment | $100 minimum | , | 3.5% of purchase price plus repair costs | 0% VA, 3% conventional, 3.5% FHA |
| Credit | , | 580 for 3.5% down; 500–579 with 10% down | 580 under FHA rules; lenders often want 620+ | , |
| Income docs | , | , | , | , |
Typical ranges, your Loan Estimate or term sheet confirms actual terms.
Coming soon: a 2-minute walkthrough from our loan team.
Related programs
FHA Loans
An FHA loan is a government-insured mortgage that allows 3.5% down with a credit score of 580 or higher, or 10% down with a score from 500 to 579.
FHA 203(k) Renovation Loans
An FHA 203(k) loan finances both the purchase (or refinance) of a home and the cost of repairing it in a single FHA-insured mortgage, with as little as 3.5% down.
First-Time Homebuyer Loans
First-time homebuyer loans are mortgage options with low down payments, typically 3% conventional, 3.5% FHA or $0 VA, often paired with state or local down payment assistance.