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Delaware FHA Good Neighbor Next Door Loan Program

John Thomas July 25, 2013 Tags: , , , ,
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Delaware FHA Good Neighbor Next Door (GNND) is the new name for an old FHA Loan Program.  Most of you may know it as the Delaware Teacher Next Door Program or Delaware Officer Next Door Program.  In 2005 HUD changed the program to include firefighters and emergency medical technicians (EMTs).

If you would like to apply for the Good Neighbor Next Door Program, please give us a call at 302-703-0727 or apply online

FHAupdate

Highlights of the Delaware Good Neighbor Next Door Program:

  • Specifically for designated HUD homes in revitalization areas
  • $100 down
  • 50% discount (provided by HUD as a silent second mortgage)
  • Silent second mortgage released after buyer occupies as a primary residence for 36 months
  • Active Duty Military Deployment is not considered an occupancy violation
  • All equity/profit is a buyer’s after an initial 36-month period (Silent Second Mortgage Forgiven!)
  • HUD doesn’t pay closing costs, prepaids, or selling agent commission; however, ALL can be rolled into new FHA loan
  • Bid MUST be submitted by registered HUD Real Estate Agent

Eligible borrowers are:

  • Law enforcement officers with arrest powers not limited to geographic area (Example:  Military police with arrest powers limited to a military base are not eligible.)
  • Pre-K through 12th-grade teachers
  • Firefighters and/or EMTs

Additional borrower criteria:

  • Teachers, firefighters, and EMTs must be employed by an entity that serves the area where the home is located.
  • The borrower does not have to be a first-time home buyer; however, neither the borrower nor their spouse can have owned residential real estate in the previous year from the date of the bid.
  • Neither borrower nor their spouse can have previously purchased a home through the GNND program.

The FHA Good Neighbor Next Door Program can also be used with a Delaware FHA 203k Rehab Loan for HUD properties that require repairs.  The 203k Loan will allow the borrower to the borrower the money to purchase the home and fix it up all in one loan.

But what happens if the homeowner has to leave temporarily?

Are they now on the hook for that additional 50% of the purchase price?  Maybe not.

Interruptions in the 36-month mandatory occupancy term may be allowed for hardship circumstances if the request is made in writing to HUD. The request must include:

  • The reason(s) why the interruption is necessary;
  • The dates of the intended interruption; and
  • A certification that:
    • The GNND program participant is not abandoning the home as his/her permanent residence; and
    • The GNND program participant will resume occupancy of the home upon the conclusion of the interruption and complete the remainder of the 36-month owner-occupancy term.

The written request for approval of an interruption of the owner-occupancy term must be submitted to HUD’s contractor at least 30 calendar days before the anticipated interruption. Eligible GNND program participants who are also military service members protected by the Service members Civil Relief Act (SCRA) need not submit their written request to HUD 30 days in advance of an anticipated interruption but should submit their written request as soon as practical upon learning of a potential interruption.

HUD’s contractor that would consider these requests is:

DEVAL, LLC
Westpoint 1
1255 Corporate Drive, Suite 300
Irving, TX 75038
(877) 622-8525 (toll free)
(469) 647-4450 (local)
(469) 647-4451 (fax)

If you would like to apply for an FHA Loan or the Good Neighbor Next Door Program, please give us a call for a mortgage planning appointment or APPLY ONLINE.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713

About John Thomas

John Thomas and his team are long-time Delaware natives. They know the local real estate market as well as they know the loan products that help them serve it. Dedicated to helping first-time buyers; the John Thomas Team are experts on first-time buyer loan programs (FHA, VA, USDA) and conduct monthly first-time buyer seminars that have been attended by more than 3000 Delaware buyers.

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