Hi this is Chi at The Chi Team
and welcome to another episode of HChiTV. Today we're gonna talk about the good
neighbor next door program from HUD. This program is specifically targeted for
people who work as a teacher, firefighter, police officer, or EMT / emergency
medical technician. You have to be in one of these professions to buy one of these good neighbor next door homes from HUD. We'll talk about, right now, of how to
purchase one of them. So besides being a police
officer, teacher, firefighter, or EMT, 1 of the main requirements for you to
purchase one of these homes is that you have to be a first-time home buyer. This
program is geared towards people who have never owned a home before. Or there is a loophole is that if you owned a home before, you cannot own it now. You
cannot own a now for at least 12 months to qualify for the good neighbor
next door program.
The next step is that you have to borrow money from a lender. You have to get pre-qualified with a lender to purchase
one of these homes. They have to look at your credit score and your debt to
income ratio. Some of you, probably most of you, have student loans so
they have to consider those as part of your debt to income ratio. We have to
get pre-qualified to make sure that you can borrow money to purchase one of
these homes. These HUD homes are in the lottery system. Everyone who is
a teacher, firefighter, police officer, or EMT, have an equal chance of winning the
property. HUD sets the price for these homes. So let's say that the house
is listed for $150,00,0 no one can bid any higher or lower.
bidding the same price point. So if it's 10 people submitting an offer then there is a 1/10 chance in winning the bid. If it's 2 people then you
have 50-50 chance of winning. It's a true lottery system. These HUD homes are
foreclosed so these homes are sold as is so HUD
is not going to make any repairs to the property. You can inspect the
property either before or after, most likely after you win the property, but
HUD will not make any repairs. For these properties it is up to you after
settlement to repair or update the property.
The main reason
why you want to buy one of these HUD Homes, Good Neighbor Next Door, is
HUD is going to give the buyer a grant for half of the purchase price
of the home. An example, a $150,000 listing, HUD is going to give you, the buyer,
$75,000 at settlement. In essence you're buying the house at of half the price you will have to borrow, the lender is going to lend you money, a
little bit over half the price of a home to cover closing costs and commissions.
The key in one of these properties, again, HUD is going to give
you a grant for half the purchase price of the home. When HUD gives you that much money for one of these houses, one of the main rules is that you have have to live at the property for at least three
years.You can try to sell it but you have to pay back the
grant. For you to not pay back the grant you have to live there for at
least three years.
After three years you get notifications from HUD asking if
you are still living at the property and that grant for half the price of home will go away. So in essence you will have instant equity on your home
after three years and that is a key into buying one of these good neighbor
next door properties. Now, after that you can sell you home get the equity out to
put a huge down payment on your next home or you can keep it as an
investment property and rent it out for a good amount of rent and get rental
income coming in.
That is the key to how to make money and get a lot of equity
from one of these good neighbor next door homes. Once again, if you
yourself or anyone you know is a teacher, firefighter, police officer, or EMT, you can
qualify to buy one these good neighbor next door homes and if you're interested
you can contact me directly at 410-303-6197. I look forward to hearing from you.
Thank you for watching. We'll see you next time..