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How to Buy a House for Half Price

How to Buy a House for Half Price

Want to get HALF OFF the biggest purchase of your lifetime? Who wouldn’t?! The US Department of Housing and Urban Development (HUD) offers the Good Neighbor Next Door program for qualifying buyers who work as law enforcement officers, PK-12th grade teachers, firefighters and emergency medical technicians (EMT) who help revitalize certain communities.

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Looking for other low income home buyer options? Click here!

What is the HUD?

The US Department of Housing and Urban Development (HUD) was established in 1965 to address housing needs within the United States. The goal of this agency is to develop and improve communities and housing for all Americans. They do this through a variety of programs, including low income housing initiatives and the Good Neighbor Next Door program.

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What is the Good Neighbor Next Door program?

The Good Neighbor Next Door program provides HALF OFF the home purchase of qualifying buyers who purchase homes in HUD-designated “revitalization areas.” With this program, you will get 50% off the HUD appraised value and your down payment may be just $100!

These areas are determined based on the average household income, home ownership rate and the FHA-insured mortgage foreclosure activity. It is believed that by expanding home ownership opportunities, these communities will be strengthened and improved.

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The only catch? You have to be a law enforcement officer, PK-12th grade teacher, firefighter or emergency medical technician (EMT) and you cannot own any other real estate. You also have to live in the home for three years (36 months) as your only residence. That’s it!

Should I use the Good Neighbor Next Door program?

The Good Neighbor Next Door program is an excellent way to save a lot of money on your home purchase. A house is the most expensive purchase most people make in their lifetimes, so a 50% discount is a pretty sweet deal! Also, you could move in with just a $100 down payment.

However, there are some reasons you may not want to consider the Good Neighbor Next Door program.

The biggest problem is that there’s a limited supply of eligible homes and they are located in specific areas. If location is important to you and you definitely want to live in a certain city or state, this program may not be a good fit for you.

In order to participate in the program, you cannot own any other real estate and you cannot have owned any real estate within the previous 12 months. If you are a current or recent homeowner, this program is not for you.

How does the program work?

You can find the current list of available homes on the HUD website.  I recommend using the map instead of the search feature. The map clearly colors the states where homes are available, making it easy to identify areas where homes are available. At the time of this writing (Jan 3, 2018), there are homes available in Kansas, Maryland, Michigan, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania and Texas.

As you search for homes, remember that you will pay just half of the HUD’s listing price. If you qualify for a FHA-insured mortgage, your down payment will be just $100 and you can finance your closing costs. You will, however, be expected to pay between $500 and $2,000 in earnest money (usually 1% of the home’s list price).

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When you purchase your home through this program, you will obtain two mortgages. The first mortgage can be any type you choose, such as a FHA, VA or conventional mortgage. This is the mortgage you will pay every month.

The second mortgage is a “silent second” from HUD. You will not pay on it and it will not accrue interest. As long as you live in the home for three years (36 months), this second mortgage will disappear. However, if you do not stay the entire three years, you will have to pay a pro-rated portion of this second mortgage back to HUD.

You will have 30, 90 or 180 days to move into your home, depending on the level of repairs required. Because some of these homes do require repair, you may want to consider a FHA loan that allows you to include the cost of repairs in your mortgage.

What happens if I leave or lose my job?

If you leave the employment that made you eligible for this program, nothing happens. The original terms still apply and you must live in the home for 36 months or you will have to repay the prorated amount of the silent second mortgage back to HUD.

However, when you apply for the program, you must certify that you intend to remain employed in an eligible field for at least one year following your home purchase. You should not willfully leave your employment before you have fulfilled that obligation.

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What happens when I sell the house?

As long as you’ve lived there for three years, you can sell the home and keep any equity or profit you receive from the sale of your home! Since you only paid half the home’s cost, there could be a hefty profit involved.

However, if you sell the home before the three year period, you will be required to repay a pro-rated amount of the “silent second” HUD mortgage. The amount you will owe can be determined by dividing the second HUD loan by 36. That’s the monthly amount. Multiply that by the amount of months you have left on your 36 month obligation to find out how much you will owe HUD if you leave.

The only exception to this is if the homeowner is called to active military duty. In this case, the homeowner does not have to occupy the home and may rent it out until they return.

 

Looking for more ways to save money and get free stuff?

We can help with that!

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Have too much month at the end of your money? Me too - and that's how Low Income Relief got started. I have over 20 years of professional research and writing experience. Over the years, I've worked as a novelist, journalist, ghostwriter and content creator. My work has been featured in various print and online publications, including USA Today, eHow.com, Livestrong.com, Legal Beagle, The Daily Herald (Provo, Utah), The Chronicle (Centralia, WA) and others. At Low Income Relief, I use my professional research and reporting experience to help low income families save money and make ends meet. It's been my full-time job since 2016, and it's truly an honor to serve you.

Monica

Sunday 30th of May 2021

Hello Nicole, My name is Monica I’m 58yrs old & my husband Trino is 66. We were Married on 12-31-88, just recently my husband underwent A Colonoscopy reversal on 4-14-21 @ Kaiser. This surgery went very well according to his surgeon & was expected to be home in2day. Unfortunately 12Days later My husband was released on his 66th Birthday (AGAINST My Request).., To return back to Kaiser ER (LESS than 3Hrs Later In SHOCK & Filled with CEPSIS)... My husband was wheeled into the Surgery [email protected]:55am on 4-27-21 , By myself & Our Eldest Son To perform A Emergency Surgery... @2am I received a phone call In the waiting room by A Nurse telling me that my husband had just been wheeled into Surgery, I ask why did it take so long to start his (Emergency Surgery)?? She said to me that it took longer than expected to ..PREP MR. Ramirez.., 2&1/2 hrs. Later At 4:30am Both surgens come out to tell me that They did there best on Mr. Ramirez, that the CEPSIS got into his BLOOD causing His vital organs to stop/shut down, So to Complete the Emergency Surgery Mr.Ramirez had2 be on put on Life Support to clean out all the CEPSIS from his body., The Nxt 24/72 Hrs. Are Vital.. He is in ICU on A Ventilator & Will have2 FIGHT & Come Back. The Original Surgen from Trino’s 1st.surgery on 4-14, said that he’s never seen this happen B4. When he completed the Ostomy Reversal all Blood Arteries to the LARGE intestines SMALL intestines & COLON were Working fine/ when the EMERGENCY Surgery Took place 12Days Later The Arteries to the LARGE Intestines & COLON ...“DIED Causing NO BLOOD flow 2These Organs. Now REWINDING to 4-14 1st. Surgery// To the day of his release ( Trino’s ABDOMIN grew to LOOK Like he was 9months Pregnant), All along from 4-14 THROUGH 4-25 His DR. & Nurses were Telling US that his Intestines were full of AIR/ GAS, And that Mr. Ramirez Needed to Walk More... Mind You Mr. Ramirez was all ready struggling with Breathing because (His DYING Large intestines) were Pushing up into his Lung Area... { though this condition was not known yet}.., Mr.Ramirez Continued Circling the hole 4th floor with his walker to help hold him up, I was on his side pushing his IV’s Attached to him. On 4-25 The day B4 Trino was released / I requested the Dr. on duty to Order an EXRAY of my husband’s Abdomen “ Her Response to me was If it will make You Happy “... then I will! I Daid YES IT Will!! EXRAY came back showing FLUID around Trino’s INTESTINES... So The Floor Dr. decided to keep Trino one more day & Released him the next day on his Birthday, WITHOUT Doing A CT-SCAN!! Trino & I were EVICTED from our rental of 5+yrs. On 4-1-21 (Just 13days B4 ) Trino’s scheduled Surgery, Due to COVID-19. The Owner of our rental had LOST his job in December 2020., and told us that he had to sell his home. We ... Trino & I moved into our sons 29foot Trailer on the side of his property, Since my husband’s 2 SURGURIES.. we can no longer live in the trailer My husband is in a hospital bed receiving In home physical therapy Temporarily at our Daughters Home because He refused to go into a rehabilitation home after all that has happened to him. He’s filled with Fear & Dosent trust them. We are Desperately Praying / Needing A home of our own to recoup & spend the rest of our Marriage together “What’s Left Of It”..? Can/Would You Please Help

Hannah Benge

Monday 31st of May 2021

You have been through so much! I'm so sorry! Here is some help for low income housing https://lowincomerelief.com/affordable-income-based-housing/. -Hannah