Good Neighbor Next Door

A little­ known program sponsored by the Department of Housing and Urban Development allows police officers, teachers, firefighters and emergency medical technicians to buy certain homes for half price. But financing these purchases comes with some strings attached. Called Good Neighbor Next Door, this program deeply discounts foreclosure properties in areas designated as in need of revitalization. The homes are owned by HUD and first offered only to full ­time educators and emergency responders who serve these areas.

In return, the workers must agree to live in the home for at least three years. To be eligible, buyers may not own any other residential property or have owned a home within the previous year. Although the home price is halved, buyers must still be able to qualify for a loan equal to the full price, said John Zubretsky Jr., the owner/­broker of Weichert Realtors, the Zubretsky Group in Wethersfield, Conn. The loan amount, though, will be only for the discounted price, said Mr. Zubretsky, a specialist in HUD properties. But in order to make the buyers accountable for the three­ year commitment, HUD also requires that they sign a “silent second” mortgage for the amount that the property was discounted. No interest or payments are required on this loan as long as the buyer lives in the home for at least 36 months. “That second note gets ripped up after three years,” said Kevin Kelly, a local listing broker for HUD homes in the Buffalo area.

Source: The New York Times