I don’t typically post about products very often but this morning I thought it might be a good idea to give out some information about a program that is underutilized in our area, the Good Neighbor Next Door loan or GNND for short. GNND loans are only available to EMTs, teachers, police and firefighters and are restricted to specific HUD foreclosures that have been selected for the program of which there are admittedly few. How’s that for a combination of lengthy sentence, strange acronyms and industry jargon? Growing up I remember reading a novel by Charles Dickens and getting completely lost amidst multiple semi-colons and whatever else he threw into a sentence that stretched for an entire page. How on earth is anyone supposed to learn anything from a sentence that has aspirations to take over the world?
When I was thinking of a title to this morning’s blog, the question was simple enough – are you cut out to be a good neighbor? I was trying to do a play on words but the question made me think about a few things. It’s interesting how programs like this wax and wane with good and bad markets. For this program, the home has to have been foreclosed on and given back to FHA. From roughly 2002 to 2008 FHA had a lot of competition from other loan programs and as a result, there weren’t a large number of FHA loans being done. From 2008 to the present time it’s been a completely different story. At one point, FHA loans were roughly 40% of the market for loans. Wow. As a result of the last three years, we are going to continue to see more FHA foreclosures and more properties will be eligible for the GNND program.
With the GNND program, eligible Borrowers are able to purchase select properties for 50% of the sales price. HUD holds a “silent” second mortgage for 50% of the sales price and this debt is forgiven as long as the homeowner lives in the property for at least three years. Closing costs are financed into the mortgage and the minimum investment into the program is a whopping $100. It really is an amazing program.
Unlike a lot of programs that are out there, the level of expertise on the part of the Loan Officer and Realtor for the GNND purchase is truly crucial. There are more details involved in this program than the instructions for that 10 speed your Uncle put together for his bratty kid last Christmas. If you would like more information about the GNND program, please check in with either myself or Ed Eggling at Oregon Realty at 503 310-8978. Ed has been involved with GNND transactions for a long time and is very experienced and knowledgable.
So are you cut out to be a good neighbor? Employment eligibility? Check. House eligibility? Check. Right team to put it all together? Check – just give Ed or myself a call.