Creating More Good Neighbors Locally

A little-known HUD program for community-service workers offers steep savings on homes, according to Carrington Real Estate Services REALTOR® Laura Key

Jul 09, 2015, 10:02 ET from Carrington Real Estate Services

LONG BEACH, Calif., July 9, 2015 /PRNewswire/ -- Real estate agent Laura Key wants to help give back to the people who serve our communities. Teachers, firefighters, police officers and emergency medical technicians (EMTs) all work to make our communities better — frequently for little pay and often at great risk to themselves. Key, a REALTOR® with Carrington Real Estate Services in Long Beach, wants these workers to know about the U.S. Department of Housing and Urban Development (HUD) program that attempts to reward them for their service.

The Good Neighbor Next Door program is specifically for law-enforcement officers, firefighters, EMTs and pre-kindergarten through 12th grade teachers. Through this program, select HUD homes can be purchased for 50 percent off of the list price by these community-service workers that meet the program's eligibility requirements. In return, they must live in the house for three years as their sole residence. These homes are offered in HUD-designated revitalization areas, which often are in large urban centers like Los Angeles, Baltimore or Phoenix. Although they do not have to be first-time homebuyers, potential buyers and their spouses cannot have owned a home in the 12 months prior to purchasing a Good Neighbor home.

But if community-service workers aren't aware of the program, how can they reap the rewards? Key has been working with the Good Neighbor program for nearly 10 years, and when she reaches out to community-service workers, she finds that most have never heard of it. "It is really important for the public to at least know that this program is available," Key says. "It seems like nowadays we don't help the people who are vital to our community -- the people who take care of and educate our children, who take care of our community and often risk their lives. This program has a special place in my heart because I believe it builds community."

Although Key currently works in the Los Angeles area, she previously worked in Denver. In both places, she reached out to community-service workers to educate them about the Good Neighbor Next Door program. Because potential homebuyers must live in the district in which they work, Key has found the most success with teachers. "Law enforcement officers generally don't like to live where they serve for protection purposes," Key says. "Teachers don't mind living in the district that they serve because they know the kids." In fact, after just a few months of reaching out to various schools in the L.A. area, she already has identified 30 to 35 prospective buyers. "I've seen more interest in L.A. because housing here is so difficult, period. It's just really tough to get a home," Key says.

There is demand, but supplies are very limited.  At any given time, HUD may only offer three or four listings across the entire country. So when a listing does go up, it goes fast. Key makes it a habit to check HUD's listings twice a day, because these homes are not put on the local Multiple Listing Service (MLS), which many real estate agents and websites utilize to identify properties available for sale. "There is no logic to where, how much, what condition, what area," Key says. Homes can need massive rehabilitation, or nearly none at all. They can put up two listings in one month, or two months can go by without a single listing. "Buyers interested in the program need to be both patient and ready to go at all times," Key says.

A program like this can be particularly beneficial in competitive markets like Los Angeles. "Most of these homes are $300,000 or less in L.A., and that's almost impossible to get in a regular program here," Key says. By owning and living in areas in need of revitalization, buyers get the benefit of a home at a steep discount, as well as the value of becoming an experienced homeowner in a market where entry can be tough.

Once offered by HUD, potential homebuyers enter a lottery system for the home; all bids are the same, so there's no competing amounts. Although it is a lottery system, the fact that all bids are asking price offers significant advantages, as well. There's no chance that another buyer can swoop in and get the home with a larger offer, and buyers cannot overbid for a property — both concerns in competitive markets like L.A. and other urban areas.

If a buyer wins the contract, they then purchase the home with both a first and a second mortgage. The second is "silent," and no interest or payments are required if the buyer completes the three-year occupancy requirement. The first mortgage covers all fees and commissions, any rehabilitation costs the buyer may need, and 50 percent of the list price. Prequalification for the full amount of the mortgage is key, because if buyers fail to complete the three-year occupancy requirement, they are responsible for the full loan. HUD is strict about its guidelines for this program and will check that buyers are actually living in the home. But once buyers fulfill their three-year obligation, the second mortgage is gone, and they are free to sell the home and keep any resulting equity or profits.

There are further rules and guidelines to take into account, so interested community-service workers should make sure they are working with an agent who is familiar with the program. "There are a lot of real estate agents who don't want to deal with it because the program is kind of hard to work, but once you know it, you know it inside and out," Key says. For real estate agents filling out the required contracts, it can be a bit daunting for the inexperienced. "It's government paperwork, it's not your traditional state contracts," Key says. "And if they are not filled out correctly, you can lose the contract." Key makes it a point to be in contact with her local HUD office and frequently checks in — both in person and online — to stay abreast of changing guidelines.

With limited supply, interested buyers should be sure to work with real estate agents experienced with the program who can increase their chances at coming away with a home at a steep discount. In her nearly 10 years of working with the Good Neighbor Next Door program, Key has seen interest grow, thanks in part to her own outreach efforts. "I would like to see more growth with HUD," she says. "This really is such a wonderful program, and I believe that these community-service workers deserve to be helped, because they help the community out of the goodness of their hearts."

To learn more about the Good Neighbor Next Door program, visit To find currently listed homes, check out the HUD Homestore.

Media Contact:
Christine Stricker
Office: (949) 517-7313
Mobile: (714) 873-4275 

Photo -

Logo -


SOURCE Carrington Real Estate Services