Good Neighbor Next Door: half off a HUD home

How the Good Neighbor Next Door program works in Colorado

HUD sets aside certain homes in areas it has designated for revitalization. When one is listed, it enters a lottery period before the normal owner-occupant window. During that period only Good Neighbor Next Door buyers can bid, and if more than one qualified buyer submits, HUD picks by lottery rather than by price. The winner buys at 50% of HUD’s appraised value.

The discount is not free money on the day you close. HUD records a second mortgage on the home for the discounted amount, with no payments and no interest. Every month you live there, one thirty-sixth of it is forgiven. After 36 months it is gone. If you sell or move out before then, you repay the unforgiven part.

Who qualifies

• Teachers. Full-time, pre-kindergarten through 12th grade, at a public, private or charter school that serves the area where the home is.
• Law enforcement. Full-time sworn officers with arrest powers, employed by a federal, state, county or municipal agency serving the area.
• Firefighters and EMTs. Full-time, employed by a fire department or emergency medical services responder unit serving the area.

You also have to be an owner-occupant, not currently own another home, and not have bought a home through this program before. Your household can include other people; the qualifying job just has to be yours.

Financing a Good Neighbor Next Door HUD home

You can use any financing you qualify for. Most buyers use FHA, and if you do, HUD only requires a $100 down payment on a Good Neighbor Next Door purchase. Your loan is for the discounted price, so a $400,000 home becomes a $200,000 mortgage plus the silent second. Financing a HUD home covers FHA, 203(k) and the rest.

Officer Next Door, Teacher Next Door: the old names for the same program

If you searched “Officer Next Door” or “Teacher Next Door,” you are in the right place. HUD ran those as two separate programs until 2006, then folded them into Good Neighbor Next Door and added firefighters and EMTs. The deal is the one people remember: 50% off the list price of an eligible HUD home in a revitalization area, in exchange for living there for 36 months.

Two things changed since the Officer Next Door days. The pool of eligible homes is smaller, because only HUD homes in designated revitalization areas qualify, and Colorado has few of them at any given time. And when more than one eligible buyer bids it is a lottery, not first come, first served.

“HUD homes Good Neighbor” listings show up on HUDHomeStore with a special flag and are open to program buyers for seven days. We check the list every morning; if one appears in your area, you hear about it the same day.

Where the eligible homes are in Colorado

Revitalization areas are set by HUD, not by us, and they change. In metro Denver they have historically included parts of Aurora, Commerce City, northeast Denver and a few older suburban pockets. There is no separate list to browse; eligible homes show up on hudhomestore.gov flagged for the program, usually a handful in the whole state at once. Where Good Neighbor Next Door homes turn up in metro Denver goes deeper on the geography.

The honest catch

• Inventory is thin. Some months there are none in Colorado at all. This is a program you watch and wait for, not one you shop.
• The house is still as-is. Half price on a home that needs a roof and a furnace is still a home that needs a roof and a furnace. Inspect it like you are paying full price.
• Three years is three years. A job transfer in year two costs you a third of the discount. Be sure before you sign.
• It is a lottery. Being qualified and being first does not win. Being drawn wins.

How to enter

1. Call or text 303-955-4220 and tell us your job and where you work. We will tell you straight whether you qualify.
2. Get pre-approved for the full price, not the discounted one. HUD wants to see you could carry it either way.
3. We watch the site and enter you the day an eligible home appears. Only a HUD-registered agent can submit the lottery bid.

Where to go next

• Understanding Good Neighbor Next Door in Denver
• How to buy a HUD home
• How HUD bidding works
• Inspecting an as-is HUD home
• Other Denver homebuyer assistance programs
• Find a HUD-registered agent
• Colorado first-time buyer programs on our main site
• Search current HUD listings

Ready to talk to someone?

Call or text 303-955-4220. A live person answers. Tell us what you are working with and we will tell you honestly whether a HUD home is the way to get there.