Why is the FHA second mortgage signed in the Good Neighbor Next Door program?


The HUD/FHA second mortgage with the Good Neighbor Next Door program is signed to ensure that eligible buyers will occupy the home they purchased under the GNND for the entire 3-year occupancy period. This silent FHA second mortgage does not require any payments throughout the 3-year period.

Under the GNND program, the HUD/FHA second mortgage is applied to half the appraised value of the property; the remaining 50 percent can be financed with a conventional mortgage, through FHA or VA loan programs, cash, or as you like it. If you fail to abide by the 3-year occupancy rule, you will owe a part of the FHA second mortgage you signed when buying the GNND home.

Eligible participants of the Good Neighbor Next Door program are firefighters, medical professionals, teachers or law-enacting officers. Anybody entering the GNND program is required to sign an FHA second mortgage and note on the home. After the obligatory occupancy period, you can choose to sell the GNND house and keep any equity for yourself.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: