Massachusetts Home Buyer Guide

The United States Department of Housing and Urban Development (HUD) recently rolled out a new program designed to revitalize certain targeted geographic areas.  Through HUD’s Good Neighbor Next Door program, certain Massachusetts homebuyers can purchase a HUD-owned property for a 50 percent discount on the list price of the home.

HUD wants to encourage first responders and teachers to purchase homes in communities that it wants to revitalize. The majority of these homes are foreclosed properties. The following are the details about who is eligible for the program, according to the HUD Web site. 

Law Enforcement: You may participate in the Good Neighbor Next Door program as a law enforcement officer, if you are employed full-time by a law enforcement agency of the federal government, a state, a unit of general local government, or an Indian tribal government; and, in carrying out such full-time employment, you are sworn to uphold, and make arrests for violations of, federal, state, tribal, county, township, or municipal laws.

Teachers: You may participate in the Good Neighbor Next Door program as a teacher, if you are employed as a full-time teacher by a state-accredited public school or private school that provides direct services to students in grades pre-kindergarten through 12th grade. In addition the public or private school where you are employed as a teacher must serve students from the area where the home you are purchasing is located.

Firefighters & Emergency Medical Technicians: You may participate in the Good Neighbor Next Door program as a firefighter and /or emergency medical technician, if you are employed full-time as a firefighter or emergency medical technician by a fire department or emergency medical services responder unit of the federal government, a state, unit of general local government, or an Indian tribal government serving the area where the home is located. 

The homebuyer must purchase a home in HUD designated revitalization areas. HUD has a Web site to search for homes in qualified revitalization areas.

The homebuyer must agree to live in the home for at least three (3) years and the buyers must not have owned any other residential property within the previous year.

The buyer purchases the property for 50 percent of the current list price.

The homebuyer must sign a “silent second” mortgage for the amount that the property was discounted. For example, for a $200,000 HUD-qualifying house, the purchase price would be $100,000 and there would be an additional mortgage of $100,000. The qualified homebuyer makes no interest and no principle payments on the second mortgage, as long as they live in the property as their primary residence for the first three years.  After the three-year period, the “silent second” mortgage is void.  If the homebuyer does have to move before the end of the three-year period, the buyer must repay HUD for the discounted amount of the savings on a prorated basis based on how long they lived at the property.

If multiple qualifying buyers come forward to purchase on a property, HUD will select the winner at random in a lottery. If no buyers come forward for a property, the home is then offered at full price to any buyer, as long as they agree to become an owner-occupant.

The Good Neighbor Next Door sales program will apply to qualifying HUD-owned homes for the first seven (7) days a property is on the market, then it is available to any residential homebuyer.