The U. S. Department of Housing and Urban Development (HUD) wants to make American communities stronger and to build a safer nation. Public safety improves when police officers live in a neighborhood. The Officer Next Door (OND) program helps make this goal a reality by making homeownership faster and more affordable for Law Enforcement Officers.*
You must be a full-time, sworn law enforcement officer who is "employed full-time by a Federal, state, county or municipal government; or a public or private college or university." You must be "sworn to uphold, and make arrests for violations of, Federal, state, county, or municipal law." Your employer must certify that you are a full-time police officer with the general power of arrest. You don't have to be a first-time homebuyer to participate. However, you cannot own any other home at the time you close on your OND home. You must agree to live in the HUD home as your only residence for three years after you move into it.
The selected bidder may purchase the property at a 50 percent discount from the list price. For example, if a HUD home is listed for $100,000, an officer can buy it for $50,000. To make a HUD home even more affordable, you may apply for an FHA-insured mortgage with a downpayment of only $100 and you may finance all closing costs.
If the home you want to purchase needs repairs, you may use FHA's 203(k) mortgage program. This program allows you to finance both the purchase of the home and the cost of needed repairs. You have the benefit of one loan for both costs and one monthly payment. Discuss these financing options with your lender.
Because homes sold through the OND program are located in Revitalization Areas there may be additional assistance from state or local government sources. Local or state governments want to encourage families and businesses to move into Revitalization Area neighborhoods. Contact your state government housing office or local municipal government and request information on assistance for homebuyers.
HUD's Officer Next Door program is a commitment to strengthen America's communities. The program offers HUD-owned, single family homes to law enforcement officers at 50 percent discount. It helps to prevent crime and promotes neighborhood safety and security by encouraging law enforcement officers to become homeowners and residents in economically distressed communities.
Since the program began in August 1997, more than 6,000 homes have been purchased in the next door program - almost tripling the initial goal. As a result, officers in the program are already making an important contribution to crime prevention and community revitalization.
Officers must live in the property as their sole residence for at least three years after purchase. A law enforcement officer who is employed full-time by a federal, state, county or municipal government and is sworn to uphold, and make arrests for violations of federal, state, county or municipal laws is eligible to participate in this program.
The following law enforcement groups announced their support of the Officer Next Door program today: National Fraternal Order of Police, International Association of Chiefs of Police, International Union of Police Associations, Federal Law Enforcement Officers Association, Major Cities Chiefs Association, National Organization of Black Law Enforcement Executives, Police Executive Research Forum, National Sheriff's Association, National Troopers Coalition, and the Police Foundation.
* - A Law Enforcement Officer participating in the OND program must grant HUD permission to confirm the Officer's place of employment, home of record, and telephone number.
(1) Q. Can an officer purchase a property at the 50% discount outside of the jurisdiction where he/she has authority to make an arrest?
A. Yes. Although it is desirable to have the officer buy within her/his jurisdiction, this is not a HUD requirement.
(2) Q. Is the officer eligible to receive any Real Estate Own sales incentives and/or bonuses?
A. Yes. However, the only sales incentive available under this program is the early closing bonus.
(3) Q. Can the officer wrap repair cost into their mortgage?
A. Yes, the contract sales price is the as-is value and the discount is calculated on the as-is value. The repair escrow is not deducted from the officer's discount, but may be financed as part of the loan.
(4) Q. Is this program restricted to first-time home buyers?
A. No, but the officer cannot own any other real property and the officer must reside in the HUD home as their primary residence during the owner-occupancy term.
(5) Q. Can we tie the Officer Next Door program into the revitalization zones or areas as defined by cities?
A. No. The Officer Next Door Program is designed to operate in HUD's revitalization and exception areas.
(6) Q. Does the $100 down payment apply only to 203(k) program?
A. No. The $100 down payment applies to all FHA-insured programs.
(7) Q. Is there a one time discount of 50 percent?
A. Yes. This is the discount for properties in revitalization areas.
(8) Q. Are all the properties within a revitalization area zip code part of the revitalization area?
A. It depends. It is up to the local HUD field office to determine if only certain neighborhoods within a zip code area meet the revitalization area definition.
(9) Q. Will it be up to the HUD office to devise a system to inform officers of available property?
A. Yes. Officers should tell the HUD office which areas are of interest to them.
(10) Q. Will the officer be offered the property before interested non-profit organizations or government agencies?
A. No. The list of available properties should be made available simultaneously.
(11) Q. If non-profits, city agencies, and officers get the list of available properties at the same time, who has priority?
A. The first acceptable sales offer received has priority. The field office establishes the procedures for what constitutes an acceptable offer.
(12) Q. How will the officer be able to obtain a HUD key to enter the property?
A. Keys are available at our office in Queens at 10703 Rockaway Blvd Ozone Park, NY 11417 during business hours 7 days a week. An officer can request to pick up a key at our Brooklyn or Bronx locations by appointment. There is a $1.00 duplication charge for the key.
(13) Q. What happens if an officer wants to purchase a property that is advertised to the public?
A. If the property is: (1) located in a HUD-designated revitalization area, and (2) is unsold with no active offer (s) on it, then it may still be purchased by a law enforcement officer at the 50% discount. The officer must submit a competitive bid at 100% of the listing price, but will only have to qualify for 50%. The 50% discount will be applied at closing.
(14) Q. Will HUD provide a home warranty?
A. No. All sales are as is, without warranty of any kind.
(15) Q. Can we offer multiple unit properties (e.g. 2-4 units) to the officers?
A. No. Only single unit properties may be purchased for the OND program.
(16) Q. Can an officer offer less than the value established by the office?
A. No. The contract sales price must be the value established by the office.
(17) Q. If we get ten calls from officers to look at several properties, do we give all of them keys for each property?
A. Yes, the general principle is to try to be as fair as possible.
(18) Q. May the HUD office require an officer to provide a pre-qualification letter?
A. Yes. However, if this is a requirement, be consistent and require it for all prospective buyers under the program.
(19) Q. If a non-profit or government agency is purchasing the property with the intention of selling it to an officer at a later date, is the name of the officer required when the offer is made?
A. No. The name of the officer is not required at the time the offer is made.
(20) Q. If we have more than one officer interested in the same property, can we hold a back-up offer?
(21) Q. Will the officer be required to pay an earnest money deposit when submitting contract for a HUD/REO property?
A. No, it's the same as a direct sale.
(22) Q. How long can a non-profit hold onto the property before they actually sell to an officer?
A. There is no prescribed time for the ultimate sale to an officer. However, the office should monitor the non-profit's performance.
(23) Q. Will HUD pay a sales commission and/or all or part of the closing costs?
A. Yes, but the amount is deducted from the total discount. Example: The purchase price is $80,000 and the officer requests closing costs of $2,000 and commission of $4,000. With the 50% discount = $40,000, at closing the officer's discount is reduced to $34,000.
(24) Q. Can the officer sell the property for whatever the value is after the 3 years and keep any profit?
(25) Q. What happens to an officer, who is separated from the department within 3 years of the purchase?
A. Nothing. However he/she must be good standing with the department when the contract is signed.
(26) Q. Some agencies have other home buying programs. Can the Officer Next Door program work alongside these?
A. Yes, as along as our guidelines are not violated in supporting these other programs.
(27) Q. Is there a certain length of time an officer is required to stay in the house they purchase?
A. Officers must live in the property as their primary residence for at least three years after purchase.
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