Officer Next Door
Frequently Asked Questions
(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. Can the officer wrap repair cost into their
mortgage?
A. Yes, HUD has a 203(k) rehab loan that allows the
borrower to make one payment for both purchase and rehabilitation.
(3) 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.
(4) Q. Does the $100 down payment apply only to 203(k)
program?
A. No. The $100 down payment applies to all FHA-insured
programs.
(5) Q. Is there one discount 50 percent?
A. Yes. This is the discount for properties in
revitalization areas.
(6) 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.
(7) 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.
(8) Q. Will HUD provide a home warranty?
A. No. All sales are as is, without warranty of any kind.
(9) 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.
(10) 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.
(11) 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.
(12) Q. If we have more than one officer interested in the
same property, can we hold a back-up offer?
A. Yes.
(13) 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.
(14) 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.
(15) Q. Can the officer sell the property for whatever the
value is after the 3 years and keep any profit?
A. Yes.
(16) 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.
(17) Q. Some agencies have other home buying programs. Can
the Officer Next Door program work alongside these?
A. Yes, along as our guidelines are not violated in
supporting these other programs.
(18) 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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