Officer Next Door Program FAQ

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.

Q. Is the officer eligible to receive any Real Estate Own sales incentives and/or bonuses?

A.Yes. The only sales incentive available under this program, however, is the early closing bonus.

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.

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.

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.

Q. Does the $100 down payment apply only to 203(k) program?

A.No. The $100 down payment applies to all FHA-insured programs.

Q. Is there a one time discount of 50 percent?

A.Yes. This is the discount for properties in revitalization areas.

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.

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.

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.

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.

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.

Q. Will HUD provide a home warranty?

A.No. All sales are as is, without warranty of any kind.

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.

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.

Q. May the HUD office require an officer to provide a pre-qualification letter?

A.Yes. If there is a requirement, however, it will be consistent and required for all prospective buyers under the program.

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.

Q. If we have more than one officer interested in the same property, can we hold a back-up offer?

A.Yes.

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.

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.

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.

Q. Can the officer sell the property for whatever the value is after the 3 years and keep any profit?

A.Yes.

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.

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.

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. For More Information, please Contact:

MemphisHUD

2075 Exeter Rd., Ste. 60
Memphis, TN 38138
901.758.1200 Tel
877.221.4841 Toll-free
866.278.2875 Fax