Officer Next Door (OND)
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.
OND property is listed and sold exclusively over the Internet.
Properties are single family homes located in Revitalization Areas.
Properties available through the program are marked with a special Officer Next Door button.
Bids are awarded once each week.
Your bid must be the amount of the list price.
You may submit your bid directly or utilize the services of a real estate broker.
Winning bids are randomly selected by computer. The winning bid is posted each week on the website where you made your bid.
You may also buy a home from a government agency or a nonprofit organization that bought the home from HUD. When an agency or nonprofit buys the house, HUD expects the full discount to be passed on to you.
In all cases, HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.
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 down-payment 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 Ardain Mortgage Corp
Because homes sold through the OND program are located in Revitalization Areas there may be additional assistance from state or local government sources.
General Questions – OND:
Question: Am I Eligible for the Officer Next Door Program?
You can participate if you are a full-time law enforcement officer sworn to uphold and make arrests for violations of Federal, state, county, or municipal law. You can work for federal, state, county, or municipal government, or a college or university.
Question: How Much of a Discount Can I Get on a HUD Home?
Answer: You can get a 50 percent discount off the HUD list price. For example, if HUD lists a home at $100,000, you can buy it for $50,000. If you qualify for any FHA-insured mortgage program, your down-payment is only $100. (Call Ardain Mortgage Corp at 1-847-963-1000 for more information)
Question: How Does the Program Work, and What Kind of Mortgage Financing Do I Need?
Answer: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for 3 years.
Question: What Is HUD’s FHA 203(k) Rehabilitation Mortgage, and How Can It Help Me Buy a HUD Home?
Answer: The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment.
Question: Can I Sell the Officer Next Door Home after 3-years and Keep the Profit?
Answer: Yes. After you live in the OND home 3 years, you can sell the home and keep any equity and/or appreciation.
Question: Do I Have to Use a Real Estate Broker or Agent to Buy an Officer Next Door Home?
Answer: You can buy a home directly through HUD, or you can use a real estate broker or agent. It’s important to know that HUD does not pay any closing costs or real estate commissions on top of the 50% discount.
Question: Do I Have to Be a First Time Homebuyer to Take Advantage of the Program?
Answer: No, but you must not own any other residential real property when you close on your OND home. You must live in the HUD home as your sole residence for the full, 3-year, mandatory occupancy term.
Question: Where Are Officer Next Door Homes Located?
Answer: The HUD homes are located in designated Revitalization Areas. There are hundreds of Revitalization Areas located in the United States.
Question: Does HUD Provide a Home Warranty?
Answer: No. All Officer Next Door homes are sold “as is,” without any kind of warranty.
Question: Can I Buy Multiple Unit Properties (E.g., Duplexes, Triplexes, Etc.) through the Officer Next Door Program?
Answer: No. You can only buy single unit homes, townhouses, and condominiums through the Officer Next Door Program.
Question: Do I Have to Pay Earnest Money or Other Deposits in Order to Submit a Contract for an OND Home?
Answer: No. If you chose an FHA insured mortgage such as the FHA 203(b) or FHA 203(k), you only need a $100 down-payment. If you get a conventional mortgage, your mortgage lender sets the amount of the down-payment. You don’t have to pay any other earnest money deposits.
Question: Can I Bargain with HUD on the Price of an Officer Next Door Property?
Answer: No. You must offer the exact HUD list price when “bidding” on any Officer Next Door property. Then you get a 50 percent discount off of that list price.
Question: What if I Leave My Law Enforcement Agency, for Any Reason, during the Mandatory 3-year Residency Period?
Answer: Nothing happens, but you must continue to live in the home for the full 3-year mandatory occupancy period. If you don’t, you will have to repay HUD on a prorated schedule.
Question: Some Agencies Have Other Home-buying Programs. Can the Officer Next Door Program Work in Conjunction with These?
Answer: Yes, as long as you can meet all the Officer Next Door program rules while participating in these other programs.
Question: What Happens if an Officer Fails to Honor the 3-year Residency Requirement?
Answer: First of all, HUD can demand repayment of the discounted amount in full or on a prorated basis. That means you would have to repay 90 percent of the discount during the first year, 60 percent during the second year, and 30 percent during the third year. HUD also may initiate administrative sanctions including, but not limited to, barring the officer from participating in any HUD/FHA programs, as well as other federal programs. In any case of fraud or abuse, HUD will refer the case to HUD’s Office of the Inspector General for investigation and possible criminal prosecution. HUD may also notify the officer’s employing agency. Criminal prosecution and conviction for fraud and abuse concerning the OND Program can result in a fine of up to $250,000 and/or two years in federal prison.
Question: How Does HUD Enforce the 3-year Residency Requirement?
Answer: The officer must certify he or she is living in the OND home as a sole residence at the time of purchase and each year after that. HUD can conduct “spot checks” to make sure the OND home is your sole residence at any time during the 3-year period.