Are you a cop, firefighter, EMT, or a teacher? Think about buying a HUD home
26 July 2006This is a no-brainer, but it’s an obscure one that many people may not know about. So if you know a police officer or a teacher who doesn’t own their home, tip them off.
I was browsing through a CNN article on buying HUD homes at a discount to get some extra value on your first home, and came across this:
Homes are first offered to approved non-profit organizations, mostly in inner-city neighborhoods, at a 50 percent discount to their appraised values. The non-profits then rehabilitate and resell them.
Any properties not picked up by the non-profits are then offered to police officers and teachers at a 10 percent discount. HUD also recently began giving first shot at homes coming into the system to people made homeless by Hurricane Katrina at the same 10 percent discount.
So if you’re a cop, a teacher, or an evacuee who’s still homeless, you’d get an opportunity that is too good to pass up: an instant 10% off a home that has already been reduced in price – and you get the first shot at buying it before everyone else. If you buy a $100,000 home, that means you instantly socked $10,000 away in the form of home equity – and your mortgage payments will be that much lower. How do you get the discount?
I did a little digging and found out the details. The programs are called the Officer Next Door program and the Teacher Next Door program. And it turns out it’s also available for firefighters and emergency medical technicians under the Firefighter / EMT Next Door program.
But the best part is that CNN appears to have incorrectly stated the discount in the article. All three programs on the HUD site list the discount differently – AS 50 PERCENT. That’s right – a fifty percent discount on your house. A quote:
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.
So in actuality, you’d be making $50,000, instantly, just by buying a house – with a $100 downpayment.
Now, what’s the catch? It turns out there is one - you can only get homes in certain areas under this program, called “Revitalization Areas.” This generally means you have to buy the home in a low-income area – the idea is to encourage people who contribute to the community to live in those areas. You also have to agree to live in the home for three years, minimum – and you can’t own another home when you buy.
But, after the three years are up, you can sell the house and keep the profit – meaning you’re basically getting paid an extra $17,000 a year in our example. What’s more, there doesn’t seem to be any restriction on doing this multiple times, so long as you sell the home.
I would read this over carefully and obviously check out the area before moving in – but low income does not necessarily mean dangerous, and for careers that traditionally don’t pay all that much, this would be a huge bonus in savings. It’s definitely something that everyone in these professions should be aware of.
Discuss this on the Free the Drones Forums here.
5 Responses to “Are you a cop, firefighter, EMT, or a teacher? Think about buying a HUD home”
October 23rd, 2007 at 2:57 am
I AM A OFFICER, I LIKE KNOW MORE ABOUT THE POLICE OFFICER,TEACHERS NEXT DOOR PROGRAM. AND WHAT I HAVE TO DO TO BUY A HOME.
OFC. WALTON
773-476-6074
THANK YOU
October 23rd, 2007 at 3:11 am
I AM COOK COUNTY SHERIFF
January 11th, 2008 at 5:33 pm
i would like to learn more about this, i am going to sell my home and i would like to buy one of these.
April 17th, 2008 at 3:33 am
I AM A POLICE OFFICER, I’D LIKE KNOW MORE ABOUT THE POLICE OFFICER,TEACHERS NEXT DOOR PROGRAM.
May 27th, 2008 at 4:03 pm
I would like the criteria on what it takes to be iligible for the are you a cop, teacher or emt. I work for a housing resource center and I have clients that fit into your program. Can this be emailed or fxed to me?
Thanks in advance