Good Neighbor Next Door Program
Frequently Asked Questions



1) Who are you guys?
Rob Sipes and Robert Kaetzel of Real Estate Professionals, Inc. We are real estate licensees in the State of Maryland and sell the majority of the homes available under the program here. We have helped a large number of clients successfully purchase a home at a 50% discount with the Good Neighbor Next Door Program.

We are affectionately known by our clients as "The Robs". We are also the preferred real estate agents in Maryland who work in conjunction with Bruce Arrant, Good Neighbor Next Door Realty, Inc,

We are the experts who can help you be successful with the Good Neighbor Next Door Program (GNND Program).


2) What is HUD?
HUD is the Department of Housing and Urban Development, an agency of the federal government.


3) How are you involved with this program?
HUD says that if you want to purchase a Good Neighbor Next Door home you must utilize the services of a HUD registered licensed real estate broker. That's us!


4) Can I deal with any real estate agent that I want?
Yes, however the agent's brokerage must be HUD registered and the brokerage must have a current NAID number.

Most real estate agents have never participated in a Good Neighbor Next Door sale. Purchaser find it advantageous to deal with someone who has experience with the program as it can be quite complicated and bureaucratic. If the agent is unfamiliar with the program and the process of navigating a Good Neighbor Next Door sale, they can screw things up for you pretty badly. You don't want to miss an opportunity on a property because the agent doesn't know what they are doing.

You will find it valuable to have a "problem solver" agent like us on your side.


5) How does a house become a HUD Home and qualify for the Good Neighbor Next Door (GNND) program?
The Federal Housing Administration (FHA), which is a part of the Department of Housing and Urban Development (HUD), provides federal mortgage insurance to Mortgage Lenders. This guarantees that Mortgage Lenders will be reimbursed in the event home buyers default on their mortgage. When a Mortgage Lender is forced to foreclose on an FHA-insured single family home, townhouse, duplex, triplex, fourplex or condominium because the owner can no longer make payments, the Mortgage Lender can file an claim with FHA for the balance due on the mortgage and convey title of the property to HUD. If that home is in a geographically coded area declared as a Revitalization Zone, then it may be placed for sale under the GNND program. GNND homes are offered to participants before the General Public has an opportunity to buy them.


6) Are all HUD homes eligible for the GNND program?
No. Only a select few properties that are HUD acquired are available for the GNND program. Do not wait for the perfect house or perfect location. If a home is listed that you can qualify to purchase and it meets you minimum housing needs, then always try to take advantage of the opportunity. There is only a 36-42 month occupancy commitment and then you can sell the home, keep it as a rental, or live in it as long as you want. Some GNND participants live in their homes well beyond the three year residency requirement.


7) Where do I obtain financing for the home?
You can use any Mortgage Lender of your choice and any type of financing. However, to take advantage of the $100.00 down payment program, you must use FHA 203B or 203K (renovation) financing. Please keep in mind that it is difficult or impossible to combine other assistance programs with the GNND program. It is also not usually possible to use a Veterans Administration (VA) loan on most properties.


8) Can I bargain with HUD on the price of a property?
No. The Lottery winner gets a 50 percent discount off of the listed price. You can't offer less than or more than the listed price of the home. All Good Neighbor Next Door homes are listed at the as-is appraised value of the property. Appraisals are obtained prior to putting the property on the market by HUD's management and marketing contractor.


9) How does the Lottery process work and when will I find out if I won?
We have made it easy for you to enter the lottery on a property.

Just fill out our online form at to submit your information to us.

The lottery drawing takes place eight days after the house is listed, unless it falls on a weekend or Federal holiday. All lottery entries must be received before midnight (CST) the seventh day. All Winners are notified the following day of the lottery. If the initial winner does not close, then the option to buy the house goes to the backup entrant. Backup winners may be notified weeks or even months after the lottery drawing has taken place however you are under no obligation to move forward if you no longer want that property.


10) Why is my Social Security number required to enter the lottery drawing?
This is HUD's requirement and it is the only way to make sure every participant enters the lottery only one time on any given home and that they have NOT previously purchased a GNND home. We use a secure page and online form to make sure that your personal information is secure.


11) What are my chances of getting a home?
The chances of winning are directly proportional to the number of entries. Many homes have been awarded to participants because they were the only lottery entry. If one Teacher, one Firefighter and one Officer were all in the lottery drawing for the same home, everyone has an equal chance and 33% chance of winning.


12) What happens if no one enters the lottery drawing?
If no one enters the Lottery for a home during the exclusive 7 day GNND listing period the home will be marketed to the general public at full price. The property will not be available for purchase under the Good Neighbor Next Door Program again.


13) Should I look at every home that becomes available before I enter the lottery?
Yes and No. Remember these homes may have been neglected for several months prior to HUD taking ownership. HUD sells property "as is" and does not fix them up for curb appeal. Make sure the area is right for you and the repair escrow or 203K loan will take care of the house fix up expenses.

On the more desirable properties where there may be many lottery entries we usually recommend entering the lottery and if you win you can look at the property and determine if you want to move forward on it.


14) What if I win a home and then change my mind about purchasing it?
If you enter the lottery on a property, win it and then choose not to move forward on a property BEFORE you sign a purchase agreement you will be eligible to bid on another home and the only thing you lose is the opportunity to purchase that property.

If you decide not to purchase the home after your contract of sale has been signed by you and HUD, then you may lose your earnest money deposit. If you are unable to get financing, are subject to serious illness, job loss, or the death of immediate family member, or for other good cause, then the earnest money will be refunded to the Buyer at HUD's discretion. Any money spent on inspections or utility connections will not be refunded.


15) What does IN, IE, and UI mean?
HUD homes are listed three ways "IN" Insurable, "IE" Insured with Escrow, and "UI" Uninsurable. This has nothing to do with home owner's insurance coverage, and everything to do with whether the property qualifies or meets minimum property standards (MPS) for an FHA type loan. In order to obtain an FHA Insured Loan, FHA requires that a home meet certain requirements and standards. "IN" Insurable means the property in its present condition appears to meet all minimum property standards to qualify for an FHA loan without any repairs. "IE" Insured with Escrow means that there are some deficiencies that do not meet the minimum property standards, but the home does qualify for an FHA 203B with Repair Escrow loan. These deficiencies or minimum property standards violations are things like a broken hot water heater, minor roof repairs, peeling paint, missing flooring or damaged drywall etc... It has been estimated by the appraiser of the property that all the repairs would cost $10,000 or less to meet minimum property standards. The Repair Escrow amount is not paid by HUD and is added to the Buyers total loan amount. The Buyer has 30 days to make the repairs and then after an inspection; your Lender releases the repair escrow money to you. "UI" Uninsurable means that it has been estimated that repairs needed to bring the property back up to minimum property standards would cost more than $10,000. This property does not qualify for FHA 203B financing, but as with most HUD properties it does qualify for FHA 203(K) financing or 203(K) streamline financing. FHA 203K Financing is a property acquisition loan and home improvement/repair loan all rolled into one.

This part can get confusing and we are available to walk you through the financing process to help you arrange the financing that is best for you.


16) Should I get Prequalified for a mortgage?
Yes! Get started on the mortgage loan process through an FHA Lender who has experience with the 203K and 203B loan products as soon as possible. You must be pre-qualified by a mortgage lender unless you are paying cash. You are welcome to call your credit union or your own lender to arrange for financing but in our experience this is a very bad idea. Most credit unions don't do these types of loans. Most lenders have never heard of the program and will likely screw it up. If you would like to be pre-qualified for a Good Neighbor Next Door Purchase, reach out to us and we will connect you with a good lender.


17) What is the maximum amount that can be financed for repairs on the FHA 203K loan?
You can borrow up to 110% of the total appraised value for acquisition of the home, repairs, remodeling, upgrades, and appliances with the regular 203(k). And up to $35,000 on the streamline 203(k).


18) Who makes repairs and improvements to the homes?
On the FHA 203(B) with Repair Escrow, the Buyer hires a licensed Contractor to make the needed minimum property standard minimum property standards repairs ($10,000 or under). Prior to closing the Contractor must submit a bid to the mortgage company which declares the amount estimated for repairs is sufficient to cover the actual cost of the work. The money held in the repair escrow account will not be paid to the contractor or reimbursed to the Buyer until after the repairs are completed and inspected. On an FHA 203(K) or 203(K) Streamline, only FHA approved licensed contractors can make repairs and do improvements to your home, but check with your mortgage lender for additional contractor requirements such as references and/or credit checks, etc.


19) How long does it take to close on a home?
Homes with an "IN" or "IE" designation usually close in 45-60 days after the drawing. Homes designated "UI" usually close 60 to 75 days after the drawing.


20) If I am moving to another state when can I start entering the Lottery for homes in my new state?
You can start entering the Lottery in other states as soon as your employment can be verified and you are considered a FULL TIME employee in your new state.


21) What if my spouse or I own a home?
Current homeowners can no longer participate and you cannot have owned any residential real property for 365 days prior to lottery submission. Also, you are considered a current home owner if your spouse owns a home or has owned a home within the last 12 months. Vacant land, vacant lots, timeshares and any mobile homes or travel trailers that are taxed as personal property are not considered residential real property in most cases.


22) Am I restricted to bidding on properties in any particular area?

All purchasers are restricted to homes that are located in the areas served by their employer. Examples: A Prince George's County teacher can only purchase a GNND home located in PG County. A Baltimore County firefighter can only purchase a GNND home that is located in Baltimore County. A Baltimore City teacher can only purchase a GNND home that is located in Baltimore City. Private school teachers can purchase within the are served by their school. In some cases the private school teacher may be able to purchase in another area near their school if the school serves students in that area.

Law enforcement officers need to directly serve the location of the home that they are bidding on during their normal course of business/duties. If you have questions about where you are able to purchase, get in contact with us and we will help you.


23) How much earnest money do I have to put down?
After the property has been awarded to the Buyer, earnest money must be submitted with the contract for purchase and all GNND addendums. The program requires 1% of the listed price to be presented at time of contract submission in the form of certified funds (cashier's check or money order) payable to the buyer's title company. The minimum amount of earnest money is $500.00 if the listed price is below $50,000.00 and the maximum is $2,000.00 for homes appraised over $200,000. No money is needed until you win the lottery for the property and have decided to move forward with the purchase.


24) How does the $100 down payment work? What about Closing Costs?
If you choose to take advantage of the FHA $100 down payment, then all normal closing costs, repairs, improvements, broker commissions and fees associated with the acquisition of the property are added to your total loan amount and are part of your mortgage. You can choose to pay these expenses out of pocket if you like but most people don't.


25) There are several homes I want. Can I enter the Lottery on more than one property?
Yes! HUD does not allow you to choose homes if you are the winner of more than one house. You will be awarded the first property won and any subsequent wins will be passed on to the next entrant. The order in which Lotteries are conducted is random.


26) What continuing obligations apply to me if I purchase a GNND home?
Continue to own, and live in as your sole residence, the home you purchased through the Good Neighbor Next Door Program. Certify initially and once annually that this is true for three years. The residency requirement is extended to 42 months if you utilize renovation financing.


27) What happens if I get called to active military duty and get deployed?
Participants called up to active military duty and are deployed are provided clemency in regards to the owner occupancy requirements of the program for the time frame that they are deployed. Participants on deployed military duty are not required to occupy the property and are allowed to rent the property (only while deployed) if necessary to minimize potential vandalism risk. Written permission must be obtained from HUD prior to renting your GNND home if you find yourself in this situation.


28) How long do I have to live in the GNND home?
You must live in your GNND home as your primary residence for at least 36 months after closing to receive the full benefit of the 50% discount. This time is extended 30 days for an Insurable with Escrow property and 180 days for a UI property purchased with FHA 203K financing. If you get renovation (FHA 203K financing) the longest time that you will be obligated to live in the property to receive the full benefit of the 50% discount is 42 months.


29) Can I sell the Good Neighbor Next Door Home and keep the profit?
Yes! After you live in the GNND home for the entire occupancy term, you can sell the home and keep all the equity and appreciation. Most occupancy terms are just 36-42 months.

We can help you sell the property and move to your next one.

Some of our past clients have profited $50,000 - $100,000.00 (tax free) after purchasing a property and living it for the entire occupancy term.


30) What happens if I fail to honor the 3-year residency requirement?
HUD can demand re-payment of the discounted amount on a prorated basis. That means you would have to re-pay to HUD based on a percentage of the 36 months (3 years) you owned and lived in the home. If you received a $60,000 discount on a $120,000 home and sold the home after 18 months (One and half years), then HUD will take $30,000 (half the discount) from the proceeds of the sale. At the end of the occupancy term there are no restrictions or penalties on the sale of the property.


31) I have a foreclosure on my credit. Can I still participate in the program?
Yes, but FHA financing will not be available until three years after the foreclosure. If you have the funds available, then you can pay cash and not finance anything.


32) During the 3 year occupancy term can I rent out my GNND home and live somewhere else?
No. Only if you are called up for active military duty and deployed, then you may rent out or lease your GNND home after written approval from HUD.


33) What if the winner cannot close on the home they won?
If a lottery winner cannot close on the home, then a Backup participant will be notified they have the option to purchase the home. A primary Winner and two Backups are selected for each lottery drawing if there are at least three participants. Backup winners could be notified of selection in as little as 3 days or up to 3 months after the drawing.


34) I hear you have a YouTube Channel and put lots of info there.
Yes. We do publish lots of video content so make sure to subscribe to our YouTube Channel.

Make sure you are signed up to receive emails from us by filling out the form here or clicking the get started button below. Not every video is shared with the public.


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35) How can I get more questions answered?
Call or email us any time. You can reach Rob Sipes by calling 410-593-8903. You can also contact us through our web form located at the bottom of the main page.