FHA Single Family Housing Policy Handbook 4000.1, Part III — f. Good Neighbor Next Door (03/31/2022)

FHA Single Family Housing Policy Handbook 4000.1, Part III — f. Good Neighbor Next Door (03/31/2022)

f. Good Neighbor Next Door (03/31/2022) i. Owner-Occupancy Term The Good Neighbor Next Door (GNND) participant must live in the Property as their sole residence for an owner-occupancy term of 36 months, beginning on one of the following dates: • 30 Days after closing if the home requires no more than $10,000 in repairs before occupancy; • 90 Days after closing if the home requires more than $10,000, but not more than $20,000 in repairs; or • 180 Days after closing if the home requires more than $20,000 in repairs prior to occupancy. (A) Annual Certification (1) Standard GNND participants must certify on form HUD-9549-D, Good Neighbor Next Door: Sales Program, every year of the owner-occupancy term that they are living in the Property. HUD’s Loan Servicing Contractor will mail form HUD-9549-D to the GNND participant. The GNND must sign, date, and return the form according to the instructions in the letter. (2) Failure to Return Certification If the GNND participant fails to complete and return the annual certification, HUD will take action to determine whether the GNND participant still meets program requirements. These actions include, but are not limited to: • referral to an investigator, who may perform an on-site visit to verify the occupancy of the Property; and • referral to HUD’s Office of Inspector General (OIG) for further investigation and possible prosecution. (B) Term Interruption Requests When the GNND participant requires an interruption to the owner-occupancy term, the Borrower may request approval for a term interruption from HUD. The GNND participant must submit a written and signed request at least 30 Days before the anticipated interruption to HUD’s Servicing Contractor. The request must include the following information: • the reason(s) why the interruption is necessary; • the dates of the intended interruption; and • a certification that: III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 3. Programs and Products - Good Neighbor Next Door (03/31/2022) Handbook 4000.1 1356 Last Revised: 11/26/2025 o the GNND participant is not abandoning the home as their permanent residence; and o the GNND participant will resume occupancy of the home upon the conclusion of the interruption and complete the remainder of the 36-month owner-occupancy term. (C) Active Duty Military Service Eligible GNND program participants who are also military service members protected by the SCRA are not required to submit their written request to HUD 30 Days in advance of an anticipated interruption, but must submit their written request as soon as practicable upon learning of a potential interruption. HUD may grant exceptions to the occupancy requirement for participants who are called to Active Duty service. These participants must notify HUD when Active Duty military service would require temporary relocation outside of the commuting area of the Property purchased under the GNND program. (D) Failure to Complete Owner-Occupancy Term If the GNND participant sells their home or stops living in the home as their sole residence prior to the expiration of the owner-occupancy term, they will owe HUD the amount due on the second Mortgage as of the date the Property is either sold or vacated. ii. Second Mortgage and Note Servicing HUD’s Servicing Contractor is responsible for the servicing of GNND second Mortgages. GNND Participants must submit requests for subordinations, payoff amounts, mortgage releases, or other servicing information to HUD’s Servicing Contractor. (A) Subordinations To request subordination of a GNND Mortgage, the GNND participant, or the Closing Agent responsible for closing the new Mortgage must: • contact HUD’s Loan Servicing Contractor to receive a Subordination Information Sheet; and • submit the required documentation, as listed in the Subordination Information Sheet, to HUD’s Loan Servicing Contractor. (B) Payoffs To pay off a GNND Mortgage before the expiration of the owner-occupancy term, the GNND participant must submit to HUD’s Loan Servicing Contractor a request for a Payoff, including the following information: III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 3. Programs and Products - Good Neighbor Next Door (03/31/2022) Handbook 4000.1 1357 Last Revised: 11/26/2025 • GNND participant’s name; • full property address; • estimated date of Payoff; • name, address, telephone number, and return fax number of the entity requesting the Payoff; and • signed permission of the GNND participant to collect this information. (C) Releases At the end of the required owner-occupancy term, HUD will release the GNND second Mortgage as long as all of the following conditions are met: • The GNND participant has completed and returned the required annual certifications. • The GNND participant is not currently under investigation by OIG. • The GNND participant is in compliance with all GNND regulations. HUD’s Loan Servicing Contractor will prepare this release and file the mortgage satisfaction with the GNND participant’s local county recorder’s office. III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages

Source: FHA Single Family Housing Policy Handbook 4000.1, Part III — f. Good Neighbor Next Door (03/31/2022) · source URL · snapshot 8c03836f77f317e1