What are the owner-occupancy requirements under the Good Neighbor Next Door program?

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:

  • 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.  

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 the form to the GNND participant. The GNND must sign, date, and return the form according to the instructions in the letter.
If the GNND participant fails to complete and return the annual certification, HUD will take action to determine whether the GNND participant meets program requirements.
When the GNND participant requires an interruption to the owner-occupancy term, the Borrower must submit a written and signed request at least 30 Days before the anticipated interruption to HUD’s Loan Servicing Contractor. The request must include the following information:

  • reason(s) why the interruption is necessary;
  • dates of the intended interruption; and
  • certification that the GNND participant:
    • is not abandoning the home as their permanent residence; and
    • will resume occupancy of the home upon the conclusion of the interruption and complete the remainder of the 36-month owner-occupancy term.

Eligible GNND program participants who are also military service members protected by the Servicemembers Civil Relief Act (SCRA) are not required to submit the written request to HUD 30 Days in advance of an anticipated interruption, but must submit the 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 the National Servicing Center (NSC) when Active Duty military service would require temporary relocation outside of the commuting area of the Property.
If the GNND participant sells 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.
HUD’s Loan Servicing Contractor:
Novad Management Consulting
Shepherd Mall
2401 NW 23rd Street Suite, 1A1
Oklahoma City, OK 73107
Toll-Free: (877) 622-8525
Fax: (800) 489-1733
Email Boxes:

For policy information see Handbook 4000.1 Section III.A.3.g. at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02954