Under the Good Neighbor Next Door program, can a buyer finance their closing costs?

Under the Good Neighbor Next Door (GNND) Sales Program, an eligible buyer, who is purchasing a HUD Home with an FHA-insured loan can finance into the loan the reasonable and customary closing costs, including any prepaid items and real estate broker's commission. HUD will not pay any closing costs or real estate broker commissions for the buyer under the GNND programs.

For more information see:
Handbook 4000.1 II.A.8.o.i(D)(1) and II.A.8.o.vi(C)(1) available at  https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

Federal Register 24 CFR Part 291.500-525 is available at:    https://www.ecfr.gov/cgi-bin/ECFR?page=browse

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-03459