Teacher qualifies to buy forecloser with $100 down payment

Mortgage banker: Terry T.

Terzakis

Property type: Single-family home in New Haven

Purchase price: $150,000

Loan amount: $81,938

Appraised value: $150,000

Loan type: Federal Housing Administration mortgage

Background: Unlike much of the country, Connecticut is still suffering from a high number of foreclosure filings. In fact, Connecticut’s foreclosure rates ranked among the top five states for 2017.

What this means for potential home buyers is the opportunity to purchase a new home at a deeply discounted price. For homes that are owned by the U.S. Department of Housing and Urban Development(which would be a foreclosed home that had an Federal Housing Administration mortgage), they offer several financing incentives to buyers to purchase these homes.

Buyers who will occupy a HUD-owned home can purchase with as little as $100 down payment. Additionally, HUD has a special program, the Good Neighbor Next Door program available to teachers, firefighters, police officers and EMT workers to purchase a HUD-owned home at a 50 percent discount off the list price.

One such buyer, a New Haven teacher, came to Terzakis to prequalify to purchase her first home. As Terzakis gathered the buyer’s information he learned that she did not have much savings so a loan program that did not require a large down payment was important.

Upon learning that the buyer was a New Haven teacher and was interested in buying in New Haven, the HUD Good Neighbor Next Door program was discussed. They buyer became incredibly excited about this opportunity and began her house hunting with this in mind.

Within a couple months, as luck would have it, a HUD-owned home came on the market that suited the buyer’s needs. Her offer was placed and within the week she learned her bid of $150,000 was the winning bid then she got to work to structure the mortgage with Terzakis.

Being a HUD-owned home meant she only needed $100 for her down payment. That she qualified for the Good Neighbor Next Door program meant HUD would offer to sell her the home for half of the listing price: $75,000. She was even able to roll her closing costs into her financing.

There are many specific rules to qualify for the Good Neighbor Next Door program including that the home must be located in one of HUD’s “revitalization areas,” which are typically the larger cities in Connecticut.

As well as the buyer being employed in one of the fields previously described, they must purchase a home in the same city in which they work.

Other guidelines do apply so this may not be the right program for everyone, but for those who meet the criteria they can take advantage of an incredible opportunity to purchase a home at half-price. When Terzakis’s buyer first began the process, she was skeptical she would even qualify, but it was her dream to own her own home so she figured she’d give it a try.

Not only does she own her first home, she has significant equity and a very low mortgage payment.

All this with only $100 out of pocket.

Terry T. Terzakis, Mortgage Banker, Atlantic Home Loans, 2751 Dixwell Ave., Hamden, (203) 691- 9788 tterzakis@atlantichomeloans.com