Whenever my parents told me to be a good neighbor, and citizen, I was always like, “ok are we done moralizing now, everyone knows that.” Well it turns out, being a good neighbor can, apparently, save you money as well! The program that is run by the US government’s Housing and Urban Development is known as Good Neighbor Next Door. The program is for teachers, firefighters, police officers, and EMTs, and allows them to buy homes in designated revitalization areas for a 50% discount. If you are a recent college graduate, and are struggling with a lot of student loan debt, the FHA allows a sweeter deal by allowing an FHA backed mortgage with only a $100 down payment.
These kinds of programs do come with conditions though. The house you buy has to be your sole residence for three years. You also can’t have owned another home within the previous year when you submit a bid to buy the house. There are always drawbacks to being a good neighbor, but as always the rewards almost always outweigh the cons.
The opportunity cost for this program for our public servants is enormous. Instead of buying a $100,000 house, the cost of your home would instead be $50,000. Imagine if you save that money, and use it to buy Disney stock. You would have paid off your house, and have a multimillion dollar fortune paying you thousands of dollars when you retire. That fifty thousand dollars you save can be used for a health emergency. The money could be used as a liquidity cushion. You can start a college fund for your kids. The point is that if you are ok with the trade-offs offered by this program, you can use this as a springboard to live a life you find fulfilling combined with financial independence.