\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

+-----------------------------------+----------------------------------+
| ## Special Attention of:          | **Notice**: H 07-07              |
|                                   |                                  |
| ## A                              |                                  |
| ll Homeownership Center Directors |                                  |
|                                   |                                  |
| ## All                            |                                  |
| Real Estate Owned (REO) Directors |                                  |
|                                   |                                  |
| ## All Man                        |                                  |
| agement and Marketing Contractors |                                  |
+-----------------------------------+----------------------------------+
|                                   | Issued: November 30, 2007        |
+-----------------------------------+----------------------------------+
|                                   | Expires: November 30, 2008       |
+-----------------------------------+----------------------------------+
|                                   | Cross References: 12 U.S.C. 1701 |
|                                   | [et seq]{.underline}.; 42 U.S.C. |
|                                   |                                  |
|                                   | 1441, 1441a, 1551a, and 3535(d)  |
|                                   |                                  |
|                                   | 24 CFR Part 291, Subpart F       |
+-----------------------------------+----------------------------------+
| **\_\_\_\_\_\_\_\_\               |                                  |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |                                  |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\ |                                  |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |                                  |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\ |                                  |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** |                                  |
|                                   |                                  |
| **Subject: Good Neighbor Next     |                                  |
| Door Sales Program---Adoption of  |                                  |
| Contents for Subordinate Note and |                                  |
| Mortgage; Referral of Customers   |                                  |
| for Servicing Information**       |                                  |
+-----------------------------------+----------------------------------+
|                                   |                                  |
+-----------------------------------+----------------------------------+

HUD established new regulations establishing the Good Neighbor Next Door
Sales program (GNND) at 71 Fed. Reg. 64422--64428 (November 1, 2006),
effective on December 1, 2006, replacing the former Officer Next Door
Sales program, 24 CFR Part 291, Subpart F, and the Teacher Next Door
Sales program, Housing Notice 99-30.

This Notice provides the contents for a subordinate note and mortgage,
mandatory for use in sales transactions associated with the GNND
program. This Notice also provides requirements and information related
to 24 CFR 291.550 as follows:

-   The occupancy period of 36 months must begin on the start date
    referenced at 24 CFR 291.540(b).

-   The amount of the second mortgage is reduced by 1/36th (on the last
    day of each month) of occupancy following the occupancy start date.
    At the end of the 36th month of occupancy, the amount of the second
    mortgage will be zero.

-   If the GNND program participant sells his home or stops living in
    the home as his sole residence prior to the expiration of the
    owner-occupancy term, the amount due on the second mortgage as of
    the date the property is either sold or vacated will be due and
    payable.

-   Program participants needing pay off amounts, mortgage releases or
    other servicing information should be referred to:

C&L Service Corp./Morris-Griffin Corp.

Attn:  HUD GNND Department

2488 E. 81^st^ Street, Suite 700

Tulsa, OK  74137

> \(918\) 551-5300 or
>
> \(866\) 377-8667 (toll free)
>
> Fax: (866) 249-0626 (toll free)

Attachment A provides the required content for the subject Note.

Attachment B provides the required content for the subject Mortgage.

Closing agents should immediately begin using the contents of the note
and mortgage, provided in this Housing Notice for all sales transactions
associated with the GNND program.

The above addressees should take immediate steps to inform all parties
of interest of this Housing Notice and to insure that GNND closings
occur in accordance with this directive.

For additional information, please contact James Everett 202-708-1672.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

> Brian D. Montgomery
>
> Assistant Secretary for Housing-
>
> Federal Housing Commissioner
>
> Attachments: Attachment A, Department Of Housing And Urban
> Development, FHA Good Neighbor Next Door Program Note
>
> Attachment B, Department Of Housing And Urban Development, FHA Good
> Neighbor Next Door Sales Program Second Mortgage