[Federal Register Volume 64, Number 234 (Tuesday, December 7, 1999)]
[Notices]
[Pages 68370-68371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31632]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4526-N-01]


Teacher Next Door Initiative; Notice

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: HUD announces the creation of the Teacher Next Door Initiative 
(TND Initiative). This initiative, modeled after HUD's successful 
Officer Next Door Sales Program, will help more teachers become 
homeowners and help revitalize economically distressed neighborhoods by 
enabling eligible teachers to purchase HUD-acquired homes located in 
HUD-designated revitalization areas at a 50% discount from list prices. 
The goal of the TND Initiative is to encourage teachers to live and 
work in urban school districts, where they are needed most, and to 
enhance the community's quality of life by promoting the integration of 
dedicated role models and mentors into the community.

FOR FURTHER INFORMATION CONTACT: Joe McCloskey, Director, Single Family 
Asset Management Division, Office of Insured Single Family Housing, 
Room 9286, U.S. Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410-8000; telephone (202) 708-1672 
(this is not a toll-free number). Hearing- or speech-impaired 
individuals may access this number via TTY by calling the toll-free 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    A vital part of HUD's mission is to promote homeownership and 
accelerate the revitalization of cities. In support of these goals, HUD 
initiated the Officer Next Sales Program (OND Sales Program) (See the 
interim rule published in the Federal Register on July 2, 1999, 64 FR 
36210). The OND Sales Program enables full-time law enforcement 
officers to purchase HUD-acquired homes located in HUD-designated 
revitalization areas at a 50% discount from list prices. To date, more 
than 2,700 purchase contracts have been accepted from law enforcement 
officers.

II. The Teacher Next Door Initiative

    The success of the OND Sales Program has led to the development of 
the Teacher Next Door Initiative (TND Initiative). This program, 
modeled after the OND Sales Program, will help more teachers become 
homeowners and help revitalize economically distressed neighborhoods by 
enabling eligible teachers to purchase HUD-acquired homes located in 
HUD-designated revitalization areas at a 50% discount from list prices. 
The goal of the TND Initiative is to encourage teachers to live and 
work in urban school districts, where they are needed most, and to 
enhance the community's quality of life by promoting the integration of 
dedicated role models and mentors into the community.
    The homes made available through the TND Initiative are homes 
previously insured by the Federal Housing Administration (FHA). These 
homes are acquired by HUD when their owners fail to make mortgage 
payments and the homes are foreclosed upon. To qualify for the 50% 
discount, a home must be located in a revitalization area. 
Revitalization areas are typically low- or moderate-income 
neighborhoods with many vacant properties and often high crime rates 
that are considered good candidates for economic development and 
improvement. Currently, about 4,000 of the 47,000 homes owned by HUD 
are located in revitalization areas.

III. Requirements of the TND Initiative

    The following requirements apply to the TND Initiative:
    (a) Eligible teachers. To be eligible to participate in the TND 
Initiative, a person must be employed full-time by a public school, 
private school, or Federal, state, county, or municipal educational 
agency as a state-certified classroom teacher or administrator in 
grades K-12.
    (b) Residency requirement. The teacher must agree to live in the 
home purchased through the TND Initiative as their sole residence for 
at least three years. In addition, the teacher must not own any other 
residential real property during this time. The teacher will be 
required to certify at the time of purchase and once annually, for each 
of the three years, that he or she continues to live in the home as his 
or her sole residence and that he or she does not own any other 
residential real property.
    (c) Second mortgage. The teacher must agree to execute a second 
note and mortgage on the home purchased through the TND Initiative. The 
amount of the second mortgage will be the difference between the list 
price of the home and the discounted selling price. The second mortgage 
will have a term of three years. The amount of the second mortgage will 
be reduced, according to a schedule established by HUD, periodically 
over the three year term. At the end of the three year term, the

[[Page 68371]]

amount of the second mortgage will be zero. If the teacher sells the 
home, does not continue to live in the home as his or her sole 
residence, or becomes an owner of any other residential real property 
before the three year residency requirement is complete, he or she will 
owe HUD the amount due on the second mortgage.
    (d) FHA mortgage insurance. If the home is eligible for an FHA-
insured mortgage, the teacher may choose to finance the home with an 
FHA-insured mortgage. In this case, the downpayment for the home will 
be $100.
    (e) Local governments, school districts, and nonprofit 
organizations. Local governments, school districts, and private 
nonprofit organizations may purchase homes through the TND Initiative, 
if they intend to resell these homes directly to eligible teachers 
under the terms and conditions of the TND Initiative. To avoid the cost 
of a dual closing, local governments, school districts, and private 
nonprofit organizations will have to assign the sales contract to an 
eligible teacher before, or at the time of, closing or participate in a 
three-party closing with the eligible teacher.
    (f) Real estate brokers. Teachers may use the services of a real 
estate broker. Any fee required by the broker, however, will be 
deducted from the 50% discount on the home.
    (g) Single-unit homes. Only single-unit homes are eligible under 
the TND Initiative. Detached homes, condominiums, and townhouses are 
all eligible under the Initiative.
    (h) Revitalization areas. Homes purchased through the TND 
Initiative must be located in HUD-designated revitalization areas.
    (i) One year program. The TND Initiative is a temporary program 
that will operate from November 1999 to November 2000.

IV. For More Information About the TND Initiative

    Teachers, local governments, public school districts, private 
nonprofit organizations, and other interested persons can receive a 
brochure about the TND Initiative by calling (800) 483-7342, or by 
visiting HUD's Web site at http://www.hud.gov.

    Dated: November 30, 1999.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 99-31632 Filed 12-6-99; 8:45 am]
BILLING CODE 4210-27-P