HUD widens deal in cities

Teachers offered 50% discount on foreclosed homes

Repeat of police program

August 22, 1999|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

First they invited police officers to the neighborhood. Now teachers are getting a similar invitation from the Department of Housing and Urban Development.

Next month, HUD is expected to expand a program to teachers that will offer them a 50 percent discount off the selling price of foreclosed homes in its revitalization areas.

The "Teacher Next Door" program is being modeled after the federal government's successful "Officer Next Door" initiative in hopes of attracting and retaining educators who work in the city school system.

"The clear intent is that many school districts that serve our inner-city communities have difficulty retaining teachers," said Bill Apgar, a HUD housing commissioner in Washington. "Many of the best teachers seek to teach elsewhere, and we wanted to focus our attention on providing extra benefit to those teachers who teach in some of the most difficult circumstances."

The initiative was announced this summer by HUD Secretary Andrew M. Cuomo and was to be in place this month. However, HUD officials are still resolving issues, including whether the program would be extended to teachers who work at private schools. Nevertheless, HUD expects a full rollout of the program by the time most schools begin classes.

Like those in the Officer Next Door program, the HUD homes offered for sale were insured though the Federal Housing Administration before going into foreclosure and were in revitalization areas designated by HUD. Those areas typically are low- and moderate-income neighborhoods that have many vacant properties and high crime rates.

Eligible applicants can submit a contract on a home in the revitalization area at half its listed price.

When HUD foreclosed properties go on the market, the department gives teachers and officers priority in submitting contracts before accepting other bids.

HUD would also reduce the down payment requirement to $100 if the home is purchased with an FHA-insured mortgage.

To be eligible, a buyer must be employed full time by a federal, state, county or municipal educational agency and hold a current state-level certification as a classroom teacher in kindergarten through 12th grade. Teachers must live in the property as their primary residence for at least three years.

Also, Apgar said an eligible applicant can teach anywhere in the school district, not just at schools that are within one of the city's 20 revitalization zones.

When the Officer Next Door program was launched in late 1997, HUD had a 12-month goal of selling 1,000 foreclosed homes nationwide at half-price to officers. "We blew through that in six months," said Apgar.

According to HUD, police officers have purchased 2,749 homes through the program. In Baltimore, police officers have used the program to purchase 63 homes.

"It is a very good deal to put a HUD home into the hands of a solid citizen who's going to live there as their principal residence for three years," said James Kelly, a HUD spokesman in Baltimore. "It gives a discount to the type of person that communities would want buying in their communities instead of [a HUD home] going to an investor."

"Our goal is to enlist our community builders, who are HUD's representatives in the neighborhoods, across the county to engage school officials, educators, teachers unions -- the whole range of mechanisms to get the word out," said Apgar. He predicts that when the program becomes operational, "the applications will pour in."

Tom Jaudan, chief of the city's Homeownership Institute, welcomed the initiative. "It is good that HUD is trying to find a way to expand the sale of their inventory," said Jaudan.

"That is encouraging because oftentimes a HUD house is a vacant property, and it is advantageous to us to have that property sold and occupied in that neighborhood."

Jaudan compared the program to a $5,000 free-loan plan that has helped 175 city employees purchase homes in the city since November. Sixty-five purchases have been made by teachers and 10 by police officers, he said.

For more information on the Teacher Next Door program call 800-483-7342.

Revitalization zones

In Baltimore, revitalization areas are designated in ZIP codes: 21202, 21205, 21206, 21207, 21213, 21214, 21215, 21216, 21217, 21218, 21221, 21222, 21223, 21224, 21225, 21226, 21229, 21230, 21231, 21037.

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