[Federal Register: December 7, 1999 (Volume 64, Number 234)] [Notices] [Page 68370-68371] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr07de99-82] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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