CUOMO SAYS TEACHER NEXT DOOR INITIATIVE WILL ENABLE TEACHERS IN NEW YORK TO BUY HUD-OWNED HOMES FOR HALF-PRICE

NEW YORK - The Department of Housing and Urban Development's Teacher Next Door initiative will enable public and private school teachers to buy HUD-owned homes for half-price in economically distressed neighborhoods in New York State, in a move to help revitalize communities, Secretary Andrew Cuomo said today.

HUD's current inventory of Teacher Next Door homes in New York State is made up of 997 single-family houses, townhouses and condominiums, including 232 in New York City. Other cities in New York State with homes that can be purchased under the initiative include: Albany, Bay Shore, Binghamton, Brentwood, Buffalo, Central Islip, Dunkirk, Freeport, Hempstead, Jamestown, Kingston, Mastic, Mastic Beach, Niagara Falls, Poughkeepsie, Rensselaer, Rochester, Roosevelt, Schenectady, Syracuse, Troy, Utica, and Wyandanch.

Under the initiative, homes are offered for sale to teachers at 50 percent discounts off their advertised list price. The same group of homes are available for sale to police officers at half-price under HUD's companion Officer Next Door initiative.

In addition to the 50 percent discount on the price of a home, teachers buying homes with mortgages insured by the Federal Housing Administration, which is part of HUD, can make the purchases with downpayments as low as $100 under the Teacher Next Door initiative. FHA can also insure mortgages that cover costs of rehabilitating homes in need of repair.

Cuomo made today's announcement at the Carter G. Woodson School in Clinton Hill, Brooklyn. He was joined by Congressman Ed Towns, United Federation of Teachers President Randi Weingarten, and Carter G. Woodson principal Patricia Singleton.

"By making it more attractive for teachers to live and work in school districts where they're needed most, we can build better futures for children and neighborhoods in need," Cuomo said. "A good teacher can make a great neighbor - as a mentor, an inspiring role model and as a living link between the classroom and the community."

Towns said: "This initiative to make it affordable for teachers to live in the neighborhoods where they teach will enhance the economic incentive in legislation I will soon introduce for teachers working in the areas of greatest need. Specifically, I will introduce legislation to create Educational Empowerment Zones, premised on the idea that giving teachers meaningful incentives to live in the communities where they teach will improve the educational opportunities for children in low income areas."

Towns' legislation will provide for the establishment of federally designated areas where federal aid and private funding can be targeted to increase teacher salaries, to provide for loan forgiveness, and to enhance teacher-training opportunities.

Weingarten said: "New York City is facing a tremendous teacher shortage. By the Board of Education's own estimate, some 54,000 teachers will be needed over the next five years. This initiative will be a significant incentive for teachers to consider taking - and keeping - positions in our public schools. With the rising cost of housing placing home ownership beyond the reach of our members, we need incentives to attract good educators. This program says we are committed to our public schools, and it sends a message that we value teachers as teachers and as part of our communities."

New York City Board of Education Chancellor, Harold O. Levy said: "As we work to increase the ranks of qualified teachers working in the New York City Public Schools, initiatives like Secretary Cuomo's Teacher Next Door program certainly will help our efforts. I hope many New York City teachers will take advantage of the program."

New York City Board of Education President, William C. Thompson, Jr. said: "The New York City Board of Education applauds HUD's 'Teacher Next Door' initiative for making the American dream a possibility for teachers here in New York City as well as around the country. The program is a "win-win" for our community. Teachers get homeownership opportunities, young people get excellent roll models, and we get an added tool for recruiting new teachers."

Homes offered for sale under the Teacher Next Door and Officer Next Door initiatives come into HUD's possession when the Federal Housing Administration acquires homes through foreclosure when homeowners are unable to make mortgage payments. Police officers have bought more than 3,500 homes under the Officer Next Door initiative, which was announced in 1997. Teachers have bought more than 77 homes under the HUD program in just the last two months.

In New York State, there are 122 HUD-designated revitalization areas with 53 in New York City. Across the country, there are 716 HUD-designated revitalization areas in the District of Columbia and the following 33 states: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.

The 50 percent Teacher Next Door discount is available to state-certified teachers and administrators, grades kindergarten through 12, who are employed full-time by a public or private school or educational agency. Each teacher must live in the home he or she buys for at least three years as his or her sole residence, and the home must be in a HUD-designated revitalization area served by the school district that employs the teacher.

Teachers may buy homes directly from HUD, use real estate agents, or acquire homes through local governments or not-for-profit groups that have purchased the homes from HUD.

The Federal Housing Administration currently insures about 6.7 million mortgages. When homeowners fail to make their mortgage payments, FHA first tries to help them stay in their homes through foreclosure avoidance. If that is not successful, the lender forecloses on a home and conveys it to FHA in exchange for FHA payment of the outstanding balance on the mortgage. FHA then puts the home up for sale. Over the past six months, some 39,000 HUD homes have been sold.

The Teacher Next Door initiative does not cost taxpayers any money, because FHA is funded by mortgage insurance premiums rather than tax revenue. Cost-saving management improvements allow FHA to reduce the price of homes to teachers. An independent report issued earlier this year by the accounting firm of Deloitte & Touche concluded that FHA's mutual mortgage insurance fund is in its strongest financial condition since it was created in 1934, with a record economic value of $16.6 billion.

The Teacher Next Door revitalization areas in The Bronx are zip code areas 10451,10452, 10453, 10454, 10455, 10456, 10457, 10459, 10460, 10468, 10472, 10473 and 10474. In Brooklyn, the revitalization areas are 11205, 11206, 11207, 11208, 11210, 11212, 11213, 11216, 11217, 11220, 11221, 11224, 11231, 11233, 11237 and 11238. In Manhattan, the revitalization areas are 10002, 10026, 10027, 10029, 10030, 10031, 10032, 10033, 10036, 10037 and 10038. In Queens, the revitalization areas are 11412, 11420, 11429, 11432, 11433, 11435, 11436, 11691 and 11692. On Staten Island, the revitalization areas are 10301, 10302, 10304 and 10310.