|HUD No. 00-50|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||12:30 p.m. Monday|
|Or contact your local HUD office||March 13, 2000|
CUOMO SAYS TEACHER NEXT DOOR INITIATIVE WILL ENABLE THOUSANDS OF TEACHERS TO BUY HUD-OWNED HOMES FOR HALF-PRICE
WASHINGTON - The Department of Housing and Urban Development's Teacher Next Door initiative will enable thousands of teachers to buy HUD-owned homes for half-price in economically distressed neighborhoods in the school districts where they work, in a move to help revitalize communities, Secretary Andrew Cuomo said today.
The Teacher Next Door initiative will offer an estimated 8,000 to 10,000 single-family houses, townhouses and condominiums for sale to teachers at 50 percent discounts every year in HUD-designated revitalization areas. These areas are low- and moderate-income neighborhoods that often have many vacant properties, but are considered good candidates for economic development and improvement. 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.
President Clinton said: "Teachers enrich the lives of our children and the lives of our communities - and they can make the greatest difference when they live in the same communities in which they teach. The Teacher Next Door initiative gives teachers who work in our nation's distressed neighborhoods the incentive and financial means to become homeowners in these communities. Just as HUD's Officer Next Door initiative has been tremendously successful for communities and the officers who serve in them, the Teacher Next Door initiative will be good for teachers and schools in challenged neighborhoods across the nation."
Cuomo said: "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. 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."
Cuomo made today's announcement at Burrville Elementary School, located in a revitalization area in Washington. He was joined by Burrville Principal Gwendolyn Baccus and leaders of the nation's two largest teacher unions - American Federation of Teachers President Sandra Feldman and National Education Association President Robert Chase.
Feldman said: "HUD's Teacher Next Door initiative will help teachers buy a home and live in the community where they teach. It is an innovative, positive program that will benefit teachers, the children they educate and the communities they serve."
Chase said: "Secretary Cuomo's Teacher Next Door initiative is smart, community-friendly government at its best. It says that HUD values our teachers in a special way and is ready to help them get a piece of the American dream. I strongly encourage teachers to apply."
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 3,300 homes under the Officer Next Door initiative, which was announced in 1997.
There are 671 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, grades kindergarten through 12, who are employed full-time by a 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 month 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.