I 

109TH CONGRESS 

1ST SESSION H. R. 3556 

To authorize the Secretary of Housing and Urban Development to carry 

out pilot programs to insure low-downpayment mortgages to enable teachers and public safety officers to purchase homes in the jurisdictions 

they serve and to assist Federal, State, and local public safety officers 

purchasing homes in locally-designated at-risk areas. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 28, 2005 

Ms. HARRIS introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To authorize the Secretary of Housing and Urban Development to carry out pilot programs to insure low-downpayment mortgages to enable teachers and public safety 

officers to purchase homes in the jurisdictions they serve 

and to assist Federal, State, and local public safety 

officers purchasing homes in locally-designated at-risk 

areas. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Housing Affordability 

5 for Teachers and Public Safety Officers Act of 2005’’. 
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1 SEC. 2. PILOT PROGRAM FOR REDUCED FHA DOWNPAY2 MENT REQUIREMENTS FOR LOANS FOR 

3 TEACHERS AND PUBLIC SAFETY OFFICERS. 

4 (a) IN GENERAL.—Section 203(b) of the National 

5 Housing Act (12 U.S.C. 1709(b)) is amended by adding 

6 at the end the following new paragraph: 

7 ‘‘(10) REDUCED DOWNPAYMENT REQUIRE8 MENTS FOR TEACHERS AND PUBLIC SAFETY OFFI9 CERS.— 

10 ‘‘(A) IN GENERAL.—Notwithstanding para11 graph (2), in the case of a mortgage described 

12 in subparagraph (B)— 

13 ‘‘(i) the mortgage shall involve a prin14 cipal obligation in an amount that does not 

15 exceed the sum of 99 percent of the ap16 praised value of the property and the total 

17 amount of initial service charges, ap18 praisal, inspection, and other fees (as the 

19 Secretary shall approve) paid in connection 

20 with the mortgage; 

21 ‘‘(ii) no other provision of this sub22 section limiting the principal obligation of 

23 the mortgage based upon a percentage of 

24 the appraised value of the property subject 

25 to the mortgage shall apply; and 
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1 ‘‘(iii) the matter in paragraph (9) that 

2 precedes the first proviso shall not apply 

3 and the mortgage shall be executed by a 

4 mortgagor who shall have paid on account 

5 of the property at least 1 percent of the 

6 cost of acquisition (as determined by the 

7 Secretary) in cash or its equivalent. 

8 ‘‘(B) MORTGAGES COVERED.—A mortgage 

9 described in this subparagraph is a mortgage— 

10 ‘‘(i) under which the mortgagor is an 

11 individual who— 

12 ‘‘(I) is (aa) a teacher, or (bb) a 

13 public safety officer; and 

14 ‘‘(II) has not, during the 12- 

15 month period ending upon the insur16 ance of the mortgage, had any present 

17 ownership interest in a principal resi18 dence located in the jurisdiction de19 scribed in clause (ii); and 

20 ‘‘(ii) made for a property that is lo21 cated within the jurisdiction of— 

22 ‘‘(I) in the case of a mortgage of 

23 a mortgagor described in clause 

24 (i)(I)(aa), the local educational agency 

25 for the school in which the mortgagor 
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1 is employed (or, in the case of a mort2 gagor employed in a private school, 

3 the local educational agency having 

4 jurisdiction for the area in which the 

5 private school is located); or 

6 ‘‘(II) in the case of a mortgage of 

7 a mortgagor described in clause 

8 (i)(I)(bb), the jurisdiction served by 

9 the public law enforcement agency, 

10 firefighting agency, or rescue or am11 bulance agency that employs the 

12 mortgagor. 

13 ‘‘(C) PROGRAM INTEGRITY.—Notwith14 standing any other provision of this paragraph 

15 and section 203(c)(3), the Secretary may sus16 pend the applicability of this paragraph and 

17 such section for such period as the Secretary 

18 considers appropriate if the Secretary deter19 mines such suspension is necessary because of 

20 fraud or other issues regarding program integ21 rity. 

22 ‘‘(D) PILOT PROGRAM LIMITATIONS.— 

23 ‘‘(i) ANNUAL.—In any fiscal year, the 

24 aggregate number of mortgages insured 

25 under this paragraph may not exceed 10 
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1 percent of the aggregate number of mort2 gages and loans insured by the Secretary 

3 under this title during the preceding fiscal 

4 year. 

5 ‘‘(ii) TERM OF PROGRAM.—The aggre6 gate number or mortgages insured under 

7 this paragraph may not exceed 50,000.’’. 

8 (b) DEFERRAL AND REDUCTION OF UP-FRONT PRE9 MIUM.—Section 203(c) of the National Housing Act (12 

10 U.S.C. 1709(c)) is amended— 

11 (1) in paragraph (2), in the matter preceding 

12 subparagraph (A), by striking ‘‘Notwithstanding’’ 

13 and inserting ‘‘Except as provided in paragraph (3) 

14 and notwithstanding’’; and 

15 (2) by adding at the end the following new 

16 paragraph: 

17 ‘‘(3) DEFERRAL AND REDUCTION OF UP-FRONT

18 PREMIUM.—In the case of any mortgage described in 

19 subsection (b)(10)(B)— 

20 ‘‘(A) paragraph (2)(A) of this subsection 

21 (relating to collection of up-front premium pay22 ments) shall not apply; and 

23 ‘‘(B) if, at any time during the 5-year pe24 riod beginning on the date of the insurance of 

25 the mortgage, the mortgagor ceases to be a 
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1 teacher or public safety officer (as such terms 

2 are defined in section 201) or pays the principal 

3 obligation of the mortgage in full, the Secretary 

4 shall at such time collect a single premium pay5 ment in an amount equal to the amount of the 

6 single premium payment that, but for this para7 graph, would have been required under para8 graph (2)(A) of this subsection with respect to 

9 the mortgage, as reduced by 20 percent of such 

10 amount for each successive 12-month period 

11 completed during such 5-year period before 

12 such cessation or prepayment occurs.’’. 

13 (c) DEFINITIONS.—Section 201 of the National 

14 Housing Act (12 U.S.C. 1707) is amended— 

15 (1) in subsection (a), by redesignating clauses 

16 (1) and (2) as clauses (A) and (B), respectively; 

17 (2) by redesignating subsections (a) through (f) 

18 as paragraphs (1) through (6), respectively; 

19 (3) by realigning each such paragraph 2 ems 

20 from the left margin; and 

21 (4) by adding at the end the following new 

22 paragraphs: 

23 ‘‘(7) The term ‘public safety officer’ has the 

24 meaning given such term in section 1204 of the Om-
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1 nibus Crime Control and Safe Streets Act of 1968 

2 (42 U.S.C. 3796b). 

3 ‘‘(8) The term ‘teacher’ means an individual 

4 who is employed on a part- or full-time basis as a 

5 teacher, teacher assistant, or administrator in a pub6 lic or private school that provides elementary or sec7 ondary education, as determined under State law, 

8 except that elementary education shall include pre9 Kindergarten education, and except that secondary 

10 education shall not include any education beyond 

11 grade 12. 

12 ‘‘(9) The term ‘local educational agency’ has 

13 the meaning given such term in section 14101 of the 

14 Elementary and Secondary Education Act of 1965 

15 (20 U.S.C. 8801).’’. 

16 (d) REGULATIONS.—Not later than 60 days after the 

17 date of the enactment of this Act, the Secretary shall issue 

18 regulations to implement the amendments made by this 

19 section. 

20 SEC. 3. PILOT PROGRAM FOR PUBLIC SAFETY OFFICER 

21 HOME OWNERSHIP IN AT-RISK AREAS. 

22 (a) PROGRAM AUTHORITY.—The Secretary of Hous23 ing and Urban Development shall carry out a pilot pro24 gram in accordance with this section to assist Federal, 
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1 State, and local public safety officers purchasing homes 

2 in locally-designated at-risk areas. 

3 (b) ELIGIBILITY.—To be eligible for assistance under 

4 this section, a public safety officer shall agree, in writing, 

5 to use the residence purchased with such assistance as the 

6 primary residence of the public safety officer for not less 

7 than 3 years after the date of purchase. 

8 (c) MORTGAGE ASSISTANCE.—If a public safety offi9 cer purchases a home in locally-designated at-risk area 

10 and finances such purchase through a mortgage insured 

11 under title II of the National Housing Act (12 U.S.C. 

12 1707 et seq.), notwithstanding any provision of section 

13 203 or any other provision of the National Housing Act, 

14 the following shall apply: 

15 (1) DOWNPAYMENT.— 

16 (A) IN GENERAL.—There shall be no 

17 downpayment required if the purchase price of 

18 the property is not more than the reasonable 

19 value of the property, as determined by the Sec20 retary. 

21 (B) PURCHASE PRICE EXCEEDS VALUE.— 

22 If the purchase price of the property exceeds 

23 the reasonable value of the property, as deter24 mined by the Secretary, the required downpay-
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1 ment shall be the difference between such rea2 sonable value and the purchase price. 

3 (2) CLOSING COSTS.—The closing costs and 

4 origination fee for such mortgage may be included in 

5 the loan amount. 

6 (3) INSURANCE PREMIUM PAYMENT.—There 

7 shall be one insurance premium payment due on the 

8 mortgage. Such insurance premium payment— 

9 (A) shall be equal to 1 percent of the loan 

10 amount; 

11 (B) shall be due and considered earned by 

12 the Secretary at the time of the loan closing; 

13 and 

14 (C) may be included in the loan amount 

15 and paid from the loan proceeds. 

16 (d) LOCAL DESIGNATION OF AT-RISK AREAS.— 

17 (1) CRITERIA.—Any unit of local government 

18 may request that the Secretary designate any area 

19 within the jurisdiction of that unit of local govern20 ment as a locally-designated at-risk area for pur21 poses of this section if the proposed area— 

22 (A) has a crime rate that is significantly 

23 higher than the crime rate of the non-des24 ignated area that is within the jurisdiction of 

25 the unit of local government; and 
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1 (B) has a population that is not more than 

2 25 percent of the total population of area with3 in the jurisdiction of the unit of local govern4 ment. 

5 (2) DEADLINE FOR CONSIDERATION OF RE6 QUEST.—Not later than 60 days after receiving a re7 quest under paragraph (1), the Secretary shall ap8 prove or disapprove the request. 

9 (e) PUBLIC SAFETY OFFICER.—For purposes of this 

10 section, the term ‘‘public safety officer’’ has the meaning 

11 given such term in section 201 of the National Housing 

12 Act (12 U.S.C. 1707) (as amended by section 2(c) of this 

13 Act). 

14 (f) PROGRAM INTEGRITY.—Notwithstanding any 

15 other provision of this section, the Secretary may suspend 

16 the applicability of this section for such period as the Sec17 retary considers appropriate if the Secretary determines 

18 such suspension is necessary because of fraud or other 

19 issues regarding program integrity. 

20 (g) REGULATIONS.—Not later than 60 days after the 

21 date of the enactment of this Act, the Secretary shall issue 

22 regulations to implement the provisions of this section. 

23 (h) SUNSET.—The Secretary shall not approve any 

24 application for assistance under this section that is re25 ceived by the Secretary after the expiration of the 3-year 
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1 period beginning on the date that the Secretary first 

2 makes available assistance under the pilot program under 

3 this section. 

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