I
107TH CONGRESS
1ST SESSION
H. R. 3191
To provide home ownership assistance for public safety officers and teachers.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 31, 2001
Mrs. ROUKEMA (for herself, Mr. LAFALCE, Mr. LEACH, and Mr. GREEN of
Wisconsin) introduced the following bill; which was referred to the Com-
mittee on Financial Services
A BILL
To provide home ownership assistance for public safety
officers and teachers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Home Ownership Op-
portunities for Public Safety Officers and Teachers Act
of 2001’’.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that—
(1) teachers, law enforcement officers, fire
fighters, and rescue personnel help form the back-
bones of communities and are integral components
in the social capital of neighborhoods in the United
States; and
(2) providing reduced downpayment require-
ments on HUD-insured properties and discounted
purchase prices on HUD-owned properties for teach-
ers, law enforcement officers, fire fighters, and res-
cue personnel recognizes the intrinsic value of the
services provided by such employees to their commu-
nities and to family life and encourages and rewards
those who are dedicated to providing public service
in our most needy communities.
SEC. 3. REDUCED DOWNPAYMENT REQUIREMENTS FOR
LOANS FOR TEACHERS AND PUBLIC SAFETY
OFFICERS.
(a) IN GENERAL.—Section 203(b) of the National
Housing Act (12 U.S.C. 1709(b)) is amended by adding
at the end the following new paragraph:
‘‘(11) 
REDUCED
DOWNPAYMENT
REQUIRE-
MENTS FOR TEACHERS AND PUBLIC SAFETY OFFI-
CERS.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (2), in the case of a mortgage described
in subparagraph (B)—
‘‘(i) the mortgage shall involve a prin-
cipal obligation in an amount that does not
exceed the sum of 99 percent of the ap-
praised value of the property and the total
amount of initial service charges, ap-
praisal, inspection, and other fees (as the
Secretary shall approve) paid in connection
with the mortgage;
‘‘(ii) no other provision of this sub-
section limiting the principal obligation of
the mortgage based upon a percentage of
the appraised value of the property subject
to the mortgage shall apply; and
‘‘(iii) the matter in paragraph (9) that
precedes the first proviso shall not apply
and the mortgage shall be executed by a
mortgagor who shall have paid on account
of the property at least 1 percent of the
cost of acquisition (as determined by the
Secretary) in cash or its equivalent.
‘‘(B) MORTGAGES COVERED.—A mortgage
described in this subparagraph is a mortgage—
‘‘(i) under which the mortgagor is an
individual who—
‘‘(I) is (aa) a teacher, or (bb) a
public safety officer; and
‘‘(II) has not, during the 12-
month period ending upon the insur-
ance of the mortgage, had any present
ownership interest in a principal resi-
dence located in the jurisdiction de-
scribed in clause (ii); and
‘‘(ii) made for a property that is lo-
cated within the jurisdiction of—
‘‘(I) in the case of a mortgage of
a mortgagor described in clause
(i)(I)(aa), the local educational agency
for the school in which the mortgagor
is employed (or, in the case of a mort-
gagor employed in a private school,
the local educational agency having
jurisdiction for the area in which the
private school is located); or
‘‘(II) in the case of a mortgage of
a mortgagor described in clause
(i)(I)(bb), the jurisdiction served by
the public law enforcement agency,
firefighting agency, or rescue or am-
bulance agency that employs the
mortgagor.’’.
(b) DEFERRAL AND REDUCTION OF UP-FRONT PRE-
MIUM.—Section 203(c) of the National Housing Act (12
U.S.C. 1709(c)(2)) is amended—
(1) in paragraph (2), in the matter preceding
subparagraph (A), by striking ‘‘Notwithstanding’’
and inserting ‘‘Except as provided in paragraph (3)
and notwithstanding’’; and
(2) by adding at the end the following new
paragraph:
‘‘(3) DEFERRAL AND REDUCTION OF UP-FRONT PRE-
MIUM.—In the case of any mortgage described in sub-
section (b)(11)(B):
‘‘(A) Paragraph (2)(A) of this subsection (relat-
ing to collection of up-front premium payments)
shall not apply.
‘‘(B) If, at any time during the 5-year period
beginning on the date of the insurance of the mort-
gage, the mortgagor ceases to be a teacher or public
safety officer (as such terms are defined in section
201) or pays the principal obligation of the mort-
gage in full, the Secretary shall at such time collect
a single premium payment in an amount equal to
the amount of the single premium payment that, but
for this paragraph, would have been required under
paragraph (2)(A) of this subsection with respect to
the mortgage, as reduced by 20 percent of such
amount for each successive 12-month period com-
pleted during such 5-year period before such ces-
sation or prepayment occurs.’’.
SEC. 4. COMMUNITY PARTNERS NEXT DOOR PROGRAM.
(a) DISCOUNT AND DOWNPAYMENT ASSISTANCE FOR
TEACHERS
AND PUBLIC SAFETY OFFICERS.—Section
204(h) of the National Housing Act (12 U.S.C. 1710(h))
is amended—
(1) by redesignating paragraphs (7) through
(10) as paragraphs (8) through (11), respectively;
and
(2) by inserting after paragraph (6) the fol-
lowing new paragraph:
‘‘(7) 50 PERCENT
DISCOUNT
FOR
TEACHERS
AND PUBLIC SAFETY OFFICERS PURCHASING PROP-
ERTIES THAT ARE ELIGIBLE ASSETS.—
‘‘(A) DISCOUNT.—A property that is an el-
igible asset and is sold, during fiscal years 2002
through 2006, to a teacher or public safety offi-
cer for use in accordance with subparagraph
(B) shall be sold at a price that is equal to 50
percent of the appraised value of the eligible
property (as determined in accordance with
paragraph (6)(B)). In the case of a property el-
igible for both a discount under this paragraph
and a discount under paragraph (6), the dis-
count under paragraph (6) shall not apply.
‘‘(B) PRIMARY
RESIDENCE.—An eligible
property sold pursuant to a discount under this
paragraph shall be used, for not less than the
3-year period beginning upon such sale, as the
primary residence of a teacher or public safety
officer.
‘‘(C) SALE METHODS.—The Secretary may
sell an eligible property pursuant to a discount
under this paragraph—
‘‘(i) to a unit of general local govern-
ment or nonprofit organization (pursuant
to paragraph (4) or otherwise), for resale
or transfer to a teacher or public safety of-
ficer; or
‘‘(ii) directly to a purchaser who is a
teacher or public safety officer.
‘‘(D) RESALE.—In the case of any pur-
chase by a unit of general local government or
nonprofit organization of an eligible property
sold at a discounted price under this paragraph,
the sale agreement under paragraph (8) shall—
‘‘(i) require the purchasing unit of
general local government or nonprofit or-
ganization to provide the full benefit of the
discount to the teacher or public safety of-
ficer obtaining the property; and
‘‘(ii) in the case of a purchase involv-
ing multiple eligible assets, any of which is
such an eligible property, designate the
specific eligible property or properties to be
subject to the requirements of subpara-
graph (B).
‘‘(E) MORTGAGE
DOWNPAYMENT
ASSIST-
ANCE.—If a teacher or public safety officer pur-
chases an eligible property pursuant to a dis-
counted sale price under this paragraph and fi-
nances such purchase through a mortgage in-
sured under this title, notwithstanding any pro-
vision of section 203 the downpayment on such
mortgage shall be $100.
‘‘(F) PREVENTION OF UNDUE PROFIT.—
The Secretary shall issue regulations to prevent
undue profit from the resale of eligible prop-
State, and local public safety officers purchasing homes
in locally-designated high-crime areas.
(b) ELIGIBILITY.—To be eligible for assistance under
this section, a public safety officer shall agree, in writing,
to use the residence purchased with such assistance as the
primary residence of the public safety officer for not less
than 3 years after the date of purchase.
(c) MORTGAGE ASSISTANCE.—If a public safety offi-
cer purchases a home in locally-designated high-crime area
and finances such purchase through a mortgage insured
under title II of the National Housing Act (12 U.S.C.
1707 et seq.), notwithstanding any provision of section
203 or any other provision of the National Housing Act,
the following shall apply:
(1) DOWNPAYMENT.—
(A) IN
GENERAL.—There shall be no
downpayment required if the purchase price of
the property is not more than the reasonable
value of the property, as determined by the Sec-
retary.
(B) PURCHASE PRICE EXCEEDS VALUE.—
If the purchase price of the property exceeds
the reasonable value of the property, as deter-
mined by the Secretary, the required downpay-
ment shall be the difference between such rea-
sonable value and the purchase price.
(2) CLOSING
COSTS.—The closing costs and
origination fee for such mortgage may be included in
the loan amount.
(3) INSURANCE
PREMIUM
PAYMENT.—There
shall be one insurance premium payment due on the
mortgage. Such insurance premium payment—
(A) shall be equal to 1 percent of the loan
amount;
(B) shall be due and considered earned by
the Secretary at the time of the loan closing;
and
(C) may be included in the loan amount
and paid from the loan proceeds.
(d) LOCAL DESIGNATION OF HIGH-CRIME AREAS.—
(1) CRITERIA.—Any unit of local government
may request that the Secretary designate any area
within the jurisdiction of that unit of local govern-
ment as a locally-designated high-crime area for pur-
poses of this section if the proposed area—
(A) has a crime rate that is significantly
higher than the crime rate of the non-des-
ignated area that is within the jurisdiction of
the unit of local government; and
(B) has a population that is not more than
25 percent of the total population of area with-
in the jurisdiction of the unit of local govern-
ment.
(2) DEADLINE
FOR
CONSIDERATION
OF
RE-
QUEST.—Not later than 60 days after receiving a re-
quest under paragraph (1), the Secretary shall ap-
prove or disapprove the request.
(e) PUBLIC SAFETY OFFICER.—For purposes of this
section, the term ‘‘public safety officer’’ has the meaning
given such term in section 201 of the National Housing
Act (12 U.S.C. 1707), except that such term includes any
officer serving a public agency of the Federal Government.
(f) SUNSET.—The Secretary shall not approve any
application for assistance under this section that is re-
ceived by the Secretary after the expiration of the 3-year
period beginning on the date that the Secretary first
makes available assistance under the pilot program under
this section.
SEC. 6. DEFINITIONS.
Section 201 of the National Housing Act (12 U.S.C.
1707) is amended—
(1) by redesignating subsections (a) through (f)
as paragraphs (1) through (6), respectively;
(2) by realigning each paragraph÷ 2 ems from
the left margin; and
(3) by adding at the end the following new
paragraphs:
‘‘(7) The term ‘public safety officer’ has the
meaning given such term in section 1204 of the Om-
nibus Crime Control and Safe Streets Act of 1968
(42 U.S.C. 3796b), except that such term shall not
include any officer serving a public agency of the
Federal Government.
‘‘(8) The term ‘teacher’ means an individual
who is employed on a part- or full-time basis as a
teacher or administrator in a public or private school
that provides elementary or secondary education, as
determined under State law, except that elementary
education shall include pre-Kindergarten education,
and except that secondary education shall not in-
clude any education beyond grade 12.
‘‘(9) The term ‘local educational agency’ has
the meaning given such term in section 14101 of the
Elementary and Secondary Education Act of 1965
(20 U.S.C. 8801)).’’.
SEC. 7. REGULATIONS.
Not later than 60 days after the date of the enact-
ment of this Act, the Secretary shall issue regulations to
implement the provisions of this Act and the amendments
made by this Act.
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