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.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Housing Affordability for Teachers 
and Public Safety Officers Act of 2005''.

SEC. 2. PILOT PROGRAM FOR REDUCED FHA 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:
            ``(10) Reduced downpayment requirements for teachers and 
        public safety officers.--
                    ``(A) In general.--Notwithstanding paragraph (2), 
                in the case of a mortgage described in subparagraph 
                (B)--
                            ``(i) the mortgage shall involve a 
                        principal obligation in an amount that does not 
                        exceed the sum of 99 percent of the appraised 
                        value of the property and the total amount of 
                        initial service charges, appraisal, inspection, 
                        and other fees (as the Secretary shall approve) 
                        paid in connection with the mortgage;
                            ``(ii) no other provision of this 
                        subsection 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 insurance of the 
                                mortgage, had any present ownership 
                                interest in a principal residence 
                                located in the jurisdiction described 
                                in clause (ii); and
                            ``(ii) made for a property that is located 
                        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 mortgagor 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 
                                ambulance agency that employs the 
                                mortgagor.
                    ``(C) Program integrity.--Notwithstanding any other 
                provision of this paragraph and section 203(c)(3), the 
                Secretary may suspend the applicability of this 
                paragraph and such section for such period as the 
                Secretary considers appropriate if the Secretary 
                determines such suspension is necessary because of 
                fraud or other issues regarding program integrity.
                    ``(D) Pilot program limitations.--
                            ``(i) Annual.--In any fiscal year, the 
                        aggregate number of mortgages insured under 
                        this paragraph may not exceed 10 percent of the 
                        aggregate number of mortgages and loans insured 
                        by the Secretary under this title during the 
                        preceding fiscal year.
                            ``(ii) Term of program.--The aggregate 
                        number or mortgages insured under this 
                        paragraph may not exceed 50,000.''.
    (b) Deferral and Reduction of Up-Front Premium.--Section 203(c) of 
the National Housing Act (12 U.S.C. 1709(c)) 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 premium.--In the 
        case of any mortgage described in subsection (b)(10)(B)--
                    ``(A) paragraph (2)(A) of this subsection (relating 
                to collection of up-front premium payments) shall not 
                apply; and
                    ``(B) if, at any time during the 5-year period 
                beginning on the date of the insurance of the mortgage, 
                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 mortgage 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 completed during such 5-year period before such 
                cessation or prepayment occurs.''.
    (c) Definitions.--Section 201 of the National Housing Act (12 
U.S.C. 1707) is amended--
            (1) in subsection (a), by redesignating clauses (1) and (2) 
        as clauses (A) and (B), respectively;
            (2) by redesignating subsections (a) through (f) as 
        paragraphs (1) through (6), respectively;
            (3) by realigning each such paragraph 2 ems from the left 
        margin; and
            (4) 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 Omnibus Crime Control 
        and Safe Streets Act of 1968 (42 U.S.C. 3796b).
            ``(8) The term `teacher' means an individual who is 
        employed on a part- or full-time basis as a teacher, teacher 
        assistant, 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 include 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).''.
    (d) Regulations.--Not later than 60 days after the date of the 
enactment of this Act, the Secretary shall issue regulations to 
implement the amendments made by this section.

SEC. 3. PILOT PROGRAM FOR PUBLIC SAFETY OFFICER HOME OWNERSHIP IN AT-
              RISK AREAS.

    (a) Program Authority.--The Secretary of Housing and Urban 
Development shall carry out a pilot program in accordance with this 
section to assist Federal, State, and local public safety officers 
purchasing homes in locally-designated at-risk 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 officer purchases a 
home in locally-designated at-risk 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 Secretary.
                    (B) Purchase price exceeds value.--If the purchase 
                price of the property exceeds the reasonable value of 
                the property, as determined by the Secretary, the 
                required downpayment shall be the difference between 
                such reasonable 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 at-Risk Areas.--
            (1) Criteria.--Any unit of local government may request 
        that the Secretary designate any area within the jurisdiction 
        of that unit of local government as a locally-designated at-
        risk area for purposes of this section if the proposed area--
                    (A) has a crime rate that is significantly higher 
                than the crime rate of the non-designated 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 within the 
                jurisdiction of the unit of local government.
            (2) Deadline for consideration of request.--Not later than 
        60 days after receiving a request under paragraph (1), the 
        Secretary shall approve 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) (as amended by section 
2(c) of this Act).
    (f) Program Integrity.--Notwithstanding any other provision of this 
section, the Secretary may suspend the applicability of this section 
for such period as the Secretary considers appropriate if the Secretary 
determines such suspension is necessary because of fraud or other 
issues regarding program integrity.
    (g) Regulations.--Not later than 60 days after the date of the 
enactment of this Act, the Secretary shall issue regulations to 
implement the provisions of this section.
    (h) Sunset.--The Secretary shall not approve any application for 
assistance under this section that is received 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.

Summary: Housing Affordability for Teachers and Public Safety Officers Act of 2005 - Amends the National Housing Act to provide for one percent downpayments (and deferral and reduction of up-front payments) for Federal Housing Administration (FHA) mortgage loans for qualified elementary and secondary school teachers, teacher assistants, and administrators and public safety officers (as defined by the Omnibus Crime Control and Safe Streets Act of 1968) to purchase homes within the jurisdictions of their employing agencies. Authorizes program suspension for fraud or program integrity issues. Limits aggregate mortgages insured under such program to 50,000.

Directs the Secretary of Housing and Urban Development to carry out a mortgage assistance pilot program to assist federal, state, and local public safety officers purchase primary residences in locally-designated at-risk areas. Authorizes program suspension for fraud or program integrity issues. Prohibits application approvals after the expiration of the three-year period beginning on the date that the Secretary first makes program assistance available.