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[DOCID: f:h3191ih.txt]






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 
                    Committee 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Ownership Opportunities 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 backbones of communities and are 
        integral components in the social capital of neighborhoods in 
        the United States; and
            (2) providing reduced downpayment requirements on HUD-
        insured properties and discounted purchase prices on HUD-owned 
        properties for teachers, law enforcement officers, fire 
        fighters, and rescue personnel recognizes the intrinsic value 
        of the services provided by such employees to their communities 
        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 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.''.
    (b) Deferral and Reduction of Up-Front Premium.--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 premium.--In the case of 
any mortgage described in subsection (b)(11)(B):
            ``(A) Paragraph (2)(A) of this subsection (relating 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 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.''.

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 following new 
        paragraph:
            ``(7) 50 percent discount for teachers and public safety 
        officers purchasing properties that are eligible assets.--
                    ``(A) Discount.--A property that is an eligible 
                asset and is sold, during fiscal years 2002 through 
                2006, to a teacher or public safety officer 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 eligible for both a discount under this 
                paragraph and a
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 discount under paragraph (6), the 
                discount 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 government 
                        or nonprofit organization (pursuant to 
                        paragraph (4) or otherwise), for resale or 
                        transfer to a teacher or public safety officer; 
                        or
                            ``(ii) directly to a purchaser who is a 
                        teacher or public safety officer.
                    ``(D) Resale.--In the case of any purchase 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 
                        organization to provide the full benefit of the 
                        discount to the teacher or public safety 
                        officer obtaining the property; and
                            ``(ii) in the case of a purchase involving 
                        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 subparagraph (B).
                    ``(E) Mortgage downpayment assistance.--If a 
                teacher or public safety officer purchases an eligible 
                property pursuant to a discounted sale price under this 
                paragraph and finances such purchase through a mortgage 
                insured under this title, notwithstanding any provision 
                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 properties in violation of the 
                requirement under subparagraph (B).
                    ``(G) Definitions.--For the purposes of this 
                paragraph, the following definitions shall apply:
                            ``(i) The term `eligible property' means an 
                        eligible asset described in paragraph (2)(A) of 
                        this subsection.
                            ``(ii) The terms `teacher' and `public 
                        safety officer' have the meanings given such 
                        terms in section 201.''.
    (b) Conforming Amendments.--Section 204(h) of the National Housing 
Act (12 U.S.C. 1710(h)) is amended--
            (1) in paragraph (4)(B)(ii), by striking ``paragraph (7)'' 
        and inserting ``paragraph (8)'';
            (2) in paragraph (5)(B)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraph (8)''; and
            (3) in paragraph (6)(A), by striking ``paragraph (8)'' and 
        inserting ``paragraph (9)''.

SEC. 5. PUBLIC SAFETY OFFICER HOME OWNERSHIP IN HIGH-CRIME 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 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 officer 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 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 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 government as a locally-designated high-
        crime 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), 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 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.

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<divide> 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 Omnibus 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 i
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        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 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)).''.

SEC. 7. 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 Act and the amendments made by this Act.
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