The U.S. Department of Housing and Urban Development announced today that it is resuming its Officer Next Door and Teacher Next Door home sales programs after taking a number of corrective measures to prevent homebuyer fraud.

HUD suspended the programs on April 1 following nine felony convictions and 15 indictments involving police officers that purchased homes. The Agency’s Inspector General also released a critical report indicating the programs’ management controls were inadequate.

The programs offer police officers and teachers a 50 percent discount on HUD-owned, single family homes in certain designated revitalization areas. The homes become available to HUD after homeowners default on their FHA-insured mortgages.

“These programs can play an important role in helping to revitalize communities,” said HUD Secretary Mel Martinez. “While most of officers and teachers who purchase houses through these programs play by the rules, there is no doubt we needed to implement more oversight and tighten controls in the program.”

Martinez expects that heightened program controls will greatly reduce or eliminate future program abuse, and that ongoing investigation by HUD's Inspector General will result in additional charges being filed against some individuals who had purchased homes under these programs in the past".

Since HUD created the officer and teacher programs in 1997 and 2000, respectively, approximately 6,000 police officers and teachers in 41 states and the District of Columbia have purchased the homes.

To be eligible, law enforcement officers and teachers must be employed full-time and agree to make the homes their sole residence for three years following the purchase. In addition, teachers must work in the areas in which the homes are located.

Published: August 2, 2001

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