Federal housing authorities want to add "first responders" to a reconstituted program aimed at getting government-owned homes into the hands of workers who are seen as the key to improving the quality of life in distressed urban communities.

Under a proposed rule submitted earlier this month, firefighters and emergency medical technicians would join police officers and teachers in a new "Good Neighbor Next Door" sales program that would allow them to purchase foreclosed houses in designated neighborhoods at half their appraised values.

"This is an opportunity to turn a negative into a positive for many communities," said Joseph McCloskey, director of single-family asset management at the Department of Housing and Urban Development.

The program is designed to promote stability in distressed neighborhoods by encouraging law enforcement officers, teachers and now emergency responders, whose daily responsibilities "represent a nexus to the needs of the community," to live where they work.

It was started as the "Officer Next Door" in 1997 to promote safe neighborhoods. Then, two years later, the "Teachers Next Door" program was added to provide examples of how these "role models for a productive, responsible lifestyle" live their lives.

The two programs were shuttered for 120 days in 2001 to tighten provisions that allowed some participants to take advantage of the rules.

"We took down the program just long enough to add some internal controls to make sure participants lived in the communities where they were buying," McCloskey said.

An independent review last year of the OND program found that it was working as intended. "When a sufficient number of sales take place," the report said, "crime levels will be suppressed significantly."

In fiscal year 2005, policemen and teachers purchased 784 houses under the program. That's down somewhat from 1,174 houses is fiscal '04.

The plan to add emergency responders to the mix has been in the works for sometime, according to McCloskey.

"There is no reason for making a distinction," the HUD official said. "As with law enforcement officers and teachers, the daily responsibilities of firefighters and emergency medical technicians reflect a high level of commitment to public service."

Expanding eligibility "will further accelerate the revitalization of America's cities by promoting the integration of dedicated role models and mentors into the community," he added.

Although the requirements governing the new Good Neighbor initiative will be similar to those for the policemen and teachers programs, HUD is proposing "several important" modifications.

Participants will still be allowed to purchased HUD-acquired homes located in designated revitalization areas at a 50 percent discount from their list prices. But under the new rules, they cannot have owned any other residential property for one year prior to submitting an offer.

In addition, the participant and his or her spouse may not have previously purchased a home under the new plan or its predecessors.

However, the prohibition against owning any other residences during the occupancy term is being dropped as "an unduly burdensome restriction on business activity."

Participants must agree to live in the homes they purchase under the program as their sole residence for 36 months, starting on the day they close on the sale.

Those using conventional financing may not borrow more than the price of the house. But those who use government loans can role their share of reasonable and customary closing costs into the loan amount.

Also, participants must agree to execute three-year second mortgages and notes payable to HUD in an amount equaling the difference between the list price and the discounted selling price.

For each month of occupancy, the amount of the second lien will be reduced by 1/36th. If the participant remains in the house for three years as required, the balance will be zero. But if he sells or stops living in the home before that, he will owe the amount due on the loan at that time.

In another change, HUD is limiting the number of homes sold under the new program to no more than 5 percent of the houses taken in foreclosure by the Federal Housing Administration, the agency which insures government-backed home loans.

The nationwide cap is necessary to make sure sufficient numbers of HUD-acquired properties are available for other property disposition initiatives. But in that the department has an inventory of more than 60,000 foreclosures, there should be plenty of houses to go around, McCloskey said.

"We have to institute some kind of cap," he said. "But other than the fact that we don't always have foreclosed houses in certain areas, this should not be a factor. The number of sales so far as been well below the ceiling."

HUD also is changing eligibility requirements. Law enforcement officers employed full-time by a federal, state, local or now Indian tribal government can participate. But officers employed by public or private colleges will no longer be eligible because they typically do not have arrest authority beyond their campuses.

Teachers must be employed full-time by a state-accredited public or private school providing direct services to students from pre-kindergarten through the 12th grade. And first responders must work for a fire department or emergency medical service unit of the federal, state, local or tribal government serving the area where the home is located.