[Federal Register: January 12, 1998 (Volume 63, Number 7)]
[Notices]               
[Page 1885-1887]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ja98-113]


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Part II





Department of Housing and Urban Development





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Single Family Property Disposition Officer Next Door Sales Program; 
Notice


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4277-N-01]

 
Single Family Property Disposition Officer Next Door Sales 
Program

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: Under its Single Family Property Disposition program, the 
Department has implemented an initiative to sell HUD-owned single 
family homes to law enforcement officers at a 50 percent discount. The 
initiative applies to properties located in Revitalization Areas and to 
other properties that meet certain exception criteria. These properties 
are being made available to law enforcement officers who agree to 
occupy them as their primary residence for at least three years. The 
Department has taken this action to ensure that homeownership 
opportunities are made available to law enforcement officers who are 
charged with the responsibility of ensuring the safety and well-being 
of residents in the communities they serve and to help promote safe 
neighborhoods by furthering the community policing efforts being made 
by numerous cities.

FOR FURTHER INFORMATION CONTACT: Joe McCloskey, Director, Single Family 
Asset Management Division, Department of Housing and Urban Development, 
451 7th St. SW, Room 9174, Washington, D.C. 20410-8000), telephone 
number (202) 708-0740 (this is not a toll-free number). For hearing-and 
speech-impaired persons, this number may be accessed via TTY by calling 
the Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    A major goal of the Department is to use its resources in a manner 
that enhances the general well-being of American communities. Promoting 
safe neighborhoods is a critical component of the Nation's housing 
policy. One means of furthering this policy is to encourage law 
enforcement officers to purchase and reside in HUD-acquired single 
family properties. Accordingly, the Department is using its authority 
under 24 CFR part 291, Disposition of HUD-Acquired Single Family 
Property, to make single family properties nationwide available for 
this purpose.

II. Conditions for Purchase of Properties

    For purposes of this program, law enforcement officers are defined 
as individuals who are employed full time by a federal, state, county, 
or municipal government and are sworn to uphold, and make arrests for 
violations of, federal, state, county, or municipal law.
    Starting on August 11, 1997 and for one year thereafter, for this 
Officer Next Door Sales program only, the discount for both insurable 
and uninsurable properties that are located in Revitalization Areas as 
defined in HUD Notice H-96-81, dated September 30, 1996, and for 
properties located outside a Revitalization Area that meet the 
exception criteria (the property meets the standards for establishment 
of a Revitalization Area and is located in a neighborhood where seller 
concessions, such as take-back financing are common and/or a 
predominance of other buyers in the area are investor owners) is 50 
percent. In addition, both insurable and uninsurable properties, for 
this program only, may be purchased on a direct sale basis by the unit 
of local government, nonprofit organization or law enforcement officer 
in Revitalization Areas and exception areas. Outside of these areas, 
law enforcement officers must use the standard sales procedure without 
any discount when purchasing from HUD.
    It is intended that the full discount be passed on to the law 
enforcement officer if the property is first purchased by the unit of 
local government or nonprofit organization. If a real estate broker is 
engaged to handle the sale of these properties or closing costs are 
requested, the discount will be reduced by the amount of the broker's 
commission or closing costs paid. The special discount and the sale of 
properties directly to law enforcement officers under this program will 
expire on August 11, 1998.
    This program is an extension of the current sales program. The 
procedures for implementing this program are as follows:
    Upon an expression of interest to participate in this program by a 
government entity, nonprofit organization or law enforcement officer, 
the HUD Field Office will provide a listing of all newly acquired 
insurable and uninsurable properties available in the designated area 
of interest.
    2. Where feasible, HUD Field Offices will invite interested law 
enforcement officers into the office for a face to face discussion of 
how the program operates in regard to property availability, discount, 
how to prepare and submit a sales contract, the role of a real estate 
broker if they choose to use one and how to view properties. If an 
office visit is not convenient, the local office representative will 
thoroughly explain the procedure over the telephone and provide 
detailed written information.
    3. Normal direct sales procedures apply under this program. 
Interested parties must notify HUD of their preliminary interest within 
5 days of property notification.
    4. Governmental entities and nonprofit organizations purchasing 
properties with the intent of resale to law enforcement officers should 
so designate those specific properties when an interest to purchase is 
expressed to HUD. At the time the sales contract is submitted, the 
government agency or nonprofit must indicate if FHA-insured financing 
is desired.
    5. To avoid the need for dual closings and the cost associated with 
each, Field Offices will allow the governmental entity or the nonprofit 
organization to assign the sales contract to the law enforcement 
officer.
    6. To make the properties more affordable in those instances where 
an FHA-insured mortgage is requested by the law enforcement officer, 
the downpayment will be $100.
    7. The law enforcement officer must occupy the property as his/her 
primary residence for the three year period.
    8. The sales closing timeframes established by each HUD Office will 
apply to this program.
    9. Deed restrictions will apply to these sales.
    a. The following clause MUST be added to each deed for properties 
purchased by law enforcement officers under this program:
    ``The purpose of the following covenant is to insure that the 
property conveyed herein is used for homeownership and is occupied as a 
primary residence by a law enforcement officer in accordance with the 
objectives of the Grantor's Officer Next Door Sales Program. Grantee, a 
law enforcement officer, shall own and occupy, as a primary residence, 
the property conveyed herein. This covenant shall be subject and 
subordinate to any mortgage or deed of trust executed by Grantee to 
finance or refinance the acquisition of the property conveyed herein 
and shall be extinguished upon the foreclosure of such mortgage or the 
conveyance of the property by deed in lieu of foreclosure. The 
covenants and conditions contained in this paragraph shall terminate, 
shall be of no further effect, and shall not be enforceable on or after 
[date of third year anniversary of closing] or unless terminated 
earlier in writing by Grantor. The acceptance of this deed by the

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Grantee shall constitute an acceptance of the use restrictions 
described in this paragraph.''
    b. In those instances where a nonprofit organization or a unit of 
local government purchases and closes the sale, the following clause 
must be provided to the nonprofit organization or a unit of local 
government for inclusion as a restriction in their deed to the law 
enforcement officer:
    ``The purpose of the following covenant is to insure that the 
property conveyed herein is used for homeownership and is occupied as a 
primary residence by a law enforcement officer in accordance with the 
objectives of the U.S. Department of Housing and Urban Development's 
(HUD's) Officer Next Door Sales Program. Grantee, a law enforcement 
officer, shall own and occupy, as a primary residence, the property 
conveyed herein. This covenant shall be subject and subordinate to any 
mortgage or deed of trust executed by Grantee to finance or refinance 
the acquisition of the property conveyed herein and shall be 
extinguished upon the foreclosure of such mortgage or the conveyance of 
the property by deed in lieu of foreclosure. The covenants and 
conditions contained in this paragraph shall terminate, shall be of no 
further effect, and shall not be enforceable on or after [date of third 
year anniversary of closing] or unless terminated earlier in writing by 
HUD. The acceptance of this deed by the Grantee shall constitute an 
acceptance of the use restrictions described in this paragraph.''

III. Paperwork Reduction Act Statement

    The information collection requirements contained in this Notice 
have been approved by the Office of Management and Budget (OMB) in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520), and assigned OMB control number 2502-0521. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless the collection displays a valid 
control number.

IV. Environmental Impact

    This notice is subject to, and does not alter the environmental 
requirements of regulations in 24 CFR part 291. Accordingly, under 24 
CFR 50.19(c)(5), this notice is categorically excluded from 
environmental review under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321). The environmental review provisions for the 
disposition of HUD-acquired single family property are in 24 CFR 
291.100(e).

    Authority: 12 U.S.C. 1709 and 1715b.

    Dated: January 5, 1998.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 98-669 Filed 1-9-98; 8:45 am]
BILLING CODE 4210-27-P