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Archive for Wednesday, November 3, 1999

OFFICERS CASH IN ON HUD DEAL

November 3, 1999

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— If you are a police officer looking for a home at half price and $100 down, the Department of Housing and Urban Development has a deal for you: The Officer Next Door Program. The theoretical catch is that the home is supposed to be in a deteriorating neighborhood and you must live in it for at least three years. These homes come from HUD's stock of 50,000 properties seized from individuals who defaulted on government-backed loans.

The idea is to decrease the housing stock and fill the homes, while bringing a law-abiding influence into bad neighborhoods. The reality is otherwise.

A source from a California HUD office, told us there are several homes in these programs that have been resold by their police owners for a quick profit. It is certain, our source told us, that many other homes are being resold, because, amazingly, HUD doesn't keep track of the homes after they are moved through the program.

Over 3,000 HUD homes have been sold to police officers in the last two years, but HUD spokesman Lemar Wooley only acknowledges the instance of one officer in New Orleans who turned his half-price home around quickly for a profit.

Wooley stresses that there are criminal and administrative penalties for selling the home before the three-year mandatory term is over. HUD can place a lien on the house and demand repayment on a sliding scale. If a home is sold before the first year, the officer pays back 90 percent of the real value of the home; selling before the second or third year yields a 60 percent or 30 percent buy-back fine, respectively.

The catch is that HUD depends on self-reporting by the officers. "We assume good faith because they are law enforcement agencies," Wooley told us. This is incredible; police reflect society: the large majority is honorable; the unwatched bad apples are not.

And although HUD isn't doing any oversight, it will not allow independent groups to conduct investigations, either.

Wooley would not release addresses because, he told us, these are the addresses of police officers, but he did send us a list of cities and how many homes were sold in each through the program. We were told the homes are only in revitalization areas or economically distressed places, but that, we discovered, is often not the case.

A third of the homes sold have been in California, though 39 states plus the District of Columbia are participating.

Large numbers of the homes sold in California are in suburban areas or bedroom communities: Fontana with 43 homes, Palmdale with 94, Rialto with 151. Los Angeles and Compton, known for gang violence and distress, have 100 homes between them, while cities outside of the large metro areas, including San Bernardino, Lancaster, Pomona and Ontario, have 281.

Few other states seem to be aware of the program, except for Illinois, with 108 homes, and Texas, with 42 officers participating in Arlington, 23 in Fort Worth, 32 in Garland, 29 in Grand Prairie and 28 in Mesquite. Only six officers are taking advantage of the half-priced homes in Houston, and 19 in Dallas.

One more way for HUD to clear the houses off their books quickly is the recently unveiled Teacher Next Door program, modeled after the Officer Next Door.

Basically the same rules apply: Full-time teachers may purchase a half-price home within the school district where they teach, if it is a distressed, inner-city neighborhood. Police officers, however, may buy homes outside of their jurisdictions -- and sell them or rent them. Because the Big Brother we are all concerned about isn't watching after all.

-- Jack Anderson and Douglas Cohn are columnists for United Feature Syndicate.

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