Personal Finance—Police, Teachers Left Out of Push for Help With Housing

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Congress passed its major housing bill for the year 2000 this month, loaded with mortgage and financial assistance for select beneficiaries from Native-American and Native-Hawaiian home buyers to the elderly and disabled. It even provided generous end-of-the-year pay raises to the governors of the Federal Reserve Board.

But there was no holiday home-buying cheer for hundreds of thousands of modest-income teachers, firefighters, police officers and other local public workers across the country who’d been in line most of the year for a new, low down-payment federal mortgage plan.

The omnibus American Home Ownership and Economic Opportunity Act of 2000, which passed the House this spring with the most lopsided bipartisan margin of any major housing legislation in more than two decades, completely zeroed out local public employees and private school teachers in its final version.

While a long list of other target groups received Christmas gifts, teachers and police got the Capitol Hill equivalent of coal in their stockings.

Under the original bill, large numbers of local public employees would have qualified for a series of programs designed to help them buy homes and live in or near the communities that employ them. Teachers, law enforcement and medical emergency personnel would have been able to buy houses using 1 percent down-payment mortgages insured by the Federal Housing Administration.

Some public and private teachers would have received the opportunity to buy FHA-owned houses at 50 percent discounts off appraised values, provided they occupied and used the properties as a principal residence for at least three years.

Law enforcement officers local, state and federal were part of the original bill as well. In exchange for buying and living in “locally designated high crime areas,” they could purchase FHA-owned homes at full appraised value with zero down. The same three-year residency requirement applied.

The thrust of the mortgages-for-police plan, according to sponsors, was to help stabilize neighborhoods by encouraging law enforcement officers to buy homes and plant roots in troubled communities. The houses they’d buy would come from the government’s own stock of foreclosed homes, and the lack of down payments wouldn’t make a dent in FHA’s highly profitable mortgage insurance funds.

The rationale for helping teachers live near where they work, said sponsors, was also to help strengthen the social fabrics of local neighborhoods. Teachers often cannot afford to buy a home in the community where they work. By cutting the usual down payment by a few percentage points, some teachers could indeed manage a home purchase. And as stable, employed residents, they’d be excellent risks for the FHA fund.

The original bill was the product of close, bipartisan cooperation in the House.

But that was in the House. When the bill hit the Senate, bipartisanship evaporated. The head of the Senate Banking Committee, Phil Gramm, R-Texas, and the Housing subcommittee chairman, Wayne Allard, R-Colo., objected to any FHA mortgage breaks for public employees or school teachers. An aide to Gramm explained that he is philosophically opposed to “giving any person special treatment because of employment status.”

An angry House Republican, who requested anonymity, said, however, that “the real reason” Gramm and Allard opposed the plan was that they didn’t want to provide any special benefits to unionized public employees and teachers “who they know aren’t going to vote Republican.”

Although the bill contained a long list of mortgage assistance programs for other groups of citizens, Gramm and Allard refused to compromise on even minimal home-buying aid for teachers and police. Controlling their committees’ dockets, they blocked the entire housing bill effectively holding it hostage until House negotiators agreed to drop the public employee provisions.

That finally happened earlier this month. With the objectionable provisions excised, the bill passed the Senate and was sent to the White House for signature into law.

So in the end, there were gifts and baubles galore in this season’s holiday housing bill except, that is, for your kids’ teachers and the folks at the other end of your 911 emergency calls.

Syndicated columnist Jane Bryant Quinn is on vacation. Kenneth R. Harney can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.

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