Cops, Teachers Told to Pay Up for HUD Fraud

Federal officials are demanding repayment of about $1.2 million from 54 police officers and teachers who defrauded a program that helped them buy houses in return for living in poor, crime-ridden neighborhoods.

Federal housing officials also say they have tightened controls on the program, which was suspended for four months because of fraud and mismanagement. The program resumed last week.

“While most of the officers and teachers who purchase houses through these programs play by the rules, there is no doubt we needed to implement more aggressive monitoring and tighten controls,” Housing Secretary Mel Martinez said.

The Officer Next Door/Teacher Next Door program lets police and teachers buy homes in poor areas at half-price. The Department of Housing and Urban Development controls the home sales because previous owners had defaulted on government-backed loans.

The idea was to improve poor neighborhoods by deterring crime, strengthening ties with police and schools and providing role models for other residents.

About 5,700 police officers and 1,500 teachers have bought half-price homes since the program began in 1997.

But a HUD audit found that up to 1 in 5 home buyers had broken program rules. At least 10 officers have pleaded guilty to defrauding the program and 14 more have been indicted.

The audit, first reported by Associated Press in March, said HUD’s poor record-keeping and oversight made the problem worse. Participants are supposed to live in the homes at least three years, but many broke the rules by selling the homes, renting them out or leaving them abandoned, the audit said.