Federated learning (FL) is a subfield of machine learning where multiple clients try to collaboratively learn a model over a network under communication constraints. We consider finite-sum federated optimization under a second-order function similarity condition and strong convexity, and propose two new algorithms: SVRP and Catalyzed SVRP. This second-order similarity condition has grown popular recently, and is satisfied in many applications including distributed statistical learning and differentially private empirical risk minimization. The first algorithm, SVRP, combines approximate stochastic proximal point evaluations, client sampling, and variance reduction. We show that SVRP is communication efficient and achieves superior performance to many existing algorithms when function similarity is high enough. Our second algorithm, Catalyzed SVRP, is a Catalyst-accelerated variant of SVRP that achieves even better performance and uniformly improves upon existing algorithms for federated optimization under second-order similarity and strong convexity. In the course of analyzing these algorithms, we provide a new analysis of the Stochastic Proximal Point Method (SPPM) that might be of independent interest. Our analysis of SPPM is simple, allows for approximate proximal point evaluations, does not require any smoothness assumptions, and shows a clear benefit in communication complexity over ordinary distributed stochastic gradient descent.