80 FR 18095 - Federal Housing Administration (FHA): Removal of Section 235 Home Ownership Program Regulations
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Federal Register Volume 80, Issue 64 (April 3, 2015)
Federal Register Volume 80, Issue 64 (April 3, 2015)
| Page Range | 18095-18096 | |
| FR Document | 2015-07597 |
[Federal Register Volume 80, Number 64 (Friday, April 3, 2015)] [Rules and Regulations] [Pages 18095-18096] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-07597] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Parts 200 and 235 [Docket No. FR-5829-F-01] Federal Housing Administration (FHA): Removal of Section 235 Home Ownership Program Regulations AGENCY: Office of the Assistant Secretary for Housing, Federal Housing Commissioner, HUD. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: Through this rule, HUD removes the regulations for its Section 235 Program, which authorized HUD to provide mortgage subsidy payments to lenders to assist lower-income families who are unable to meet the credit requirements generally applicable to FHA mortgage insurance programs. Authority to provide insurance to mortgagees under this program was terminated under the Housing and Community Development Act of 1987 and HUD has not provided new mortgage subsidy payments under this program since then. Because the regulations governing this program are no longer operative, they are being removed by this final rule. To the extent that any Section 235 mortgages remain in existence, or second mortgages for the recapture of subsidy payment pursuant to HUD's regulations governing the Section 235 Program (which was reserved by regulatory streamlining in 1995), the removal of these regulations does not affect the requirements for transactions entered into when Section 235 Program regulations were in effect. Assistance made available under the Section 235 Program will continue to be governed by the regulations that existed immediately before the effective date of this final rule. DATES: Effective May 4, 2015. FOR FURTHER INFORMATION CONTACT: Camille E. Acevedo, Associate General Counsel for Legislation and Regulations, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410; telephone 202-708-1793 (this is not a toll-free number). Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Relay Service at 800-877-8389. SUPPLEMENTARY INFORMATION: I. Background On August 1, 1968, the Housing and Urban Development Act of 1968 (Pub. L. 90-448) amended the National Housing Act to add a new section 235 (12 U.S.C. 1715z) (Section 235 Program). This provision authorized the Secretary to provide subsidies to reduce mortgage interest rates to as low as 1 percent and authorized a new credit assistance homeownership program for lower-income families who were unable to meet the credit requirements generally applicable to FHA mortgage insurance programs. HUD promulgated regulations implementing the Section 235 Program on January 6, 1976 (see 41 FR 1176) and codified these regulations in part 235 of title 24 of the Code of Federal Regulations (CFR). However, on February 5, 1988, the Section 235 Program was terminated under section 401(d) of the Housing and Community Development Act of 1987 (Pub. L. 100-242) and HUD ceased to make mortgage subsidy payments available under this program beginning October 1, 1989.\1\ In 1995, HUD removed much of part 235 from the CFR as part of HUD's effort to eliminate outdated, obsolete, or unutilized regulations, leaving only the parts that were necessary to regulate outstanding loans assisted or insured under the program. (See 60 FR 56498.) As of the date of this publication, there are only two outstanding loans remaining that were assisted or insured under this program. --------------------------------------------------------------------------- \1\ Although the Section 235 Program was terminated, section 401(d) of the Housing and Community Development Act of 1987 permitted the Secretary to continue to refinance mortgages insured previously under section 235(r) of the National Housing Act. However, no insurance or assistance for new loans has been provided by HUD since October 1, 1989. --------------------------------------------------------------------------- This Final Rule Since authority for HUD to provide assistance or insurance to low- income borrowers under the Section 235 Homeownership Program expired on October 1, 1989, HUD is proceeding to remove Section 235 Program regulations codified in 24 CFR part 235. Loans issued with assistance provided under Section 235 that are still outstanding will continue to be governed by the regulations in effect on May 3, 2015. Accordingly, this rule amends Sec. 1301 (Expiring Programs--Savings Clause) of 24 CFR 200, subpart W (Administrative Matters), and adds a new paragraph (g) to Sec. 200.1301, which preserves the Section 235 Program regulations as in effect prior to the effective date of this final rule, and continues to govern any assistance provided under the Section 235 Program before May 4, 2015. II. Justification for Final Rulemaking HUD generally publishes a rule for public comment before issuing a final rule for effect, in accordance with HUD's own regulations on rulemaking in 24 CFR part 10. However, part 10 provides for exceptions to the general rule if the agency finds good cause to omit advance notice and public participation. The good cause requirement is satisfied when prior public procedure is impracticable, unnecessary, or contrary to the public interest. (See 24 CFR 10.1.) HUD finds that public notice and comment are not necessary for this rulemaking because assistance is no longer being provided under this program and, therefore, the regulations are no longer operative. For these reasons, HUD has determined that it is unnecessary to delay the effectiveness of this rule in order to solicit prior public comment. [[Page 18096]] III. Findings and Certification Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Because HUD has determined that good cause exists to issue this rule without prior public comment, this rule is not subject to the requirement to publish an initial or final regulatory flexibility analysis under the RFA as part of such action. Unfunded Mandates Reform Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) \2\ requires that an agency prepare a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by state, local and tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of UMRA also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule.\3\ However, the UMRA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to the APA.\4\ As discussed above, HUD has determined for good cause that the APA does not require general notice and public comment on this rule and, therefore, the UMRA does not apply to this final rule. --------------------------------------------------------------------------- \2\ 2 U.S.C. 1532. \3\ 2 U.S.C. 1534. \4\ 2 U.S.C. 1532(a). --------------------------------------------------------------------------- Executive Order 13132, Federalism Executive Order 13132 (entitled ``Federalism'') prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This final rule will not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order. Environmental Review This final rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern, or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this final rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321). List of Subjects 24 CFR Part 200 Administrative practice and procedure, Claims, Equal employment opportunity, Fair housing, Home improvement, Housing standards, Incorporation by reference, Lead poisoning, Loan programs--housing and community development, Minimum property standards, Mortgage insurance, Organization and functions (Government agencies), Penalties, Reporting and recordkeeping requirements, Social security, Unemployment compensation, Wages. 24 CFR Part 235 Condominiums, Cooperatives, Grant programs--housing and community development, Low and moderate income housing, Mortgage insurance, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, and under the authority of 42 U.S.C. 3535(d), HUD amends 24 CFR parts 200 and 235 as follows: PART 200--INTRODUCTION TO FHA PROGRAMS 0 1. The authority citation for part 200 continues to read as follows: Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d). 0 2. Add Sec. 200.1301(g) to read as follows: Sec. 200.1301 Expiring programs--Savings clause. * * * * * (g) Any existing loan assistance (including recapture of loan assistance), ongoing participation, or insured loans under the program listed in this paragraph will continue to be governed by the regulations in effect as they existed immediately before May 4, 2015 (24 CFR part 235, 2014 Edition): (1) Part 235, Mortgage Insurance and Assistance Payments for Home Ownership and Project Rehabilitation (12 U.S.C. 1715z). (2) [Reserved] PART 235--[Removed] 0 3. Remove part 235. Dated: March 27, 2015. Biniam Gebre, Acting Assistant Secretary for Housing--Federal Housing Commissioner. [FR Doc. 2015-07597 Filed 4-2-15; 8:45 am] BILLING CODE 4210-67-P
![Federal Register / Vol. 80, No. 64 / Friday, April 3, 2015 / Rules and Regulations 18095
Ave., Bldg. 71, Rm. 3103, Silver Spring, and HUD has not provided new 1995, HUD removed much of part 235
MD 20993–0002. mortgage subsidy payments under this from the CFR as part of HUD’s effort to
■ 72. Section 1271.350 is amended: program since then. Because the eliminate outdated, obsolete, or
■ a. In the first sentence of paragraph regulations governing this program are unutilized regulations, leaving only the
(a)(5) by removing the words ‘‘Center for no longer operative, they are being parts that were necessary to regulate
Biologics Evaluation and Research removed by this final rule. To the extent outstanding loans assisted or insured
(HFM–210), Food and Drug that any Section 235 mortgages remain under the program. (See 60 FR 56498.)
Administration, 1401 Rockville Pike, in existence, or second mortgages for the As of the date of this publication, there
Suite 200N, Rockville, MD 20852–1448’’ recapture of subsidy payment pursuant are only two outstanding loans
and by adding in their place ‘‘Food and to HUD’s regulations governing the
remaining that were assisted or insured
Drug Administration, Center for Section 235 Program (which was
under this program.
Biologics Evaluation and Research, reserved by regulatory streamlining in
Document Control Center, 10903 New 1995), the removal of these regulations This Final Rule
Hampshire Ave., Bldg. 71, Rm. G112, does not affect the requirements for
transactions entered into when Section Since authority for HUD to provide
Silver Spring, MD 20993–0002’’; and
■ b. By revising paragraph (b)(3) to read 235 Program regulations were in effect. assistance or insurance to low-income
as follows: Assistance made available under the borrowers under the Section 235
Section 235 Program will continue to be Homeownership Program expired on
§ 1271.350 Reporting. governed by the regulations that existed October 1, 1989, HUD is proceeding to
* * * * * immediately before the effective date of remove Section 235 Program regulations
(b) * * * this final rule. codified in 24 CFR part 235.
(3) You must report each such DATES: Effective May 4, 2015. Loans issued with assistance provided
HCT/P deviation that relates to a core FOR FURTHER INFORMATION CONTACT: under Section 235 that are still
CGTP requirement on Form FDA 3486 Camille E. Acevedo, Associate General outstanding will continue to be
within 45 days of the discovery of the Counsel for Legislation and Regulations, governed by the regulations in effect on
event either electronically using the Office of General Counsel, Department May 3, 2015. Accordingly, this rule
Center for Biologics Evaluation and of Housing and Urban Development,
Research electronic Web-based amends § 1301 (Expiring Programs—
451 7th Street SW., Room 10276,
application or by mail to the Food and Savings Clause) of 24 CFR 200, subpart
Washington, DC 20410; telephone 202–
Drug Administration, Center for 708–1793 (this is not a toll-free W (Administrative Matters), and adds a
Biologics Evaluation and Research, number). Persons with hearing or new paragraph (g) to § 200.1301, which
Document Control Center, 10903 New speech impairments may access this preserves the Section 235 Program
Hampshire Ave., Bldg. 71, Rm. G112, number through TTY by calling the toll- regulations as in effect prior to the
Silver Spring, MD 20993–0002. free Federal Relay Service at 800–877– effective date of this final rule, and
Dated: March 23, 2015. 8389. continues to govern any assistance
SUPPLEMENTARY INFORMATION: provided under the Section 235 Program
Leslie Kux,
before May 4, 2015.
Associate Commissioner for Policy. I. Background
[FR Doc. 2015–07268 Filed 4–2–15; 8:45 am] II. Justification for Final Rulemaking
On August 1, 1968, the Housing and
BILLING CODE 4164–01–P Urban Development Act of 1968 (Pub. L. HUD generally publishes a rule for
90–448) amended the National Housing public comment before issuing a final
Act to add a new section 235 (12 U.S.C. rule for effect, in accordance with
DEPARTMENT OF HOUSING AND 1715z) (Section 235 Program). This
URBAN DEVELOPMENT HUD’s own regulations on rulemaking
provision authorized the Secretary to in 24 CFR part 10. However, part 10
provide subsidies to reduce mortgage provides for exceptions to the general
24 CFR Parts 200 and 235 interest rates to as low as 1 percent and
rule if the agency finds good cause to
[Docket No. FR–5829–F–01] authorized a new credit assistance
omit advance notice and public
homeownership program for lower-
Federal Housing Administration (FHA): income families who were unable to participation. The good cause
Removal of Section 235 Home meet the credit requirements generally requirement is satisfied when prior
Ownership Program Regulations applicable to FHA mortgage insurance public procedure is impracticable,
programs. HUD promulgated regulations unnecessary, or contrary to the public
AGENCY: Office of the Assistant interest. (See 24 CFR 10.1.)
Secretary for Housing, Federal Housing implementing the Section 235 Program
Commissioner, HUD. on January 6, 1976 (see 41 FR 1176) and HUD finds that public notice and
codified these regulations in part 235 of comment are not necessary for this
ACTION: Final rule.
title 24 of the Code of Federal rulemaking because assistance is no
SUMMARY: Through this rule, HUD Regulations (CFR). However, on longer being provided under this
removes the regulations for its Section February 5, 1988, the Section 235 program and, therefore, the regulations
235 Program, which authorized HUD to Program was terminated under section are no longer operative. For these
provide mortgage subsidy payments to 401(d) of the Housing and Community reasons, HUD has determined that it is
asabaliauskas on DSK5VPTVN1PROD with RULES
lenders to assist lower-income families Development Act of 1987 (Pub. L. 100– unnecessary to delay the effectiveness of
who are unable to meet the credit 242) and HUD ceased to make mortgage this rule in order to solicit prior public
requirements generally applicable to subsidy payments available under this comment.
FHA mortgage insurance programs. program beginning October 1, 1989.1 In
Authority to provide insurance to 1 Although the Section 235 Program was insured previously under section 235(r) of the
mortgagees under this program was terminated, section 401(d) of the Housing and National Housing Act. However, no insurance or
terminated under the Housing and Community Development Act of 1987 permitted the assistance for new loans has been provided by HUD
Community Development Act of 1987 Secretary to continue to refinance mortgages since October 1, 1989.
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![18096 Federal Register / Vol. 80, No. 64 / Friday, April 3, 2015 / Rules and Regulations
III. Findings and Certification Environmental Review Ownership and Project Rehabilitation
This final rule does not direct, (12 U.S.C. 1715z).
Regulatory Flexibility Act (2) [Reserved]
provide for assistance or loan and
The Regulatory Flexibility Act (RFA) mortgage insurance for, or otherwise
PART 235—[Removed]
(5 U.S.C. 601 et seq.) generally requires govern, or regulate, real property
an agency to conduct a regulatory acquisition, disposition, leasing, ■ 3. Remove part 235.
flexibility analysis of any rule subject to rehabilitation, alteration, demolition, or
Dated: March 27, 2015.
notice and comment rulemaking new construction, or establish, revise or
provide for standards for construction or Biniam Gebre,
requirements, unless the agency certifies
that the rule will not have a significant construction materials, manufactured Acting Assistant Secretary for Housing—
housing, or occupancy. Accordingly, Federal Housing Commissioner.
economic impact on a substantial
under 24 CFR 50.19(c)(1), this final rule [FR Doc. 2015–07597 Filed 4–2–15; 8:45 am]
number of small entities. Because HUD
has determined that good cause exists to is categorically excluded from BILLING CODE 4210–67–P
issue this rule without prior public environmental review under the
comment, this rule is not subject to the National Environmental Policy Act of
requirement to publish an initial or final 1969 (42 U.S.C. 4321). DEPARTMENT OF THE TREASURY
regulatory flexibility analysis under the List of Subjects Internal Revenue Service
RFA as part of such action.
24 CFR Part 200
Unfunded Mandates Reform 26 CFR Part 1
Administrative practice and
Section 202 of the Unfunded procedure, Claims, Equal employment [TD 9717]
Mandates Reform Act of 1995 (UMRA) 2 opportunity, Fair housing, Home
improvement, Housing standards, RIN 1545–BL77
requires that an agency prepare a
budgetary impact statement before Incorporation by reference, Lead
Allocation of Controlled Group
promulgating a rule that includes a poisoning, Loan programs—housing and
Research Credit
community development, Minimum
Federal mandate that may result in the
property standards, Mortgage insurance, AGENCY: Internal Revenue Service (IRS),
expenditure by state, local and tribal
Organization and functions Treasury.
governments, in the aggregate, or by the
(Government agencies), Penalties, ACTION: Final and temporary
private sector of $100 million or more Reporting and recordkeeping
in any one year. If a budgetary impact regulations.
requirements, Social security,
statement is required, section 205 of Unemployment compensation, Wages. SUMMARY: This document contains final
UMRA also requires an agency to and temporary regulations relating to
identify and consider a reasonable 24 CFR Part 235
the allocation of the credit for increasing
number of regulatory alternatives before Condominiums, Cooperatives, Grant research activities (research credit) to
promulgating a rule.3 However, the programs—housing and community corporations and trades or businesses
UMRA applies only to rules for which development, Low and moderate under common control (controlled
an agency publishes a general notice of income housing, Mortgage insurance, groups)... This document also contains
proposed rulemaking pursuant to the Reporting and recordkeeping final and temporary regulations relating
APA.4 As discussed above, HUD has requirements. to the allocation of the railroad track
determined for good cause that the APA For the reasons set forth in the maintenance credit and the election for
does not require general notice and preamble, and under the authority of 42 a reduced research credit. The text of
public comment on this rule and, U.S.C. 3535(d), HUD amends 24 CFR these temporary regulations also serves
therefore, the UMRA does not apply to parts 200 and 235 as follows: as the text of the proposed regulations
this final rule. (REG–133489–13) published in the
PART 200—INTRODUCTION TO FHA Proposed Rules section in this issue of
Executive Order 13132, Federalism PROGRAMS the Federal Register.
Executive Order 13132 (entitled ■ 1. The authority citation for part 200 DATES: Effective date: These regulations
‘‘Federalism’’) prohibits an agency from continues to read as follows: are effective April 3, 2015.
publishing any rule that has federalism Applicability date: For dates of
Authority: 12 U.S.C. 1702–1715z–21; 42
implications if the rule either imposes U.S.C. 3535(d). applicability, see §§ 1.41–6T(j), 1.45G–
substantial direct compliance costs on 1T(g), and 1.280C–4T(c).
■ 2. Add § 200.1301(g) to read as
state and local governments and is not FOR FURTHER INFORMATION CONTACT:
follows:
required by statute, or the rule preempts James Holmes, at (202) 317–4137; (not a
state law, unless the agency meets the § 200.1301 Expiring programs—Savings toll-free number).
consultation and funding requirements clause. SUPPLEMENTARY INFORMATION:
of section 6 of the Executive Order. This * * * * *
final rule will not have federalism Background
(g) Any existing loan assistance
implications and would not impose (including recapture of loan assistance), This document contains final and
asabaliauskas on DSK5VPTVN1PROD with RULES
substantial direct compliance costs on ongoing participation, or insured loans temporary regulations for § 1.41–6,
state and local governments or preempt under the program listed in this § 1.45G–1, and § 1.280C–4 of the Income
state law within the meaning of the paragraph will continue to be governed Tax Regulations (26 CFR part 1). These
Executive Order. by the regulations in effect as they regulations update the rules in a manner
existed immediately before May 4, 2015 that is consistent with the amendments
22 U.S.C. 1532. (24 CFR part 235, 2014 Edition): made to section 41(f)(1)(A)(ii) and
32 U.S.C. 1534. (1) Part 235, Mortgage Insurance and section 41(f)(1)(B)(ii) in Section 301(c)
4 2 U.S.C. 1532(a). Assistance Payments for Home of the Act.
VerDate Sep<11>2014 16:21 Apr 02, 2015 Jkt 235001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 E:\FR\FM\03APR1.SGM 03APR1](https://thefederalregister.org/doc/80_FR_18159/page/2.svg)
Document Created: 2015-12-18 15:28:48
Document Modified: 2015-12-18 15:28:48
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective May 4, 2015. | |
| Contact | Camille E. Acevedo, Associate General Counsel for Legislation and Regulations, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410; telephone 202-708-1793 (this is not a toll-free number). Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Relay Service at 800-877-8389. | |
| FR Citation | 80 FR 18095 | |
| CFR Citation | 24
CFR
200 24 CFR 235 | |
| CFR Associated | Administrative Practice and Procedure; Claims; Equal Employment Opportunity; Fair Housing; Home Improvement; Housing Standards; Incorporation by Reference; Lead Poisoning; Loan Programs-Housing and Community Development; Minimum Property Standards; Mortgage Insurance; Organization and Functions (government Agencies); Penalties; Reporting and Recordkeeping Requirements; Social Security; Unemployment Compensation; Wages; Condominiums; Cooperatives; Grant Programs-Housing and Community Development and Low and Moderate Income Housing |
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