81 FR 75836 - Section 184 Indian Housing Loan Guarantee Program Increase to Annual Premium

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 81, Issue 211 (November 1, 2016)

Page Range		75836-75837
FR Document		2016-26331

The Section 184 Indian Housing Loan Guarantee program (Section 184 program) is a home mortgage program specifically designed for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. Over the last five years, the Section 184 program has doubled the number of loans and eligible families being assisted by the program. For HUD to continue to meet the increasing demand for participation in this program, HUD is exercising its authority to increase the annual premium to the borrower from 0.15 to 0.25 percent of the remaining loan balance. This annual premium will continue until the unpaid principal balance, excluding the upfront loan guarantee fee, reaches 78 percent of the lower of the initial sales price or appraised value based on the initial amortization schedule. Effective December 1, 2016 the new annual premium of 0.25 percent of the remaining loan balance will apply to all new loan guarantees, including refinances.

Federal Register, Volume 81 Issue 211 (Tuesday, November 1, 2016)

[Federal Register Volume 81, Number 211 (Tuesday, November 1, 2016)]
[Notices]
[Pages 75836-75837]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-26331]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5974-N-01]

Section 184 Indian Housing Loan Guarantee Program Increase to
Annual Premium

AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.

ACTION: Notice.

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SUMMARY: The Section 184 Indian Housing Loan Guarantee program (Section
184 program) is a home mortgage program specifically designed for
American Indian and Alaska Native families, Alaska villages, tribes, or
tribally designated housing entities. Over the last five years, the
Section 184 program has doubled the number of loans and eligible
families being assisted by the program. For HUD to continue to meet the
increasing demand for participation in this program, HUD is exercising
its authority to increase the annual premium to the borrower from 0.15
to 0.25 percent of the remaining loan balance. This annual premium will
continue until the unpaid principal balance, excluding the upfront loan
guarantee fee, reaches 78 percent of the lower of the initial sales
price or appraised value based on the initial amortization schedule.
Effective December 1, 2016 the new annual premium of 0.25 percent of
the remaining loan balance will apply to all new loan guarantees,
including refinances.

DATES: Effective Date: December 1, 2016.

FOR FURTHER INFORMATION CONTACT: Heidi J. Frechette, Deputy Assistant
Secretary for Native American Programs, Office of Public and Indian
Housing, Department of Housing and Urban Development, 451 7th Street
SW., Room 4126, Washington, DC 20410; telephone number 202-401-7914
(this is not a toll-free number). Persons with hearing or speech
disabilities may access this number through TTY by calling the toll-
free Federal Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

Section 184 of the Housing and Community Development Act of 1992
(Pub. L. 102-550, approved October 28, 1992), as amended by the Native
American Housing Assistance and Self-Determination Act of 1996 (Pub. L.
104-330, approved October 26, 1996) and 2013 Consolidated and Further
Continuing Appropriations Act (Pub. L. 113-6, approved March 26, 2013),
established the Section 184 program to provide access to sources of
private mortgage financing to Indian families, Indian housing
authorities, and Indian tribes. Congress established this program in
1992 to facilitate homeownership and increase access to capital in
Native American Communities. The Section 184 program addresses
obstacles to mortgage financing on trust land and in other Indian and
Alaska Native areas by giving HUD the authority to guarantee loans to
eligible persons and entities to construct, acquire, refinance, or
rehabilitate one- to four-family dwellings in these areas.
The Section 184 Loan Guarantee Fund (the Fund) is used to fulfill
obligations of the Secretary with respect to the loans guaranteed under
this program. The Fund receives annual appropriations to cover the cost
of the program, and amounts for claims, notes, mortgages, contracts,
and property acquired by the Secretary under the Section 184 program,
which reduces the amount of appropriations needed to support the
program. In recent years, rapidly growing demand has required HUD to
increase the guarantee premium and implement a new annual upfront fee
to support new loan guarantees. HUD issued loan guarantee commitments
for $495.4 million in fiscal year (FY) 2011, $670.8 million in FY 2012,
$672.3 million in FY 2013, $595 million in FY 2014, $738.1 million in
FY 2015, and $756.3 million in FY 2016.\1\ Additionally, expenses have
increased for acquisitions, insurance, and other program costs, and HUD
has seen higher losses now that the Fund has guaranteed over $5.5
billion in current loans.
---------------------------------------------------------------------------

\1\ Year-to-date cumulative report totaling Section 184 loans
guaranteed through end of July 2016.
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On October 7, 2014, HUD issued a notice exercising its new
statutory authority to implement an annual premium to the borrower in
the amount of 0.15 percent. (79 FR 60492). The notice also provided
guidance on the cancellation of the annual premium when the loan
reaches the 78 percent loan-to-value ratio. The new annual premium
became effective on November 15, 2014 for all new loan guarantees,
including refinances.

II. Increased Premium

To meet projected demand for participation in the Section 184
program for FY 2017, HUD is increasing the annual premium from 0.15 to
0.25 percent of the remaining loan balance until the unpaid principal
balance, excluding the upfront loan guarantee fee, reaches 78 percent
of the lower of the initial sales price or appraised value based on the
initial amortization schedule on all new loans, including refinances.
This increase will apply to all new program applicants as of the
effective date of this notice. It will not apply to existing mortgages
guaranteed by this program. Without an increase in the annual premium,
HUD will not have sufficient funding to the meet the anticipated demand
for Section 184 mortgage loans in FY 2017. The decision to increase the
annual loan guarantee premium provides a balanced approach that
addresses the current demands for the program while focusing on the
need to remain affordable.
By increasing the annual premium paid by borrowers, the credit
subsidy rate \2\ will go down, and HUD expects the program will be able
to guarantee the volume of loans predicted for FY 2017. An annual
premium of 0.25 percent would cost a borrower with a $175,000 mortgage
(the average loan size for the program) an extra $36.18 a month in
total monthly fees on the borrower's monthly payment or $434.16
annually. Since the 0.25 percent annual premium is tied to the loan
balance, the annual premium will decrease for the borrower every year
as the loan balance declines and then disappear after the loan-to-value
ratio reaches 78 percent of the lower of the initial sales price or
appraised value based on the initial amortization schedule. Even with
these additional costs to borrowers, the Section 184 program will still
be one of the least expensive loan products available to Native
borrowers. While

[[Page 75837]]

paying an annual premium may be a hardship for some potential
borrowers, HUD believes it will have a limited impact on the demand for
the program, and the new annual premium will allow HUD to continue to
meet the demand for mortgage lending transactions in fiscal year 2017
so that more Indian and Alaska Native families have the opportunity to
become homeowners.
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\2\ Credit Subsidy Rate as defined in the Federal Credit Reform
Act (FCRA) of 1990, as amended by the Balanced Budget Act of 1997.
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To reduce some of the impact accompanying the annual premium, the
payment of the annual premium can be made through monthly payments, to
spread out the cost for borrowers, or annual and lump sum payments, to
keep a borrower's monthly payment lower.
This notice increases the Section 184 program annual premium to
0.25 percent of the remaining loan balance for all new case numbers
assigned on or after December 1, 2016 until the unpaid principal
balance, excluding the upfront loan guarantee fee, reaches 78 percent
of the lower of the initial sales price or appraised value based on the
initial amortization schedule.
This notice does not supersede HUD's guidance on the cancellation
of the annual premium when the loan reaches the 78 percent loan-to-
value ratio that was provided in the October 7, 2014 Notice (79 FR
60492).

IV. Tribal Consultation

HUD's policy is to consult with Indian tribes early in the process
on matters that have tribal implications. Accordingly, on June 26,
2016, HUD sent letters to all tribal leaders participating in the
Section 184 program, informing them of the nature of the forthcoming
notice and soliciting comments. A summary of comments received and
responses can be found on HUD's Web site at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/ih/homeownership/184.

V. Environmental Impact

This notice involves the establishment of a rate or cost
determination that does not constitute a development decision affecting
the physical condition of specific project areas or building sites.
Accordingly, under 24 CFR 50.19(c)(6), this notice is categorically
excluded from environmental review under the National Environmental
Policy Act of 1969 (U.S.C. 4321).

Dated: October 24, 2016.
Lourdes Castro Ramirez,
Principal Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 2016-26331 Filed 10-31-16; 8:45 am]
BILLING CODE 4210-67-P

75836 Federal Register / Vol. 81, No. 211 / Tuesday, November 1, 2016 / Notices

DHS may not be able to contact you for Housing, Department of Housing and has guaranteed over $5.5 billion in
purposes related to the meeting. Urban Development, 451 7th Street SW., current loans.
Accessing and Correcting Room 4126, Washington, DC 20410; On October 7, 2014, HUD issued a
Information: If you are unable to access telephone number 202–401–7914 (this notice exercising its new statutory
or correct this information by using the is not a toll-free number). Persons with authority to implement an annual
method that you originally used to hearing or speech disabilities may premium to the borrower in the amount
submit it, you may direct your request access this number through TTY by of 0.15 percent. (79 FR 60492). The
in writing to the DHS Deputy Chief calling the toll-free Federal Relay notice also provided guidance on the
FOIA Officer at foia@hq.dhs.gov. Service at 800–877–8339. cancellation of the annual premium
Additional instructions are available at SUPPLEMENTARY INFORMATION: when the loan reaches the 78 percent
http://www.dhs.gov/foia and in the loan-to-value ratio. The new annual
DHS/ALL–002 Mailing and Other Lists I. Background premium became effective on November
System of Records referenced above. Section 184 of the Housing and 15, 2014 for all new loan guarantees,
Dated: October 25, 2016. Community Development Act of 1992 including refinances.
Jonathan R. Cantor, (Pub. L. 102–550, approved October 28, II. Increased Premium
Acting Chief Privacy Officer, Department of 1992), as amended by the Native
To meet projected demand for
Homeland Security. American Housing Assistance and Self-
participation in the Section 184 program
[FR Doc. 2016–26275 Filed 10–31–16; 8:45 am] Determination Act of 1996 (Pub. L. 104–
for FY 2017, HUD is increasing the
330, approved October 26, 1996) and
BILLING CODE 9110–9L–P annual premium from 0.15 to 0.25
2013 Consolidated and Further
percent of the remaining loan balance
Continuing Appropriations Act (Pub. L.
until the unpaid principal balance,
113–6, approved March 26, 2013),
DEPARTMENT OF HOUSING AND excluding the upfront loan guarantee
established the Section 184 program to
URBAN DEVELOPMENT fee, reaches 78 percent of the lower of
provide access to sources of private
the initial sales price or appraised value
[Docket No. FR–5974–N–01] mortgage financing to Indian families,
based on the initial amortization
Indian housing authorities, and Indian
Section 184 Indian Housing Loan schedule on all new loans, including
tribes. Congress established this
Guarantee Program Increase to Annual refinances. This increase will apply to
program in 1992 to facilitate
Premium all new program applicants as of the
homeownership and increase access to
effective date of this notice. It will not
AGENCY: Office of the Assistant capital in Native American
apply to existing mortgages guaranteed
Secretary for Public and Indian Communities. The Section 184 program
by this program. Without an increase in
Housing, HUD. addresses obstacles to mortgage
the annual premium, HUD will not have
financing on trust land and in other
ACTION: Notice. sufficient funding to the meet the
Indian and Alaska Native areas by
anticipated demand for Section 184
SUMMARY: The Section 184 Indian giving HUD the authority to guarantee
mortgage loans in FY 2017. The
Housing Loan Guarantee program loans to eligible persons and entities to
decision to increase the annual loan
(Section 184 program) is a home construct, acquire, refinance, or
guarantee premium provides a balanced
mortgage program specifically designed rehabilitate one- to four-family
approach that addresses the current
for American Indian and Alaska Native dwellings in these areas.
demands for the program while focusing
families, Alaska villages, tribes, or The Section 184 Loan Guarantee Fund on the need to remain affordable.
tribally designated housing entities. (the Fund) is used to fulfill obligations By increasing the annual premium
Over the last five years, the Section 184 of the Secretary with respect to the paid by borrowers, the credit subsidy
program has doubled the number of loans guaranteed under this program. rate 2 will go down, and HUD expects
loans and eligible families being The Fund receives annual the program will be able to guarantee
assisted by the program. For HUD to appropriations to cover the cost of the the volume of loans predicted for FY
continue to meet the increasing demand program, and amounts for claims, notes, 2017. An annual premium of 0.25
for participation in this program, HUD mortgages, contracts, and property percent would cost a borrower with a
is exercising its authority to increase the acquired by the Secretary under the $175,000 mortgage (the average loan
annual premium to the borrower from Section 184 program, which reduces the size for the program) an extra $36.18 a
0.15 to 0.25 percent of the remaining amount of appropriations needed to month in total monthly fees on the
loan balance. This annual premium will support the program. In recent years, borrower’s monthly payment or $434.16
continue until the unpaid principal rapidly growing demand has required annually. Since the 0.25 percent annual
balance, excluding the upfront loan HUD to increase the guarantee premium premium is tied to the loan balance, the
guarantee fee, reaches 78 percent of the and implement a new annual upfront annual premium will decrease for the
lower of the initial sales price or fee to support new loan guarantees. borrower every year as the loan balance
appraised value based on the initial HUD issued loan guarantee declines and then disappear after the
amortization schedule. Effective commitments for $495.4 million in loan-to-value ratio reaches 78 percent of
December 1, 2016 the new annual fiscal year (FY) 2011, $670.8 million in the lower of the initial sales price or
premium of 0.25 percent of the FY 2012, $672.3 million in FY 2013, appraised value based on the initial
asabaliauskas on DSK3SPTVN1PROD with NOTICES

remaining loan balance will apply to all $595 million in FY 2014, $738.1 million amortization schedule. Even with these
new loan guarantees, including in FY 2015, and $756.3 million in FY additional costs to borrowers, the
refinances. 2016.1 Additionally, expenses have Section 184 program will still be one of
increased for acquisitions, insurance, the least expensive loan products
DATES: Effective Date: December 1, 2016. and other program costs, and HUD has available to Native borrowers. While
FOR FURTHER INFORMATION CONTACT: seen higher losses now that the Fund
Heidi J. Frechette, Deputy Assistant 2 Credit Subsidy Rate as defined in the Federal
Secretary for Native American 1 Year-to-datecumulative report totaling Section Credit Reform Act (FCRA) of 1990, as amended by
Programs, Office of Public and Indian 184 loans guaranteed through end of July 2016. the Balanced Budget Act of 1997.

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Federal Register / Vol. 81, No. 211 / Tuesday, November 1, 2016 / Notices 75837

paying an annual premium may be a Dated: October 24, 2016. For additional information about
hardship for some potential borrowers, Lourdes Castro Ramirez, submitting comments, see the ‘‘Request
HUD believes it will have a limited Principal Deputy Assistant Secretary for for Public Comments’’ section below.
impact on the demand for the program, Public and Indian Housing. FOR FURTHER INFORMATION CONTACT:
and the new annual premium will allow [FR Doc. 2016–26331 Filed 10–31–16; 8:45 am] Mary E. Jennings (see ADDRESSES).
HUD to continue to meet the demand BILLING CODE 4210–67–P SUPPLEMENTARY INFORMATION:
for mortgage lending transactions in
fiscal year 2017 so that more Indian and Background
Alaska Native families have the DEPARTMENT OF THE INTERIOR We listed the chucky madtom
opportunity to become homeowners. (Noturus crypticus; a small fish) as
Fish and Wildlife Service endangered under the Act (16 U.S.C.
To reduce some of the impact
[FWS–R4–ES–2016–N152]; 1531 et seq.) on August 9, 2011 (76 FR
accompanying the annual premium, the
[FXES11130400000C2–167–FF04E00000] 48722). The chucky madtom grows to
payment of the annual premium can be
2.9 inches (7.4 centimeters) total length
made through monthly payments, to and is endemic to the upper Tennessee
Endangered and Threatened Wildlife
spread out the cost for borrowers, or and Plants; Technical/Agency Draft River system in Tennessee. This fish is
annual and lump sum payments, to Recovery Plan for the Chucky Madtom historically known from two creek
keep a borrower’s monthly payment systems, but only currently persists in
lower. AGENCY: Fish and Wildlife Service, Little Chucky Creek where only 14
This notice increases the Section 184 Interior. individuals have ever been collected.
program annual premium to 0.25 ACTION: Notice of availability and All 14 have been collected at this site
percent of the remaining loan balance request for public comment. since 1991; however, none have been
for all new case numbers assigned on or captured since 2004.
SUMMARY: We, the Fish and Wildlife Chucky madtoms are currently known
after December 1, 2016 until the unpaid Service (Service), announce the
principal balance, excluding the upfront from a single tributary to the
availability of the technical/agency draft Nolichucky River in stream sections 5 to
loan guarantee fee, reaches 78 percent of recovery plan for the endangered
the lower of the initial sales price or 7 meters (16 to 23 feet) wide in riffle
chucky madtom, a fish. The draft and swim through streams lined by
appraised value based on the initial recovery plan includes specific recovery
amortization schedule. water willow (Justicia americana) beds
objectives and criteria that must be met with slow-to-moderate current over pea-
This notice does not supersede HUD’s in order for us to reclassify this species sized gravel, cobble, or slab-rock
guidance on the cancellation of the to threatened status under the substrates. In addition to habitat
annual premium when the loan reaches Endangered Species Act of 1973, as degradation, threats to the species
the 78 percent loan-to-value ratio that amended (Act). We request review and include extreme curtailment of habitat
was provided in the October 7, 2014 comment on this draft recovery plan and range, small population size and
Notice (79 FR 60492). from local, State, and Federal agencies, low numbers, inability to offset
and the public. mortality with natural reproduction and
IV. Tribal Consultation DATES: In order to be considered, recruitment, and their resulting
comments on the draft recovery plan vulnerability to natural or human
HUD’s policy is to consult with
must be received on or before January 3, induced catastrophic events (e.g.,
Indian tribes early in the process on
2017. droughts, pollution spills, etc.).
matters that have tribal implications.
ADDRESSES: Reviewing documents: If Surviving populations are threatened by
Accordingly, on June 26, 2016, HUD
sent letters to all tribal leaders you wish to review this technical/ water quality and habitat deterioration.
agency draft recovery plan, you may Another potential threat is introduced
participating in the Section 184
obtain a copy by contacting Mary E. crayfishes (Orconectes sp.), which are
program, informing them of the nature
Jennings, Field Supervisor, U.S. Fish thought to compete with chucky
of the forthcoming notice and soliciting and Wildlife Service, Tennessee madtoms for access to the little habitat
comments. A summary of comments Ecological Services Field Office, 446 that is available in Little Chucky Creek.
received and responses can be found on Neal Street, Cookeville, TN 38501; tel. Approximately 20 river miles (32
HUD’s Web site at: http:// 931–528–6481; or by visiting the river kilometers) of stream channels in
portal.hud.gov/hudportal/HUD?src=/ Service’s Tennessee Field Office Web Little Chucky Creek, Greene County,
program_offices/public_indian_ site at http://www.fws.gov/cookeville. Tennessee, have been designated as
housing/ih/homeownership/184. Submitting comments: If you wish to critical habitat for the chucky madtom
V. Environmental Impact comment, you may submit your (77 FR 63604). This fish has a recovery
comments by one of the following priority number of 5 which indicates the
This notice involves the methods: species faces a high degree of threat, but
establishment of a rate or cost 1. You may submit written comments has a low recovery potential.
determination that does not constitute a and materials to us, at the above Restoring an endangered or
development decision affecting the address. threatened animal or plant to the point
2. You may hand-deliver written where it is again a secure, self-
asabaliauskas on DSK3SPTVN1PROD with NOTICES

physical condition of specific project
areas or building sites. Accordingly, comments to our Tennessee Field sustaining member of its ecosystem is a
under 24 CFR 50.19(c)(6), this notice is Office, at the above address, or fax them primary goal of our endangered species
categorically excluded from to 931–528–7075. program. To help guide the recovery
environmental review under the 3. You may send comments by email effort, we prepare recovery plans for
to mary_e_jennings@fws.gov. Please most listed species. Recovery plans
National Environmental Policy Act of
include ‘‘Chucky Madtom Draft describe actions considered necessary
1969 (U.S.C. 4321).
Recovery Plan Comments’’ on the for conservation of the species, establish
subject line. criteria for downlisting or delisting, and

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Document Created: 2016-11-01 02:36:48
Document Modified: 2016-11-01 02:36:48

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		Notices
Action		Notice.
Contact		Heidi J. Frechette, Deputy Assistant Secretary for Native American Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 4126, Washington, DC 20410; telephone number 202-401-7914 (this is not a toll-free number). Persons with hearing or speech disabilities may access this number through TTY by calling the toll- free Federal Relay Service at 800-877-8339.
FR Citation		81 FR 75836