[Federal Register Volume 60, Number 59 (Tuesday, March 28, 1995)]
[Rules and Regulations]
[Pages 16032-16033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7552]
[[Page 16031]]
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Part IV
Department of Housing and Urban Development
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24 CFR Part 203
Single Family Mortgage Limits: Redelegation of Authority; Final Rule
and Notice
Federal Register / Vol. 60, No. 59 / Tuesday, March 28, 1995 / Rules
and Regulations
[[Page 16032]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing--Federal Housing
Commissioner
24 CFR Part 203
[Docket No. R-95-1778; FR-3866-F-01]
RIN 2502-AG47
Single Family Mortgage Limits: Redelegation of Authority; Final
Rule
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Final rule.
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SUMMARY: This final rule amends HUD's Single Family Mortgage Insurance
regulations to recognize the redelegation of the authority to increase
Federal Housing Administration (FHA) single family maximum mortgage
limits and designate high cost areas. The FHA Commissioner is
redelegating this authority to certain officials in HUD's local
offices. This redelegation is consistent with the primary objectives of
the recent reorganization of HUD's Office of Housing, which are to
provide local offices with more direct authority and to enhance the
delivery of services to clients.
EFFECTIVE DATE: April 27, 1995.
FOR FURTHER INFORMATION CONTACT: Maynard Curry, Office of Insured
Single Family Housing, Room 9276, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410, telephone
(202) 708-2121, or (202) 708-4594 (TDD). (These numbers are not toll-
free.)
SUPPLEMENTARY INFORMATION:
Background
Section 203(b)(2) of the National Housing Act and 24 CFR
203.18(a)(1) prevent insured mortgages for 1-family residences from
exceeding 95 percent of the median house price for the area, as
determined by the Secretary. To date, the determination of the median
price is based on actual sales prices for new and existing homes. The
authority to make this determination has been delegated to the
Assistant Secretary for Housing-Federal Housing Commissioner (the
Commissioner). The Commissioner issues periodic notices in the Federal
Register announcing the mortgage limits for each area of the country
after determining the median house price for each area. A local HUD
office can recommend interim changes for specific areas based on
locally-gathered information on changes in house prices, but those
changes cannot be announced without approval by the Commissioner.
HUD has recently been reorganized to provide more direct authority
to its local offices regarding operation of its programs. Regulations
that reserve to Headquarters functions that are locally-based, such as
the determination of median house prices in an area, are inconsistent
with the new emphasis on empowerment of local offices.
HUD is taking two actions to recognize the reorganization and to
facilitate the timely adjustment of area mortgage limits in response to
increases1 in median area house prices. First, HUD is amending two
provisions in the current regulations (24 CFR 203.18(h) and
203.18b(b)(2)) to provide greater administrative flexibility regarding
the determination and announcement of mortgage limits based on median
area house prices. Second, HUD is preparing a formal delegation of
authority to identify specified officials in the local offices who are
authorized to determine median area house prices and the resulting
maximum mortgage amounts. HUD is also publishing this delegation of
authority today as a separate document.
\1\HUD has avoided reducing mortgage limits in response to
temporary reductions in local market prices. Therefore, the focus of
this rulemaking is only on increases to mortgage limits.
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HUD expects that increases in median house prices can be determined
at the local level more rapidly than at Headquarters and with
comparable accuracy. Currently Headquarters staff makes recommendations
to the Commissioner based on two approaches. Under the first approach,
a comprehensive review is performed of median house prices in all
areas. This review occurs from time to time, but normally no more
frequently than annually. Price data comes from two sources: the
Federal Housing Finance Board (FHFB) and the WEFA Group, a private
consulting firm. A chart is prepared for approval by the Commissioner
that shows the maximum mortgage amount for each area based on 95
percent of the median house price in the area (subject to a statutory
floor and ceiling on these amounts). The last such chart was published
in the Federal Register on March 15, 1993 (58 FR 13950).
HUD also has a procedure for receiving and reviewing local appeals
between publication of the charts with national updates if ``any party
believes that a mortgage limit established by the Secretary * * * does
not accurately reflect the median house prices in an area.'' 24 CFR
203.18b(a). The party seeking a change in the mortgage limit (typically
a mortgagee or an organization of mortgagees or real estate
professionals) must collect and submit data showing the actual sales
prices for all new and existing homes in the area over a period of time
that varies with the number of sales involved. This data goes to the
local office, which submits a recommendation based on the data to the
Commissioner for a final determination. Once the Commissioner approves
a change in the mortgage limit for an area based on the change in
median house price, the new mortgage limit can be made effective
through an administrative announcement to affected mortgagees in
advance of being included in a Federal Register notice.
Under this final rule, the local appeals approach will serve as the
usual method leading to mortgage limit increases, except that local
offices may also take the initiative in generating submissions of
actual sales price data to compensate for the lack of periodic national
updates. The change in regulations and the delegation of authority do
not prevent the Commissioner from also approving appropriate mortgage
limit increases when information available to the Commissioner
indicates that increases are warranted. The Commissioner may continue
to receive periodic information on median house prices from national
sources such as FHFB and the WEFA Group to confirm the accuracy of
local office determinations. The Commissioner will maintain a national
compilation of mortgage limits for all areas and may choose to continue
periodic publication of a national compilation in the Federal Register
for information purposes.
HUD will add a new chapter to HUD Handbook 4000.2 to ensure that
local offices have adequate instructions on their new role. These
instructions will cover such matters as appropriate sources of house
sales price data, extra weight that may be given to new home sales
prices in certain circumstances, and identification of the pertinent
``area'' in compliance with the statutory definition of that term.
These instructions should ensure a high degree of consistency in
approach among the different local offices.
Justification for Final Rulemaking
In general, HUD publishes a rule for public comment before issuing
a rule for effect, in accordance with its own regulations on rulemaking
in 24 CFR part 10. However, part 10 provides an exception from that
general rule with respect to rules governing HUD's organization or its
own internal practices or procedures. This final rule [[Page 16033]] is
limited to a revision of the respective roles of the Commissioner and
the local offices and therefore qualifies for the exception.
Other Matters
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The
redelegation of authority implemented by this rule is a matter of HUD's
internal practices or procedures, and it will not have an impact on
small entities.
Environmental Impact
In accordance with 40 CFR 1508.4 of the regulations of the Council
on Environmental Quality and 24 CFR 50.20(k) of the HUD regulations,
the policies and procedures contained in this rule relate only to
delegations of authority and therefore are categorically excluded from
the requirements of the National Environmental Policy Act.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule will not have substantial direct effects on
States or their political subdivisions, or the relationship between the
Federal government and the States, or on the distribution of power and
responsibilities among the various levels of government. The
redelegation of authority implemented by this rule is a matter of HUD's
internal practices or procedures. As a result, the rule is not subject
to review under the Order.
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule does not have
potential for significant impact on family formation, maintenance, and
general well-being, and thus is not subject to review under the Order.
No significant change in existing HUD policies or programs will result
from promulgation of this rule, as those policies and programs relate
to family concerns.
Regulatory Agenda
This rule was not listed in HUD's Semiannual Agenda of Regulations
published on November 14, 1994 (59 FR 57632) in accordance with
Executive Order 12866 and the Regulatory Flexibility Act.
List of Subjects in 24 CFR Part 203
Hawaiian Natives, Home improvement, Indians--lands, Loan programs--
housing and community development, Mortgage insurance, Reporting and
recordkeeping requirements, Solar energy.
Accordingly, HUD amends 24 CFR part 203 as follows:
PART 203--SINGLE FAMILY MORTGAGE INSURANCE
1. The authority citation for part 203 is revised to read as
follows:
Authority: 12 U.S.C. 1709, 1710, 1715b, and 1715u; 42 U.S.C.
3535(d).
2. In Sec. 203.18, paragraph (h) is revised to read as follows:
Sec. 203.18 Maximum mortgage amounts.
* * * * *
(h) Notice of maximum mortgage amount. A maximum mortgage amount
based on the 1-family median house price for an area under paragraph
(a)(1) of this section may be made effective by:
(1) Providing direct notice to affected mortgagees through an
administrative issuance; or
(2) Publishing a notice in the Federal Register.
Sec. 203.18b [Amended]
3. In Sec. 203.18b, paragraph (b)(2) is amended by removing the
second sentence.
Dated: March 20, 1995.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 95-7552 Filed 3-27-95; 8:45 am]
BILLING CODE 4210-27-P