[Federal Register Volume 61, Number 41 (Thursday, February 29, 1996)]
[Rules and Regulations]
[Pages 7946-7947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4542]
[[Page 7945]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 266
Regulatory Reinvention; Streamlining of Housing Finance Agency Risk-
Sharing Program for Insured Affordable Multifamily Project Loans; Final
Rule
Federal Register / Vol. 61, No. 41 / Thursday, February 29, 1996 /
Rules and Regulations
[[Page 7946]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
24 CFR Part 266
[Docket No. FR-3981-F-01]
RIN 2502-AG60
Regulatory Reinvention; Streamlining of Housing Finance Agency
Risk-Sharing Program for Insured Affordable Multifamily Project Loans
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Final rule.
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SUMMARY: This final rule streamlines HUD's regulations governing the
Housing Finance Agency (HFA) Risk-Sharing program at 24 CFR part 266.
Specifically, this rule removes regulatory provisions from part 266
which are best set forth in non-regulatory guidance. Under the HFA
Risk-Sharing Program, HFAs are permitted to originate and service
mortgage loans that are fully insured by the Federal Housing
Administration. Participating HFAs are required to share in the risk
associated with monetary losses that may result from loan defaults.
HUD's elimination of redundant or unnecessary language from part 266
will increase program flexibility and assist in HUD's continuing
efforts to streamline title 24.
EFFECTIVE DATE: April 1, 1996.
FOR FURTHER INFORMATION CONTACT: Jane Luton, Director, New Products
Division, Office of Multifamily Housing Development, Room 6142,
Department of Housing and Urban Development, 451 Seventh Street, SW,
Washington, DC 20410, telephone number (202) 708-2556 (this is not a
toll-free number). For hearing- and speech-impaired persons, this
number may be accessed via TDD by calling the Federal Information Relay
Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
On March 4, 1995, President Clinton issued a memorandum to all
Federal departments and agencies regarding regulatory reinvention. In
response to this memorandum, HUD conducted a page-by-page review of its
regulations to determine which can be eliminated, consolidated, or
otherwise improved. As part of this review, HUD reexamined its
regulations governing the Housing Finance Agency (HFA) Risk-Sharing
Program at 24 CFR part 266. Under the HFA Risk-Sharing Program, HFAs
are permitted to originate and service mortgage loans that are fully
insured by the Federal Housing Administration. Participating HFAs are
required to share in the risk associated with monetary losses that may
result from loan defaults.
HUD has determined that the regulations for the HFA Risk-Sharing
Program can be improved and streamlined by eliminating unnecessary
provisions. After careful consideration, HUD has decided to retain most
of part 266, inasmuch as the regulations are incorporated by reference
in each approved HFA's Risk-Sharing Agreement. Since the Risk-Sharing
Agreement forms the basis for operating the program, it is in HUD's
interest, and that of program participants, to retain most sections of
part 266. However, this final rule removes those sections of part 266
concerning the application process and the contents of the Risk-Sharing
Agreement.
With respect to the section on application requirements,
applications are solicited through publication of a notice in the
Federal Register. Since that notice contains the requirements for
submitting an application, including required exhibits, it is
unnecessary to repeat such requirements in part 266. Therefore, this
final rule revises Sec. 266.105, which concerns the application
requirements, to simply state that HUD will identify all necessary
requirements for the submission of an application through Federal
Register notice.
With respect to the section on the contents of the Risk-Sharing
Agreement, an agreement for use by State and local HFAs participating
in the program has been developed. Therefore, it is no longer necessary
to list the items to be included in the Risk-Sharing Agreement.
Accordingly, this final rule amends Sec. 266.15 to remove such a list.
II. Justification for Final Rulemaking
HUD generally 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 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'' (24 CFR 10.1). HUD finds that good cause exists
to publish this rule for effect without first soliciting public
comment. This final rule merely removes unnecessary provisions which
can best be set forth in non-regulatory guidance. This rule does not
establish or affect substantive policy. Therefore, prior public comment
is unnecessary.
III. Other Matters
A. Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and approved this final rule, and in so
doing certifies that this rule will not have a significant economic
impact on a substantial number of small entities. This rule merely
streamlines 24 CFR part 266 by removing provisions which do not require
regulatory codification. The rule will have no adverse or
disproportionate economic impact on small businesses.
B. Environmental Impact
This rulemaking does not have an environmental impact. This
rulemaking simply amends an existing regulation by streamlining
provisions and does not alter the environmental effect of the
regulations being amended. A Finding of No Significant Impact with
respect to the environment was made in accordance with HUD regulations
in 24 CFR part 50 that implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of
development of regulations implementing the HFA Risk-Sharing Program.
That finding remains applicable to this rule and is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk, Office of General Counsel, Room
10276, Department of Housing and Urban Development, 451 Seventh Street,
SW, Washington, DC.
C. Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that 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. No programmatic or policy changes
will result from this rule that would affect the relationship between
the Federal Government and State and local governments.
D. Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule will not have
the potential for significant impact on
[[Page 7947]]
family formation, maintenance, or 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.
List of Subjects in 24 CFR Part 266
Aged, Fair housing, Intergovernmental relations, Mortgage
insurance, Low and moderate income housing, Reporting and recordkeeping
requirements.
Accordingly, 24 CFR part 266 is amended as follows:
PART 266--HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED
AFFORDABLE MULTIFAMILY PROJECT LOANS
1. The authority citation for 24 CFR part 266 continues to read as
follows:
Authority: 12 U.S.C. 1707; 42 U.S.C. 3535(d).
2. Section 266.15 is revised to read as follows:
Sec. 266.15 Risk-Sharing Agreement.
Execution of a Risk-Sharing Agreement is a prerequisite to
participation in this program. The Risk-Sharing Agreement shall be in a
form acceptable to the Commissioner.
3. Section 266.105 is revised to read as follows:
Sec. 266.105 Application requirements.
(a) Applications for approval as a HUD-approved multifamily
mortgagee. HFAs that are not HUD-approved mortgagees at the time of
their application to participate in the program under this part must
submit, concurrently, separate applications for approval to participate
in the program and for approval to operate as a HUD-approved mortgagee.
Application for approval as a HUD-approved mortgagee must be submitted
to HUD in accordance with the applicable HUD requirements.
(b) Applications for participation in program. Applications from
HFAs for approval to participate in the program under this part will be
submitted in response to a notice published in the Federal Register.
The notice will include the required application exhibits and any other
information or documentation necessary for approval for participation
in the Risk-Sharing Program.
Dated: February 22, 1996.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 96-4542 Filed 2-28-96; 8:45 am]
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