[Federal Register Volume 61, Number 239 (Wednesday, December 11, 1996)]
[Proposed Rules]
[Pages 65298-65299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31307]



[[Page 65297]]

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Part III





Department of Housing and Urban Development





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24 CFR Part 92



HOME Investment Partnerships Program; Additional Streamlining; Proposed 
Rule

  Federal Register / Vol. 61, No. 239 / Wednesday, December 11, 1996 / 
Proposed Rules  

[[Page 65298]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 92

[Docket No. FR-4111-P-01]
RIN 2501-AC30


HOME Investment Partnerships Program--Additional Streamlining

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to streamline the HOME Program regulation 
by: replacing the hearing procedures of the current HOME rule with the 
Department-wide streamlined hearing procedures; removing the closeout 
requirements and instead providing that HOME funds will be closed out 
in accordance with procedures established by HUD; and replacing the 
extensive requirements for the competitive reallocation of HOME funds 
with a citation to the selection factors in the HOME statute and a 
statement of the maximum number of points that may be awarded for each 
factor. In addition, this rule invites comment on establishing a 
separate market interest rate formula for rehabilitation loans.

DATES: Comment due date: February 10, 1997.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Rules Docket Clerk, Office of General 
Counsel, Room 10278, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410. Communications should refer 
to the above docket number and title. A copy of each communication 
submitted will be available for public inspection and copying between 
7:30 a.m. and 5:30 p.m. weekdays at the above address. FAXED comments 
will not be accepted.

FOR FURTHER INFORMATION CONTACT: Mary Kolesar, Director, Program Policy 
Division, Office of Affordable Housing Programs, Room 7162, 451 Seventh 
Street SW., Washington, DC 20410, telephone (202) 708-2470 (this is not 
a toll-free number). A telecommunications device for hearing- and 
speech-impaired persons (TTY) is available at 1-800-877-8339 (Federal 
Information Relay Service).

SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a 
memorandum to all Federal departments and agencies regarding regulatory 
reinvention. In response to this memorandum, the Department of Housing 
and Urban Development conducted a page-by-page review of its 
regulations to determine which can be eliminated, consolidated, or 
otherwise improved. HUD has determined that the regulations for the 
HOME Investment Partnerships Program can be improved and streamlined by 
eliminating unnecessary provisions.
    As a part of HUD's regulatory reinvention initiative, this rule 
proposes three streamlining changes to, and a change to the market rate 
formula in, the HOME regulation at 24 CFR part 92.
    For the first streamlining change, HUD proposes to replace the 
requirements for the competitive reallocation of HOME funds in 
Sec. 92.453, which largely repeat the HOME statute at section 217(c) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)), with a citation to the selection criteria in the statute; 
the maximum number of points that may be awarded for each category of 
criteria (policies, actions, commitment), as is done in the current 
regulation; and a statement that such requirements will be published in 
a Notice of Funding Availability (NOFA) in accordance with the 
requirements of the HUD Reform Act as funds become available.
    Second, this rule proposes to remove the closeout requirements 
specified in Sec. 92.507 and instead provide that, ``HOME funds will be 
closed out in accordance with procedures established by HUD.''
    Third and last, this rule would replace the hearing procedures in 
Sec. 92.552 of the current HOME rule with the Department-wide, 
streamlined, hearing procedures of 24 CFR part 26 published as a final 
rule on September 24, 1996 (61 FR 50208).
    The changes described above are consistent with the general 
reinvention goals of streamlining the requirements of HUD's funding 
programs and maximizing their administrative flexibility. For example, 
removing the current rigid and burdensome closeout requirements permits 
the Department to simplify the closeout process and administer it on 
the basis of the reports and other monitoring information it receives. 
In addition, every recipient of HUD funding and the Department itself 
would benefit from the adoption of uniform hearings procedures that 
would apply to all HUD programs.
    The Department is considering making one additional change to the 
HOME program besides the three described above. The HOME rule currently 
requires a participating jurisdiction (PJ) wishing to claim match 
credit for the value of below-market interest rate loans to calculate 
the yield foregone based upon the difference between the actual 
interest rate charged and the market interest rate established at 
Sec. 92.220(a)(1)(iii)(B). The Department established the formula for 
determining the market interest rate for various types of projects 
based on assumptions involving first mortgage financing.
    In the course of administering the program, the Department has 
received comments asserting that this method undervalues the match 
contribution of below-market interest rate financing for rehabilitation 
loans. HUD recognizes that loans for rehabilitation, whether for home 
improvements or renovation of rental housing, typically carry higher 
market interest rates than first mortgage financing for comparable 
projects. Consequently, the Department is considering amending 
Sec. 92.220(a)(1)(iii)(B) to establish a separate market interest rate 
formula for rehabilitation loans. The Department is soliciting comments 
on this proposed change. Specifically, comment is requested on the 
formula to be used to establish this rate and whether separate rates 
for the type or tenure of housing would be appropriate.

Findings and Certifications

Paperwork Reduction Act

    The information collection requirements for the HOME Investment 
Partnerships Program have been approved by the Office of Management and 
Budget, under section 3504(h) of the Paperwork Reduction Act of 1980 
(44 U.S.C. 3501-3520), and assigned OMB control number 2501-0013. This 
proposed rule does not contain additional information collection 
requirements.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on State, local, and tribal governments and the 
private sector. This rule does not impose any Federal mandates on any 
State, local or tribal governments or the private sector within the 
meaning of the Unfunded Mandates Reform Act of 1995.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations in 24 CFR part 50, 
which implement Section 102(2)(C) of the National Environmental Policy 
Act of 1969, 42 U.S.C. 4332. The Finding of No Significant Impact is 
available for public inspection and copying between 7:30 a.m. and 5:30 
p.m. weekdays in the

[[Page 65299]]

Office of the Rules Docket Clerk, Room 10276, 451 Seventh Street, SW, 
Washington, D.C. 20410.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities, because jurisdictions that are 
statutorily eligible to receive formula allocations are relatively 
larger cities, counties or States. In addition, this rule only proposes 
to streamline regulations by removing unnecessary provisions. The rule 
will have no adverse or disproportionate economic impact on small 
businesses.

Federalism Impact

    The General Counsel has determined, as the Designated Official for 
HUD under section 6(a) of Executive Order 12612, Federalism, that this 
rule does not have federalism implications concerning the division of 
local, State, and federal responsibilities. While the HOME Program 
interim rule was determined to be a rule with federalism implications 
and the Department submitted a Federalism Assessment concerning the 
interim rule to OMB, this proposed rule would only make limited 
adjustments to the interim rule and does not significantly affect any 
of the factors considered in the Federalism Assessment for the interim 
rule.

Impact on the Family

    The General Counsel, as the designated official under Executive 
Order 12606, The Family, has determined that this rule would not have 
significant impact on family formation, maintenance, and general well-
being. Assistance provided under this rule can be expected to support 
family values, by helping families achieve security and independence; 
by enabling them to live in decent, safe, and sanitary housing; and by 
giving them the means to live independently in mainstream American 
society. This rule would not, however, affect the institution of the 
family, which is requisite to coverage by the Order.

    The Catalog of Federal Domestic Assistance Number for the HOME 
Program is 14.239.

List of Subjects in 24 CFR Part 92

    Grant programs--housing and community development, Manufactured 
homes, Rent subsidies, Reporting and recordkeeping requirements.

    Accordingly, part 92 of title 24 of the Code of Federal Regulations 
would be amended to read as follows:

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

    1. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12701-12839.

    2. Section 92.453 is revised to read as follows:


Sec. 92.453   Competitive reallocations.

    (a) HUD will invite applications through Federal Register 
publication of a Notice of Funding Availability (NOFA), in accordance 
with section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 (42 U.S.C. 3545) and the requirements of sec. 217(c) 
of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)), for HOME funds that become available for competitive 
reallocation under Sec. 92.451 or Sec. 92.452, or both. The NOFA will 
describe the application requirements and procedures, including the 
total funding available for the competition and any maximum amount of 
individual awards. The NOFA will also describe the selection criteria 
and any special factors to be evaluated in awarding points under the 
selection criteria.
    (b) The NOFA will include the selection criteria at sec. 217(c) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)), with the following maximum number of points awarded for each 
category of criteria:
    (1) Commitment. Up to 25 points for the criteria at sec. 217(c)(1) 
of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)(1));
    (2) Actions. Up to 50 points for the criteria at sec. 217(c)(2) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)(2)); and
    (3) Policies. Up to 25 points for the criteria at sec. 217(c)(3) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)(3)).
    3. Section 92.507 is revised to read as follows:


Sec. 92.507   Closeout.

    HOME funds will be closed out in accordance with procedures 
established by HUD.
    4. In Sec. 92.552, paragraph (b) is revised to read as follows:


Sec. 92.552   Notice and opportunity for hearing; sanctions.

* * * * *
    (b) Proceedings. When HUD proposes to take action pursuant to this 
section, the respondent in the proceedings will be the participating 
jurisdiction or, at HUD's option, the State recipient. Proceedings will 
be conducted in accordance with 24 CFR part 26.

    Dated: October 31, 1996.
Henry G. Cisneros,
Secretary.
[FR Doc. 96-31307 Filed 12-10-96; 8:45 am]
BILLING CODE 4210-32-P