[Federal Register Volume 64, Number 62 (Thursday, April 1, 1999)]
[Notices]
[Pages 15778-15779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8030]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4170-N-19]
RIN 2577-AB74


Indian Housing Block Grant Program: Notice of Revision to 
Transition Requirements--Proceeds of Sales of Former 1937 Act 
Homeownership Units

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

ACTION: Notice of revised transition requirements--proceeds of sales of 
former 1937 Act homeownership units.

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SUMMARY: This notice provides additional and updated guidance relating 
to the sale of homeownership units and to cash management and 
investment policies and procedures. The purpose of this guidance is to 
facilitate the smooth transition from procedures and resources under 
the United States Housing Act of 1937 (1937 Act) to those under the 
Indian Housing Block Grant (IHBG) Program.

DATES: These transition requirements are effective upon publication.

FOR FURTHER INFORMATION CONTACT: Deborah M. Lalancette, National Office 
of Native American Programs, Department of Housing and Urban

[[Page 15779]]

Development, 1999 Broadway, Suite 3390, Denver, CO; telephone (303) 
675-1600 (this is not a toll-free number). Hearing or speech-impaired 
individuals may access this number via TTY by calling the toll-free 
Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    The Native American Housing Assistance and Self-Determination Act 
of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) was enacted on October 26, 
1996, and took effect on October 1, 1997. NAHASDA requires HUD to make 
grants on behalf of Indian tribes to carry out affordable housing 
activities. A final rule to implement NAHASDA and establish the IHBG 
Program was published on March 12, 1998, (63 FR 12334), with an 
effective date of April 13, 1998.
    NAHASDA also required the publication of a notice in the Federal 
Register to establish any requirements necessary for the transition 
from the provision of assistance for Indian tribes and Indian housing 
authorities under the 1937 Act and other related provisions of law to 
the provision of assistance in accordance with NAHASDA. An initial 
transition notice was published on January 27, 1997 (62 FR 3972), with 
revisions published on February 24, 1997 (62 FR 8258), January 27, 1998 
(63 FR 4076), April 15, 1998 (63 FR 18804), and October 2, 1998 (63 FR 
53084).
    This revision to the transition notice requirements addresses the 
treatment of proceeds from the sale of homeownership units. Question 42 
in the transition notice revision published on January 27, 1998 treated 
proceeds from the sale of homeownership units the same as rental and 
homeownership operating reserves, mutual help equity accounts under the 
Mutual Help Homeownership Opportunity Program, and earned home payment 
accounts under the Turnkey III programs for purposes of section 210 of 
NAHASDA. Section 210 states that any funds for programs for low-income 
housing under the United States Housing Act of 1937 that, on the date 
of the applicability of NAHASDA, are owned by, or in the possession or 
under the control of, the IHA for the tribe, including all reserves not 
otherwise obligated, shall be considered assistance under NAHASDA and 
subject to the NAHASDA provisions relating to use of such assistance.
    In response to inquiries, HUD has reconsidered Question 42 and 
determined that section 210 of NAHASDA does not apply to the proceeds 
from the sale of homeownership units. The purpose of the statutory 
requirement for the transition notice is to facilitate the transition 
from the 1937 Act programs to the IHBG program. Proceeds of sale of 
homeownership units under the 1937 Act are not characterized as program 
income under the IHBG regulation. By providing that the proceeds can be 
used for any housing activity, community facility, or economic 
development activity and are not subject to other Federal requirements, 
HUD is seeking to expedite the smooth transition to the IHBG program. 
Accordingly, Question 42 is amended by this notice to remove the 
reference to homeownership unit sales proceeds, and Questions 42A and 
42B are added to provide guidance on the treatment of these proceeds.
    In addition to addressing homeownership unit sales proceeds, this 
notice also revises Question 46 to extend and clarify the applicability 
of PIH Notice 96-33 to cash management and investment policies and 
procedures.

II. Revisions to the January 27, 1998 Transition Notice

    Accordingly, FR Doc. 98-1939, the Indian Housing Block Grant 
Program--Revised Notice of Transition Requirements, published in the 
Federal Register January 27, 1998, 63 FR 4076, is amended as follows:
    1. On page 4085, in column 3, Question 42 and Answer 42 are revised 
to read as follows:
    Question 42. What happens to rental and homeownership operating 
reserves, mutual help equity accounts under the Mutual Help 
Homeownership Opportunity Program, and earned home payment accounts 
under the Turnkey III program?
    Answer 42. Section 210 of NAHASDA states that any funds for 
programs for low-income housing under the United States Housing Act of 
1937 that, on the date of the applicability of the Act, are owned by, 
or in the possession or under the control of, the IHA for the tribe, 
including all reserves not otherwise obligated, shall be considered 
assistance under the Act and subject to the provisions of this Act 
relating to use of such assistance. In other words, the funds are 
considered assistance under NAHASDA and are subject to NAHASDA 
requirements. The funds in the accounts are also subject to existing 
agreements with the homebuyers.
    2. On page 4085, in column 3, a new Question 42A and Answer 42A are 
added to read as follows:
    Question 42A. Can proceeds from the sale of homeownership units be 
used for purposes other than eligible NAHASDA activities?
    Answer 42A. Yes. We have determined that section 210 of NAHASDA 
addresses only the 1937 Act funds provided by HUD and not the proceeds 
from the sale of homeownership units. Proceeds can be used for any 
housing activity, community facility or economic development activity 
that benefits the community. If the use of these funds is currently 
outlined in an Administrative Use Agreement, the Agreement can be 
terminated at the request of the Indian Housing Authority (or successor 
entity). The funds can then be used for any housing activity, community 
facility or economic development activity.
    3. On page 4085, in column 3, a new Question 42B and Answer 42B are 
added to read as follows:
    Question 42B. What Federal requirements would apply to the proceeds 
from the sale of homeownership units?
    Answer 42B. The use of proceeds are not subject to any Federal 
requirements, except that the funds must be used for the activities set 
forth in Answer 42A.
    4. On page 4086, in column 1, Answer 46 is revised to read as 
follows (Question 46 is republished for the convenience of readers):
    Question 46. What cash management and investment policies and 
procedures are in effect as of October 1, 1997?
    Answer 46. Current procedures outlined in PIH Notice 96-33 (HA) 
dated June 4, 1996, extended by Notice 98-46 (HA) dated September 1, 
1998, titled ``Required HA Cash Management and Investment Policies and 
Procedures'' will continue to apply to 1937 Act funds which are held in 
reserve accounts until further notice. Please note, however, that 
sections 7(c) and 8 of Notice 98-46 do not apply to 1937 Act funds. 
Also, the limit on maturity dates outlined in section 6 of Notice 96-33 
does not apply.

    Authority: 25 U.S.C. 4116(a).

    Dated: March 26, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-8030 Filed 3-29-99; 2:09 pm]
BILLING CODE 4210-33-P