[Federal Register Volume 64, Number 78 (Friday, April 23, 1999)]
[Rules and Regulations]
[Pages 19895-19896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10137]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 203 and 204

[Docket No. FR-4288-N-03]
RIN 2502-AH08


Withdrawal of Interim Rule on Builder Warranty for High Ratio 
FHA-Insured Single Family Mortgages for New Homes

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Withdrawal of interim rule.

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SUMMARY: This notice withdraws an interim rule, published on March 25, 
1999, that would have permitted FHA insurance for a mortgage on a new 
home to exceed a 90 percent loan-to-value ratio if the home is covered 
by a 1-year builder warranty that meets the requirements of HUD 
regulations. This rule would have replaced a 10-year builder warranty 
requirement.

DATES: This withdrawal is effective April 23, 1999.

FOR FURTHER INFORMATION CONTACT: Vance Morris, Director, Home Mortgage 
Insurance Division, Room 9266, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410, (202) 708-
2700. (This is not a toll free number.) For hearing- and speech-
impaired persons, this number may be accessed via TTY by calling the 
Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: On March 25, 1999, HUD published an interim 
rule for public comment. This rule, scheduled to take effect on April 
27, 1999, would have permitted FHA insurance for a mortgage on a new 
home to exceed a 90 percent loan-to-value ratio if the home is covered 
by a 1-year builder warranty that meets the requirements of HUD 
regulations. This rule would have eliminated a 10-year builder warranty 
requirement.
    There was favorable reaction to HUD's change in warranty 
requirements when first announced. However, since publication of the 
interim rule, some affected parties have expressed concern about the 
elimination of a 10-year warranty requirement and have requested that 
HUD further consider the matter before allowing the change in warranty 
requirements to take effect.
    HUD continues to believe, as noted in the interim rule, that the 
quality of housing and building technology has improved so 
substantially that a 10-year warranty requirement is excessive, and a 
comprehensive 1-year builder warranty provides valuable consumer 
protection and is consistent with current industry practices and 
requirements. Nevertheless, HUD agrees to further consider this issue.
    HUD is therefore withdrawing the March 25, 1999 interim rule. HUD 
will reissue this rule as a proposed rule and take additional public 
comment on this subject.
    Accordingly, the interim rule to amend 24 CFR parts 203 and 234, 
published on March 25, 1999, at 64 FR 14572, entitled, Builder Warranty 
for High Ratio FHA-Insured Single Family Mortgages for New Homes, is 
hereby withdrawn.


[[Page 19896]]


    Dated: April 15, 1999.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 99-10137 Filed 4-22-99; 8:45 am]
BILLING CODE 4210-27-P