[Federal Register Volume 65, Number 173 (Wednesday, September 6, 2000)]
[Rules and Regulations]
[Pages 53899-53901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22788]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 401
[Docket No. FR-4298-C-08]
RIN 2502-AH09
Multifamily Housing Mortgage and Housing Assistance Restructuring
Program (Mark-to-Market); Correction
AGENCY: Office of Multifamily Housing Assistance Restructuring, HUD.
ACTION: Final rule; correction.
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SUMMARY: This document makes various corrections to the March 22, 2000,
final rule for the Mark-to-Market program administered by HUD's Office
of Multifamily Housing Assistance Restructuring (OMHAR).
DATES: Effective Date: April 21, 2000.
FOR FURTHER INFORMATION CONTACT: Dan Sullivan, Public Policy Analyst,
Office of Multifamily Housing Assistance Restructuring, 1280 Maryland
Ave., SW., Suite 4000, Washington, DC 20024; telephone (202) 708-0001
(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: On March 22, 2000, the Office of Multifamily
Housing Assistance Restructuring (OMHAR) within HUD published a final
rule for the Mark-to-Market program authorized by the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (MAHRA). That
final rule, which took effect on April 21, 2000, replaced an interim
rule published on September 11, 1998 (63 FR 48926). The final rule
contained some errors that need correction.
The purpose of this document is to make various corrections to the
final rule, as follows:
1. Sec. 401.2. ``NHA'' is substituted for ``NA'' as the defined
term for the National Housing Act. Related corrections are made in
Secs. 401.450(b), 401.472(a)(3), and 401.473 (heading and text).
2. Sec. 401.99(a)(2). The word ``or'' is added between ``sale'' and
``transfer'' to conform to the rest of the rule.
3. Sec. 401.99(c). A reference to Sec. 402.4 is now identified as a
reference to Sec. 402.4 ``of this chapter''.
4. Sec. 401.310(d)(1)(ii). The word ``notices'' is corrected to
``notification'' to conform to the preceding sentence in the rule.
5. Sec. 401.450(b). The acronym ``CA'' (referring to a
comprehensive needs assessment) is corrected to read ``CNA''.
[[Page 53900]]
The same correction is made in Sec. 401.503(a)(1).
6. Sec. 401.501(b)(2). An extraneous semi-colon is removed.
7. Sec. 401.502(a). A missing parenthesis is added, the word
``comparable'' is removed from the phrase ``comparable market rent'' to
match a forthcoming revision to Sec. 402.6(a)(2), ``of this chapter''
is added after three references to sections from part 402, a reference
to Sec. 400.500 is corrected to refer to Sec. 401.500, and a reference
to a comprehensive needs assessment is added to conform to a change
made in Sec. 401.450 of the final rule.
8. Sec. 401.550(b). The rule is corrected to require a
Participating Administrative Entity (PAE) to review annually a project
with an ``executed'' Restructuring Plan rather than an ``approved''
Plan, because no annual PAE review is required if a project owner
refuses to execute a Restructuring Plan approved by OMHAR.
9. Sec. 401.558. An extraneous comma is removed from the first
sentence.
10. Sec. 401.595. The word ``a'' in the first sentence was
misplaced and this is corrected. Also, we removed ``initial and
subsequent'' from the phrase ``initial and subsequent contract renewals
under this part [401]''. The language that is removed was unnecessary.
In addition, it could cause confusion because the ``subsequent''
renewal would be governed by 24 CFR part 402 rather than part 401 if
the ``initial renewal'' is approved as part of an approved
Restructuring Plan under part 401.
11. Sec. 401.600. The references to a section 8 contract
``extension'' or similar term, in the heading and text of this section,
are changed to contract ``renewal'' or similar term. MAHRA occasionally
refers to ``extension'' of an expiring section 8 contract rather than
``renewal'' of the contract, as in section 514(d) of MAHRA which
corresponds to Sec. 401.600. However, HUD's use of these terms in part
401 has not always been consistent with the use in the corresponding
MAHRA provisions. In practice HUD has found no need to distinguish
between contract extensions and renewals, and the statutory and
regulatory definition of ``renewal'' does not exclude extensions.
Therefore, to avoid confusion and to match the usage in the forthcoming
related final 24 CFR part 402, part 401 is corrected so that it no
longer refers to both extensions and renewals, but will only refer to
renewals. Related changes are made to Secs. 401.408(k), 401.421(b),
401.554, 401.602(a)(1) and (2), and 401.602(c)(1)(i).
12. Sec. 401.602(a)(1)(i). A missing parenthesis is added.
13. Sec. 401.602(a)(2). The parenthetical reference to section
8(c)(8)(C) of the United States Housing Act of 1937 is removed because
that provision no longer existed when the final rule was issued. It was
combined with section 8(c)(8)(A) by recent amendments to that Act and
section 8(c)(8)(A) is already referenced in this provision of the rule.
We also added ``of this chapter'' after ``Sec. 402.4'' and removed an
apostrophe from ``month's''.
List of Subjects in 24 CFR Part 401
Grant programs--housing and community development, Housing, Housing
assistance payments, Housing standards, Insured loans, Mortgage
insurance, Mortgages.
Accordingly, the following corrections are made to 24 CFR part 401:
PART 401--MULTIFAMILY HOUSING MORTGAGE AND HOUSING ASSISTANCE
RESTRUCTURING PROGRAM (MARK-TO-MARKET)
1. The authority citation for part 401 continues to read as
follows:
Authority: 12 U.S.C. 1715z-1 and 1735f-19(b); 42 U.S.C. 1437f
note and 3535(d).
2. Revise the definition of ``NA'' in Sec. 401.2(c) to read as
follows:
Sec. 401.2 What special definitions apply to this part?
* * * * *
(c) * * *
NHA means the National Housing Act, 12 U.S.C. 1702 et seq.
* * * * *
3. Amend Sec. 401.99 by revising paragraphs (a)(2) and (c) to read
as follows:
Sec. 401.99 How does an owner request a section 8 contract renewal?
(a) * * *
(2) The owner is not suspended or debarred or has been notified by
HUD of any pending suspension or debarment or other enforcement action,
or, if so, a voluntary sale or transfer of the property is proposed in
accordance with Sec. 401.480.
* * * * *
(c) Not eligible for Restructuring Plan. Section 402.5 of this
chapter addresses renewal of project-based assistance for a
Restructuring Plan. An owner of such a project may also request renewal
under Sec. 402.4 of this chapter.
4. Revise the third sentence of Sec. 401.310(d)(1)(ii) to read as
follows:
Sec. 401.310 Conflicts of interest.
* * * * *
(d) * * *
(1) * * *
(ii) * * * The potential PAE may, with its notification, request
that the conflict be waived or may propose how it may eliminate the
conflict. The potential PAE may also request a determination as to the
existence of the conflict. * * *
* * * * *
5. Revise Sec. 401.408(k) to read as follows:
Sec. 401.408 Affordability and use restrictions required.
* * * * *
(k) Owner obligation to accept project-based assistance. Subject to
the availability of appropriated funds, the owner of the project must
accept any offer of renewal of project-based assistance if the offer is
in accordance with the terms and conditions specified in the
Restructuring Plan.
6. Revise Sec. 401.421(b), introductory text, to read as follows:
Sec. 401.421 Rental Assistance Assessment Plan.
* * *
(b) Matters to be assessed. The PAE must include an assessment of
the impact of converting to tenant-based assistance and the impact of
renewing project-based assistance on: * * *
* * * * *
7. Revise Sec. 401.450(b), introductory text, to read as follows:
Sec. 401.450 Owner evaluation of physical condition.
* * * * *
(b) Use of CNA. An owner may comply with paragraph (a) of this
section by submitting a comprehensive needs assessment in accordance
with title IV of the Housing and Community Development Act of 1992 (12
U.S.C. 1715z-1a note) if the CNA: * * *
* * * * *
8. Revise Sec. 401.501(b)(2) to read as follows:
Sec. 401.501 Delivery of notices and recipients of notices.
* * * * *
(b) * * *
(2) The recipient of any Outreach and Training Grant (OTAG) or
Intermediary Technical Assistance Grant (ITAG) for the project
location; and * * *
* * * * *
9. Revise Sec. 401.502(a), introductory text, and (a)(1) to read as
follows:
Sec. 401.502 Notice requirement when debt restructuring will not
occur.
(a) PAE responsibility. If an owner of an eligible project requests
a renewal of
[[Page 53901]]
a section 8 contract without a Restructuring Plan under Sec. 402.4 of
this chapter, HUD or the PAE must notify, or ensure that the owner
notifies, all parties identified in Sec. 401.501 of the request and of:
(1) The availability (as provided in Sec. 401.500(c)(3)) of the
following information:
(i) The owner evaluation of physical condition (OEPC), or a
comprehensive needs assessment (CNA) if used instead of an OEPC, as
required by Sec. 401.450 and Sec. 402.6(a)(3) of this chapter;
(ii) The market analysis required by Sec. 402.6(a)(2) of this
chapter, but without addresses (or other specific information
indicating location) for comparable properties; and
(iii) The items identified in Sec. 401.500(b)(1)(i), (ii), and
(iv); and
* * * * *
10. Revise the first sentence of Sec. 401.550(b) to read as
follows:
Sec. 401.550 Monitoring and compliance agreements.
* * * * *
(b) Periodic monitoring and inspection. At least once a year, a PAE
must review the status of each project for which it developed an
executed restructuring Plan. * * *
* * * * *
11. Revise the first sentence of Sec. 401.554 to read as follows:
Sec. 401.554 Contract renewal and administration.
HUD will offer to renew or extend section 8 contracts as provided
in each Restructuring Plan, subject to the availability of
appropriations and subject to the renewal authority available at the
time of each contract expiration (Sec. 402.5 of this chapter or another
appropriate renewal authority). * * *
12. Revise the first sentence of Sec. 401.558 to read as follows:
Sec. 401.558 Physical condition standards.
The Restructuring Plan must require the owner to maintain the
project in a decent and safe condition that meets the applicable
standards under this section. * * *
13. Revise Sec. 401.595 to read as follows:
Sec. 401.595 Contract and regulatory provisions.
The provisions of chapter VIII of this title will apply to renewal
of a section 8 project-based assistance contract under this part only
to the extent, if any, provided in the contract. Part 983 of this title
will not apply. The term of the contract renewals under this part will
be determined by the appropriate HUD official.
14. Revise Sec. 401.600 to read as follows:
Sec. 401.600 Will a section 8 contract be renewed if it would expire
while an owner's request for a Restructuring Plan is pending?
If a section 8 contract for an eligible project would expire before
a Restructuring Plan is implemented, the contract may be renewed at
rents not exceeding current rents for up to the earlier of 1 year or
closing on the Restructuring Plan under Sec. 401.407. HUD may terminate
the contract earlier if the PAE or HUD determines that an owner is not
cooperative under Sec. 401.402 or if an owner's request is rejected
under Sec. 401.403 or Sec. 401.405. Any renewal of the contract beyond
1 year for a pending Restructuring Plan must be at comparable market
rents or exception rents. A renewal at comparable market rents or
exception rents under this section will not affect a project's
eligibility for the Mark-to-Market Program once it has been initially
established under this part.
15. Amend Sec. 401.602 by revising the first sentence of paragraph
(a)(1)(i), paragraph (a)(2), and paragraph (c)(1)(i) to read as
follows:
Sec. 401.602 Tenant protections if an expiring contract is not
renewed.
(a) Required notices. (1)(i) The owner of an eligible project who
has requested a Restructuring Plan and contract renewal must provide a
12-month notice as provided in section 514(d) if MAHRA, if the owner
later decides not to renew an expiring contract (except due to a
rejection under Secs. 401.101, 401.403, 401.405, or 401.451.) * * *
(2) The owner of an eligible project who has requested a
Restructuring Plan but who has been rejected under Secs. 401.101,
401.403, 401.405, or 401.451 must provide 12 months advance notice
under section 8(c)(8)(A) of the United States Housing Act of 1937,
unless project-based assistance is renewed under Sec. 402.4 of this
chapter.
* * * * *
(c) * * *
(i) If the owner of an eligible project does not renew the project-
based assistance, any eligible tenant residing in a unit assisted under
the expiring contract on the date of expiration will be eligible to
receive assistance on the later of the date of expiration or the date
the owner's obligations under paragraph (b) of this section expire; and
* * * * *
Dated: August 30, 2000.
Camille E. Acevedo,
Assistant General Counsel for Regulations.
[FR Doc. 00-22788 Filed 9-5-00; 8:45 am]
BILLING CODE 4210-01-P