[Federal Register Volume 71, Number 124 (Wednesday, June 28, 2006)]
[Notices]
[Pages 36968-36969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5866]



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Part VI





Department of Housing and Urban Development





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Changes in Certain Multifamily Mortgage Insurance Premiums; Notice

  Federal Register / Vol. 71, No. 124 / Wednesday, June 28, 2006 / 
Notices  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4679-N-11]


Changes in Certain Multifamily Mortgage Insurance Premiums

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

ACTION: Notice.

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SUMMARY: In accordance with HUD regulations, this notice announces 
changes in the mortgage insurance premiums (MIP) for Federal Housing 
Administration (FHA) multifamily mortgage insurance programs whose 
commitments will be issued or reissued in Fiscal Year 2007. Under the 
Department of Housing and Urban Development Reform Act of 1989 and 
HUD's implementing instructions, a sponsor is required to submit a 
certification regarding governmental assistance, including any low-
income housing tax credits, with all mortgage insurance applications.

DATES: Comment Due Date: July 28, 2006.

ADDRESSES: Interested persons are invited to submit comments regarding 
this notice to the Regulations Division, Office of General Counsel, 
Room 10276, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC 20410-0500. Interested persons also may 
submit comments electronically through The Federal eRulemaking Portal 
at www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically in order to make them immediately available to 
the public. Commenters should follow the instructions provided on that 
site to submit comments electronically.
    Facsimile (fax) comments are not acceptable. In all cases, 
communications must refer to the docket number and title. All comments 
and communications submitted to HUD will be available, without change, 
for public inspection and copying between 8 a.m. and 5 p.m. weekdays at 
the above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at (202) 708-3055 (this 
is not a toll-free number). Copies of all comments submitted are 
available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Eric Stevenson, Director, Policy 
Division, Office of Multifamily Development, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC 20410-8000, 
Telephone: (202) 708-1142 (this is not a toll-free number). Hearing-or 
speech-impaired individuals may access these numbers through TTY by 
calling the Federal Information Relay Service at (800) 877-8339 (this 
is a toll-free number).

SUPPLEMENTARY INFORMATION:

Introduction

    HUD's regulations at 24 CFR 207.252, 207.252a and 207.254 provide 
that instead of setting the MIP at one specific rate for all programs, 
the Secretary is permitted to change an MIP program by program within 
the full range of HUD's statutory authority of one fourth of one 
percent to one percent of the outstanding mortgage principal per annum 
through a notice, as provided in section 203(c)(1) of the National 
Housing Act (the Act) (12 U.S.C. 1709(c)(1)). The rule states that HUD 
will provide a 30-day period for public comment on notices changing 
MIPs in multifamily insured housing programs.
    Pursuant to this 30-day comment procedure, this notice announces 
changes for FY 2006 in the MIP for programs authorized under the Act. 
The effective date for these changes is October 1, 2006.
    These changes affect multifamily housing commitments issued or 
reissued on or after October 1, 2006.
    A. The following MIPs are unchanged:
     All sections of the Act where the mortgagor equity is 
produced from the proceeds of the sale of low-income housing tax 
credits (LIHTC): The MIP remains at 45 basis points.
     The following sections of the Act, without LIHTC: Section 
213 Cooperative Housing remains at 50 basis points, section 221(d)(3) 
Nonprofit/Cooperative mortgagor remains at 80 basis points, section 
223(d) Operating Loss Loans for apartments and health care facilities 
remain at 80 basis points and section 241(a) Improvements/Additions for 
apartments only remain at 80 basis points.
     Premiums for risk sharing applications under sections 
542(b) and 542(c) of the Housing and Community Development Act of 1992 
remain at 50 basis points. Risk-sharing premiums do not appear on the 
following chart because the premium paid by a risk-sharing Housing 
Finance Agency depends on the percentage of risk assumed by it in 
accordance with regulations at 24 CFR 266.604. The premium paid by 
Fannie Mae or Freddie Mac is 50% of 50 basis points. The 50 basis 
points applies to all risk-sharing loans whether or not they have 
LIHTC.
    Listed below are the sections of the Act that will have an increase 
in the MIP rate. All increases apply to insured loans without LIHTC:
     207 Manufactured Home Parks and New Construction/
Substantial Rehabilitation (NC/SR): The MIP will increase from 50 to 77 
basis points.
     221(d)(4) NC/SR: The MIP will increase from 45 to 77 basis 
points.
     232 NC/SR Health Care Facilities: The MIP will increase 
from 57 to 80 basis points.
     220 Urban Renewal Housing: The MIP will increase from 50 
to 77 basis points.
     231 Elderly Housing: The MIP will increase from 50 to 77 
basis points.
     207/223(f) Refinance or Purchase of Apartments: The MIP 
will increase from 45 to 77 basis points.
     232/223(f) Refinance or Purchase of Health Care 
Facilities: The MIP will increase from 50 to 80 basis points.
     223(a)(7) Refinance of Apartments: The MIP will increase 
from 45 to 77 basis points.
     223(a)(7) Refinance of Health Care Facilities: The MIP 
will increase from 50 to 80 basis points.
     241(a) Improvements/Additions for Health Care Facilities: 
The MIP will increase from 57 to 80 basis points.
     242 Hospitals: The MIP will increase from 50 to 80 basis 
points.
     Title XI--Group Practice: The MIP will increase from 50 to 
80 basis points.

Credit Subsidy

    Appropriated positive credit subsidy is required for loan guarantee 
commitments under the three sections of the Act listed. The MIPs remain 
the same as specified earlier in this notice. If the mortgagor's equity 
is produced from LIHTC for Sections 221(d)(3) and 241(a), a credit 
subsidy obligation will not be required. Only nonprofit and nonprofit 
cooperative mortgagors can obtain a 100 percent mortgage under Section 
221(d)(3) of the Act. The nonprofits cannot be under the control or 
influence of profit-motivated entities and continue to require HUD 
approval prior to issuance of the firm commitment.
     Section 221(d)(3) for new construction or substantial 
rehabilitation (NC/SR).
     Section 223(d) for operating loss loans for both 
apartments and health care facilities.
     Section 241(a) for supplemental loans for additions or 
improvements for apartments only.
    The mortgage insurance premiums to be in effect for FHA firm 
commitments issued or reissued in FY 2007 are shown in the table below:

[[Page 36969]]



          Fiscal Year 2007 MIP Rates--Multifamily Loan Program
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                                                              FY07 basis
                   Housing loan programs                        points
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207 Multifamily Housing NC/SR without LIHTC................           77
207 Multifamily Housing NC/SR with LIHTC...................           45
207 Manufactured Home Parks without LIHTC..................           77
207 Manufactured Home Parks with LIHTC.....................           45
221(d)(3) Nonprofit/Cooperative mortgagor without LIHTC....           80
221(d)(3) Limited dividend mortgagor with LIHTC............           45
213 Coop...................................................           50
221(d)(4) NC/SR with LIHTC.................................           45
221(d)(4) NC/SR without LIHTC..............................           77
220 Urban Renewal Housing with LIHTC.......................           45
220 Urban Renewal Housing without LIHTC....................           77
231 Elderly Housing without LIHTC..........................           77
231 Elderly Housing with LIHTC.............................           45
207/223(f) Refinance or Purchase for Apartments with LIHTC.          *45
207/223(f) Refinance or Purchase for Apartments without              *77
 LIHTC.....................................................
223(a)(7) Refinance of Apartments with LIHTC...............           45
223(a)(7) Refinance of Apartments without LIHTC............           77
223d Operating loss loan for Apartments....................           80
241(a) Improvements/additions for Apartments/coop..........           80
241(a) Improvements/additions for Apartments/coop with                45
 LIHTC.....................................................
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                                                              FY07 basis
            Health care facility loan  programs                 points
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232 NC/SR Health Care Facilities...........................           80
232 NC/SR--Assisted Living Facilities with LIHTC...........           45
232/223(f) Refinance for Health Care Facilities without              *80
 LIHTC.....................................................
232/223(f) Refinance for Health Care Facilities with LIHTC.          *45
223(a)(7) Refinance of Health Care Facilities without LIHTC           80
223(a)(7) Refinance of Health Care Facilities with LIHTC...           45
223d Operating loss loan for Health Care Facilities........           80
241(a) Improvements/additions for Health Care Facilities              80
 without LIHTC.............................................
241(a) Improvements/additions for Health Care Facilities              45
 With LIHTC................................................
242 Hospitals..............................................           80
Title XI--Group Practice...................................          80
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*The First Year MIP for the section 207/223(f) loans for apartments is
  one percent for the first year, as specified in sections 24 CFR
  207.252b(a). The first year MIP for 232/223(f) health care facilities
  remains at 100 basis points.

Applicable Mortgage Insurance Premium procedures

    The MIP regulations are found in 24 CFR part 207. This notice is 
published in accordance with the procedures stated in 24 CFR 207.252, 
207.252(a), and 207.254.

Transition Guidelines

A. General

    FHA will honor outstanding commitments issued before October 1, 
2006 and endorse the notes for insurance.

B. Extension of Outstanding Firm Commitments

    FHA may extend or amend outstanding firm commitments issued prior 
to October 1, 2006 when the Hub/Program Center determines that the 
underwriting conclusions (rents, expenses, construction costs, mortgage 
amount and cash required to close) are still valid. If the commitment 
has been extended 90 days from the original expiration date, the 
mortgagee must provide updated appraisal, market cost and mortgage 
credit information. If the loan is processed under Traditional 
Application Processing, the Hub/program center must update its own 
conclusions (appraisal/market study, cost and mortgage credit 
underwriting). A new market study is required if the existing study is 
over one year old.

C. Reopening of Expired Firm Commitments

    Reopening requests for expired firm commitments will be reprocessed 
by FHA field staff with updated appraisal, market, cost and mortgage 
credit information. The new MIP will apply to reopened commitments 
which are reissued on or after October 1, 2006.
    After expiration of the 90-day reopening period, mortgagees are 
required to submit new applications with the $3 per thousand 
application fee.

    Dated: June 22, 2006.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner, H.
[FR Doc. 06-5866 Filed 6-27-06; 8:45 am]
BILLING CODE 4210-67-P