[Federal Register Volume 74, Number 237 (Friday, December 11, 2009)]
[Notices]
[Page 65781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-29532]



[[Page 65781]]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5368-N-01]


Public Housing Mortgage Program: Notice of Web Publication

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

ACTION: Notice.

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SUMMARY: Public housing a agencies (PHAs) are authorized, by statute, 
to mortgage their public housing real estate assets to secure financing 
to undertake development and rehabilitation of low-income housing with 
HUD approval. HUD has currently allowed PHAs to exercise this authority 
on a case-by-case basis. To streamline this process, HUD has posted on 
its Web site a proposed notice that proposes the terms and conditions 
by which PHAs may undertake such financing with HUD approval. HUD 
invites PHAs and interested members of the public to review this 
proposed notice and submit comments in accordance with the procedures 
provided in this Federal Register notice. HUD is seeking public 
comments on this proposed notice as it proceeds to formalize final 
guidance for the exercise of this financing authority.

DATES: Comment Due Date: January 31, 2010.

ADDRESSES: Interested persons are invited to submit comments regarding 
the public housing mortgage program notice, which can be found at: 
http://www.hud.gov/offices/pih/programs/ph/capfund/phmp.cfm, by the due 
date. Comments may be submitted via mail to: PHMP Comments, C/o 
Dominique Blom, Deputy Assistant Secretary, Office of Public Housing 
Investments, Room 4134, Department of Housing and Urban Development, 
451 7th Street, SW., Washington, DC 20410.
    Comments may also be submitted via e-mail to: [email protected].
    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying in Room 4134 at HUD Headquarters. Due to 
security measures at the HUD Headquarters building, an advance 
appointment to review the public comments must be scheduled by calling 
the contact person listed below. Individuals with speech or hearing 
impairments may access this number via TTY by calling the Federal 
Information Relay Service, toll-free, at 800-877-8339.

FOR FURTHER INFORMATION CONTACT: Kevin Gallagher, Capital Program 
Division, Office of Public and Indian Housing, Department of Housing 
and Urban Development, 451 7th Street, SW., Washington, DC 20410-8000; 
telephone number 202-402-4192 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access this number through 
TTY by calling the toll-free Federal Information Relay Service at 800-
877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 30 of the United States Housing Act of 1937 (1937 Act) (42 
U.S.C. 1437z-2), entitled ``Public Housing Mortgages and Security 
Interest,'' authorizes PHAs, subject to HUD approval, to pledge or 
mortgage public housing projects or other property of the PHA and 
specifically provides as follows:

    (a) GENERAL AUTHORIZATION--The Secretary may, upon such terms 
and conditions as the Secretary may prescribe, authorize a public 
housing agency to mortgage or otherwise grant a security interest in 
any public housing project or other property of the public housing 
agency.

    Since 2005, HUD has allowed PHAs to exercise this authority by 
entering into property mortgages to obtain financing for development 
and rehabilitation of dwelling units. HUD has posted, on its Web site, 
a proposed notice, providing more information and procedures for PHAs 
obtaining HUD approval to enter into such financing arrangements. This 
proposed notice, upon which HUD invites comment, is available at http://www.hud.gov/offices/pih/programs/ph/capfund/phmp.cfm. HUD seeks 
comments on any issues raised by this proposed notice, and particularly 
on the provisions regarding precedence of security interests for 
dwelling and non-dwelling units.
    As will be seen upon review of this proposed notice, HUD proposes 
to consider allowing lenders to take a first lien position on public 
housing non-dwelling property, allowing them, if necessary, to 
foreclose on the property and extinguish any HUD interest. HUD believes 
that this approach for non-dwelling units will incentivize private 
market participation. For dwelling units, a declaration of restrictive 
covenants will constitute first lien position, and, while the property 
can be foreclosed upon, the property will be required to continue to be 
operated in accordance with public housing requirements, including 
eligibility restrictions. While HUD is implementing the Public Housing 
Mortgage program on a case-by-case basis, proposals for transactions in 
which HUD permits potential foreclosure on dwelling units, without 
further HUD review of the foreclosure action, will receive additional 
scrutiny and a higher level of review as HUD has not approved 
transactions utilizing this aspect of the program and is mindful the 
risks involved.
    While HUD seeks comments on any issues raised by this notice, HUD 
is particularly interested in the provisions regarding precedence of 
security interests for dwelling and non-dwelling units.

    Dated: December 4, 2009.
Deborah Hernandez,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. E9-29532 Filed 12-10-09; 8:45 am]
BILLING CODE 4210-67-P