[Federal Register Volume 75, Number 135 (Thursday, July 15, 2010)]
[Notices]
[Pages 41225-41229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17335]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5410-N-01]


Federal Housing Administration (FHA) First Look Sales Method for 
Grantees, Nonprofit Organizations, and Subrecipients Under the 
Neighborhood Stabilization Programs (NSP)

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

ACTION: Notice.

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SUMMARY: This notice outlines the process by which governmental 
entities, nonprofit organizations, and subrecipients participating in 
the Neighborhood Stabilization Program (NSP) (eligible NSP purchasers) 
are provided a preference to acquire FHA real estate-owned (REO) 
properties under FHA's temporary NSP First Look Sales Method. Eligible 
NSP purchasers may acquire such REO properties for any of the eligible 
uses under the NSP, including rental or homeownership. Today's notice 
also outlines how REO property sales under the FHA First Look Sales 
Method will be facilitated to ensure that NSP and FHA requirements are 
met, and to ensure that compliance with these requirements does not 
impede or otherwise disqualify eligible NSP purchasers from 
successfully participating in the FHA First Look Sales Method.
    While there are currently two separate NSP programs (NSP1 and NSP2) 
created under their own respective authorizing legislation, for 
purposes of this notice the term ``NSP'' shall be used to refer in 
general to all current or future NSP programs, as well as to their 
respective eligible program participants.

DATES: The FHA First Look Sales Method announced in this notice shall 
be in effect from the date of publication of this notice through May 
31, 2013.

FOR FURTHER INFORMATION CONTACT: Vance T. Morris, Director, Office of 
Single Family Asset Management, Office of Housing, Department of 
Housing and Urban Development, 451 7th Street, SW., Room 9172, 
Washington, DC 20410; telephone number 202-708-1672 (this is not a 
toll-free number). Persons with hearing or speech impairments may 
access this number via TTY by calling the toll-free Federal Information 
Relay Service at 800- 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. Neighborhood Stabilization Program (NSP)

    Title III of Division B of the Housing and Economic Recovery Act, 
2008 (Pub. L. 110-289, approved July 30, 2008) (HERA) appropriated 
$3.92 billion for emergency assistance for the redevelopment of 
abandoned and foreclosed homes and residential properties, and provides 
under a rule of construction that, unless HERA states otherwise, the 
grants are to be considered Community Development Block Grant (CDBG) 
funds. The grant program under Title III is commonly referred to as the 
Neighborhood Stabilization Program (NSP). HERA authorizes the Secretary 
to specify alternative requirements to any provision under Title I of 
the Housing and Community Development Act of 1974, as amended, (42 
U.S.C. 5301 et seq.) (HCD Act), except for requirements related to fair 
housing, nondiscrimination, labor standards, and the environment 
(including lead-based paint), in accordance with the terms of section 
2301 of HERA and for the sole purpose of expediting the use of grant 
funds.
    On October 6, 2008 (73 FR 58330), HUD published a notice in the 
Federal Register advising the public of the allocation formula and 
allocation amounts, the list of grantees, alternative requirements, and 
waivers granted. On June 19, 2009 (74 FR 29223), HUD published a second 
notice in the Federal Register advising the public of substantive 
revisions to the October 6, 2008, notice, primarily as a result of 
changes to NSP authorized under the American Recovery and Reinvestment 
Act (Pub. L. 111-005, approved February 17, 2009) (Recovery Act).
    Title XII of Division A of the Recovery Act also appropriated 
additional funding under NSP. On May 4, 2009, HUD posted on its website 
the Notice of Funding Availability (NOFA) for the Neighborhood 
Stabilization Program 2 (NSP2) under the Recovery Act. HUD announced 
the posting of the NSP2 NOFA through a Federal Register notice 
published on May 7, 2009 (74 FR 21377). The NSP2 NOFA announced the 
availability of approximately $1.93 billion in competitive grants 
authorized under the Recovery Act. Following issuance of the NSP2 NOFA, 
HUD made some revisions.
    A notice posted on June 11, 2009 clarified, among other things, how 
applicants were to meet the geographic targeting requirements. A second 
notice posted on November 9, 2009, revised the NSP2 NOFA to: (1) 
Correct an inconsistency in the NSP2 NOFA regarding when the lead 
member of a consortium must enter into consortium funding agreements 
with consortium members; and (2) extend the deadline for submission of 
such agreements to January 29, 2010. A third notice posted on January 
21, 2010, specified the NSP2 NOFA deadline date for submission of 
consortium funding agreements. Additional notices posted by HUD on 
April 2, 2010, revise the definitions of ``foreclosed'' and 
``abandoned'' for the purposes of the NSP programs. Notices of the 
changes listed above were published in the Federal Register on June 17, 
2009 (74 FR 28715), November 16, 2009 (74 FR 58973), January 27, 2010, 
(75 FR 4410), and April 9, 2010 (75 FR 18228), and are available on 
HUD's Web site at: http://www.hud.gov/nspta.

B. FHA Temporary First Look Sales Method for Eligible NSP Purchasers

    The purpose of the FHA real estate-owned (REO) property disposition 
program is to dispose of properties in a manner that expands 
homeownership opportunities, strengthens neighborhoods and communities, 
and ensures a maximum return to the mortgage insurance funds. HUD's 
regulations for the program are codified at 24 CFR part 291 (entitled 
``Disposition of HUD-Acquired Single Family Property''). Under the part 
291 regulations, HUD has considerable flexibility in determining 
appropriate methods of sale for REO properties. Section 291.90 provides 
that ``HUD may, in its discretion, on a case-by-case basis or as a 
regular course of business, choose from among'' several sales methods 
identified in the regulations. Further, Sec.  291.90(e) provides that 
``HUD may select any other methods of sale, as determined by the 
Secretary.''
    Consistent with the goals of both NSP, to aid in the redevelopment 
of abandoned and foreclosed homes, and of HUD's REO sales program, to 
expand homeownership opportunities and strengthen communities, this 
notice announces a temporary REO sales method under the authority 
conferred by Sec.  291.90(e). Through the FHA First Look Sales Method 
described in this notice, HUD will afford eligible NSP purchasers with 
a preference (``First Look'') to acquire FHA REO properties that are 
available for purchase within NSP areas. Eligible NSP purchasers may

[[Page 41226]]

acquire such REO properties with the assistance of NSP funds for any 
eligible uses under the NSP, including rental or homeownership.
    The NSP designated areas referred to within this notice shall 
include those areas termed ``areas of greatest need'' under NSP1, 
``target geographies'' under NSP2, and those areas to be given other 
future NSP area designations.

C. Eligible NSP Purchasers

    Governmental entities, nonprofit organizations, and subrecipients 
that have received a HUD-issued Name and Address Identification Number 
(NAID) are eligible to participate in the First Look Sales Method, and 
are referred to throughout this notice as ``eligible NSP purchasers.'' 
For-profit organizations are not eligible to participate in the FHA 
First Look Sales Method. Note: Each FHA REO property purchased by an 
eligible NSP purchaser under the First Look sales method must be 
purchased, at least in part, with the assistance of NSP funds.

II. Procedures and Requirements for Eligible NSP Purchaser 
Participation in FHA First Look Sales Method

A. Eligible NSP Purchaser Application for Electronic Systems Access

    Eligible NSP purchasers (NSP grantees, nonprofit organizations, and 
subrecipients) seeking to acquire FHA REO properties through the FHA 
First Look Sales Method are not required to complete an approval 
process as required of other entities seeking to purchase REO 
properties under the FHA direct sales program. However, entities 
acquiring FHA REO properties must have identifying information entered 
into HUD Single Family Asset Management System (SAMS). Therefore, 
eligible NSP purchasers interested in acquiring FHA REO properties 
through the FHA First Look Sales Method must first submit a completed 
and signed Payee Name and Address Form, SAMS 1111, to the applicable 
FHA Homeownership Center (HOC), along with supporting documentation 
described below.
    Using the information provided under the completed SAMS form, HUD 
will create and assign a unique Name and Address Identification Number 
(NAID) for each entity involved in direct business with HUD. This form 
is available online at: http://www.hud.gov/offices/adm/hudclips/forms/files/1111sams.pdf; instructions are provided on page 2 of the SAMS 
form identifying the required documentation to be attached to the SAMS 
1111 submission in order to successfully obtain a NAID. Note: If an 
eligible NSP purchaser is an entity or organization to which HUD has 
already assigned a NAID, it is still necessary for the entity or 
organization to complete this step in order for their current NAID 
number to be coded for the FHA First Look Sales Method. In either case, 
applicants are directed to read the SAMS 1111 instructions to ensure 
that their NAID application package is submitted with the required 
information and supporting documentation.
    Once an eligible NSP purchaser has submitted its SAMS/NAID 
paperwork to the appropriate HOC, and once these forms have been 
processed and approved, HUD shall generate a NAID number that must be 
used by the eligible NSP purchaser to electronically submit an offer to 
purchase any given FHA REO property available for purchase during the 
FHA First Look purchase period described below under Section E, 
Exercising Purchase Preference. Information about the eligible NSP 
purchaser's NAID number shall be provided to the eligible NSP purchaser 
by HUD's Office of Community Planning and Development (CPD) and its NSP 
contractor.
    State or local government NSP participants, whether HUD direct 
grant recipients or subawardee/subrecipient partners to another grant 
recipient entity, shall submit the following documents as part of their 
NSP NAID application package:
     A completed form SAMS 1111 and supporting documentation as 
specified under the SAMS 1111 instructions;
     A letter from either the chief elected official or by the 
director of the local government agency managing the community's NSP 
funds verifying that it is an NSP recipient or subawardee/subrecipient 
and identifying the government official or staff person or persons who 
has or have been granted signatory authority to purchase any FHA REO 
properties with the assistance of a grantee's NSP funds.
     In each case where the state or local government entity is 
a direct HUD recipient of NSP funds, the letter shall also identify the 
state or local government's NSP grant award number.
    [cir] In each case where a state or local government entity is a 
direct HUD NSP recipient, the letter shall also identify any and all 
organizations and entities (state/county/local government and/or 
nonprofit organization(s)) that are subawardees/subrecipients under the 
state or local government's NSP grant, including all pertinent contact 
information for each (names, titles, addresses, telephone and fax 
numbers, email addresses).
    [cir] In each case where a state or local government entity is an 
NSP subawardee/subrecipient, the letter shall identify the direct HUD 
NSP grant recipient with which the state or local government NAID 
applicant has partnered, including all pertinent contact information 
for the direct recipient partner (name, title, address, telephone and 
fax numbers, and email address), and the direct HUD NSP grant 
recipient's grant award number.
    Nonprofit NSP participants, whether direct HUD grant recipients or 
subawardee/subrecipient partners to another grant recipient entity, 
shall submit the following documents as part of their NSP NAID 
application package:
     A completed form SAMS 1111, and supporting documentation 
as specified under the SAMS 1111 instructions;
     The most current version of the nonprofit's approved 
bylaws, or equivalent legal document, identifying which elected 
nonprofit board officials and/or nonprofit staff have signatory 
authority to execute the purchase of real property on behalf of the 
nonprofit organization and with the nonprofit organization's financial 
resources; and
     A letter from the Executive Director and/or the nonprofit 
Board President/Chair (or equivalent) certifying that the nonprofit is 
an NSP recipient or subawardee/subrecipient and identifying the board 
official(s) and/or nonprofit staff person(s) who have signatory 
authority to execute the purchase of any FHA REO properties assisted 
with the nonprofit's NSP funds. In each case where the nonprofit 
organization is a direct HUD recipient of NSP grant funds, the letter 
shall also identify the nonprofit's NSP grant number.
    [cir] In each case where a nonprofit organization is a direct HUD 
NSP recipient, the letter shall also identify any and all organizations 
and entities (state/county/local government and/or nonprofit 
organization(s)) that are subawardee/subrecipients under the 
nonprofit's NSP grant, including all pertinent contact information for 
each such subrecipient (names, titles, addresses, telephone and fax 
numbers, email addresses).
    [cir] In each case where a nonprofit entity is an NSP subrecipient/
subawardee, the letter shall identify the direct HUD NSP grant 
recipient with which the nonprofit NAID applicant has partnered, 
including all pertinent contact information for the direct recipient 
partner (name, title, address, telephone and fax numbers, email 
address), and the direct HUD NSP grant recipient's grant award number.

[[Page 41227]]

B. Submission of NAID Application Documentation

    Eligible NSP purchasers shall submit the documentation described in 
Section II.A of this notice to the appropriate HOC below, for review 
and approval. Each application submitted by mail must be enclosed in an 
envelope marked: ``ATTENTION--NSP NAID PROCESSING.''

Atlanta HOC: U.S. Dept. of HUD, Atlanta Homeownership Center, 40 
Marietta Street, Atlanta, GA 30303-2806
Denver HOC: U.S. Dept. of HUD, Denver Homeownership Center, 1670 
Broadway, Denver, CO 80202-4801

Philadelphia HOC: U.S. Dept. of HUD, Philadelphia Homeownership Center, 
The Wanamaker Building, 100 Penn Square East, Philadelphia, PA 19107-
3389
Santa Ana HOC: U.S. Department of Housing & Urban Development, Santa 
Ana Homeownership Center, Santa Ana Federal Building, 34 Civic Center 
Plaza, Room 7015, Santa Ana, CA 92701-4003

    Applications for NSP NAID numbers may also be submitted to the 
appropriate HOC via email. All required NAID application documents, 
including those requiring official signatures, must be converted into 
Portable Document Format (.PDF) files and emailed to the appropriate 
HOC. The subject line for each such email submission must read, 
``ATTENTION--NSP NAID PROCESSING.''
    The following email addresses have been established for each 
respective HOC for the express purpose of receiving NSP NAID 
application submissions:

 Denver: [email protected];
 Philadelphia: [email protected];
 Atlanta: [email protected];
 Santa Ana: [email protected].

    Information regarding which HOC has jurisdiction over FHA REO sales 
in a particular state is available online at http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm.
    Additional information about FHA programs and policies is available 
through FHA's toll-free telephone number (800-CALL-FHA/800-225-5342, 
and TDD: 877-833-2483). Information may also be provided by contacting 
FHA by email at [email protected].

C. Duration of FHA First Look Periods: Consideration and Purchase

    FHA REO properties that become available for purchase within an 
NSP-designated area shall be designated as First Look properties. HUD 
CPD and its NSP data mapping contractor will make information available 
to eligible NSP purchasers about FHA REO properties located within NSP-
designated areas on a daily basis, per the receipt of electronic 
boundary files for each NSP designated area, as described under Section 
D, below. The period between conveyance to FHA and the completion of 
the property appraisal shall constitute the First Look consideration 
period, lasting up to 12 business days on average. Once an NSP First 
Look property has been appraised, the eligible NSP purchaser will be 
notified that the property has an appraised sales value and that the 
First Look purchase period has commenced. From this point the eligible 
NSP purchaser shall have two (2) business days to submit an offer to 
the appropriate FHA Management and Marketing (M&M) contractor to 
purchase the property. Information about each contractor and related 
contract submission process instructions shall also be provided to 
eligible NSP purchasers separate from this notice.
    The duration of the entire First Look period may be a total of 14 
days on average. Each such First Look property shall remain available 
for purchase under the First Look Sales Method until an eligible NSP 
purchaser submits an offer to purchase the property (in whole or in 
part with the assistance of NSP funds), or through the expiration of 
the 2-day purchase period, whichever comes first. In the event that no 
eligible NSP purchaser exercises its preference to purchase an FHA REO 
property with the assistance of NSP funds during the 2-day First Look 
purchase period, the M&M contractor shall proceed to market the 
property according to the applicable disposition procedures under 24 
CFR part 291.

D. Submission of Electronic Boundary Files of NSP Designated Areas

    Notification of the availability of FHA REO properties will be made 
available to NSP grantees where the property location is within the 
boundary of the NSP grantees' designated area and for those NSP 
grantees that have applied for and received a HUD-issued NAID. NSP 
grantees are required to submit an amendment to HUD if the designated 
area changes. In addition, the grantee needs to provide HUD with an 
updated jurisdictional boundary file. Submission instructions for NSP 
boundary files and guidance on the approved formats are available at 
http://hudnsphelp.info/index.cfm?do=NSP1info and http://www.huduser.org/portal/nsp1/nsp.html.

E. Exercising Purchase Preference

    Information about the availability of each FHA REO property that is 
available for purchase within a designated NSP area shall be made 
available to eligible NSP purchasers through the CPD NSP contractor 
immediately after the property is conveyed to FHA. Each such FHA REO 
property shall subsequently be appraised and made available for 
purchase by an eligible NSP purchaser under the First Look Sales Method 
for a period of two (2) business days. Before submitting an offer to 
purchase an FHA REO property through the FHA First Look Sales Method, 
and with the assistance of NSP funds, eligible NSP purchasers must 
confirm that the property is within the boundaries of the NSP 
designated area as it was accepted by CPD, regardless of any possible 
errors or generalizations made to the representation of that designated 
area in the boundary file or made by HUD when determining that an FHA 
REO property is within a designated area. After confirmation, eligible 
NSP purchasers should use the NAID to submit offers to purchase.
    In those cases where the boundaries of any two or more NSP areas 
overlap, and where multiple eligible NSP purchasers wish to exercise 
their preference to purchase an FHA REO property that is located in two 
or more such NSP designated areas, the right to purchase the property 
shall be granted to the eligible NSP purchaser that first submits an 
offer to purchase the property in question. FHA REO properties within 
an FHA-approved Asset Control Area shall not be available for purchase 
under the First Look Sales Method.

F. Discounted Sales Price

    For each FHA REO property acquired by an eligible NSP purchaser 
through the FHA First Look Sales Method, and with the assistance of NSP 
funds, FHA, through its applicable M&M contractor, shall sell the 
property to the eligible NSP purchaser at a discounted purchase price 
of 10 percent below the appraised property value, less any applicable 
costs, including commissions. In all cases, the minimum discounted 
purchase price of each FHA REO First Look property purchased by an 
eligible NSP purchaser (in whole or in part with NSP funds) shall be 
one percent off of the appraised property value; in no case shall the 
discounted purchase price

[[Page 41228]]

exceed 99% of the appraised property value. The sales price of each FHA 
REO property is based upon the appraised value of the property. Upon 
request, the date of the FHA appraisal will be made available to the 
NSP purchaser by the M&M contractor.

G. Uniform Relocation Act

    Acquisitions financed with NSP grant funds are subject to the 
Uniform Relocation and Real Property Acquisition Policies Act of 1970 
(URA) and its implementing regulations at 49 CFR part 24, and the 
requirements set forth in the NSP notice published in the Federal 
Register on October 6, 2008. Since eligible NSP purchasers do not have 
the power to condemn FHA REO property, acquisitions through the FHA 
First Look Sales Method may fall under the voluntary acquisition 
exclusion at 49 CFR 24.101(b)(3). That provision exempts certain 
governmental acquisitions from the URA acquisition policies without the 
written disclosures ordinarily provided to private sellers.

H. Tenant Protection Requirements Under PTFA and ARRA

    There are two separate laws concerning tenants in foreclosed 
properties: the Protecting Tenants at Foreclosure Act (PTFA), which is 
part of the Helping Families Save Their Homes Act of 2009 (Pub. L. 111-
22, approved May 20, 2009), and the Recovery Act. On June 24, 2009 (74 
FR 30106), FHA issued a notice on PTFA directed to entities and 
individuals that participate in HUD programs or with whom HUD interacts 
in its programs (for example, approved mortgagees and approved 
nonprofit organizations). The responsibility for meeting the new tenant 
protection requirements applies to all successors in interest of 
residential property, regardless of whether a federally related 
mortgage is present. The immediate successors in interest of 
residential property, which is being foreclosed, bear direct 
responsibility for meeting the requirements of PTFA. The PTFA 
protections are self-executing and became effective on May 20, 2009.
    The Recovery Act includes separate tenant protection requirements. 
In order to use NSP funds to acquire foreclosed residential property, 
the eligible NSP purchaser must perform due diligence to ensure that 
the initial successor in interest to the foreclosed property complied 
with tenant protection requirements specified in the Recovery Act (or 
make a determination that such tenant protection requirements are 
inapplicable), and the grantee must keep adequate documentation of 
tenant protection compliance or inapplicability. Eligible NSP 
purchasers are required to document compliance with the tenant 
protection provisions of the Recovery Act, as follows:

    [T]he grantee shall maintain documentation of its efforts to 
ensure that the initial successor in interest in a foreclosed upon 
dwelling or residential real property has complied with the 
requirements in accordance with Appendix 1, Section K. Acquisition 
and relocation under section K.2.a. and K.2.b. of the May 4, 2009 
NSP2 NOFA. If the grantee determines that the initial successor in 
interest in such property failed to comply with such requirements, 
it may not use NSP funds to finance the acquisition of such property 
unless it assumes the obligations of the initial successor in 
interest specified in section K.2.a. and K.2.b. If a grantee elects 
to assume such obligations, it must provide the relocation 
assistance required pursuant to 24 CFR 570.606 to tenants displaced 
as a result of an activity assisted with NSP funds and maintain 
records in sufficient detail to demonstrate compliance with the 
provisions of that section.

    For each proposed acquisition of an FHA REO property with NSP grant 
funds, the FHA Mortgagee Compliance Manager (MCM) \1\ will provide the 
eligible NSP purchasers with information regarding when each property 
acquired by FHA REO was determined to be vacant and the date that the 
Notice of Foreclosure was issued. Such information may include whether 
only the former mortgagor currently occupies and/or occupied the 
property at the time of the notice of foreclosure, copies of the tenant 
lease, information on the occupants, and/or any notices to vacate that 
the foreclosure attorney who works for the mortgagees may have on file. 
Based upon the information provided, it will be the responsibility of 
the eligible NSP purchaser to determine whether the initial successor 
in interest of a particular foreclosed property was in compliance with 
the Recovery Act and whether the property was eligible for acquisition 
with NSP grant funds.
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    \1\ Michaelson, Connor & Boul, which is referred to at http://www.hud.gov/offices/hsg/sfh/nsc/mcm.cfm.
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I. Contract Contingency Terms

    Properties acquired with NSP funds are subject to a number of other 
federal requirements cited under HUD's regulations before the sale can 
be executed and the funds can be expended. These requirements include, 
but are not limited to: Environmental review, including historic 
preservation and other related laws under 24 CFR part 50 or part 58, as 
applicable; the lead-based paint hazard abatement requirements under 24 
CFR part 35; payment of prevailing wages determined under the Davis-
Bacon Act of 1931, as appropriate; and the URA. The acquisition and 
ultimate disposition of these properties must also comply with 
applicable federal civil rights laws, including, but not limited to, 
Title VI of the Civil Rights Act of 1964 and its implementing 
regulations at 24 CFR part 1; the Fair Housing Act, as amended, and its 
implementing regulations at 24 CFR part 100; Section 504 of the 
Rehabilitation Act of 1973 and its implementing regulations at 24 CFR 
part 8; and the Architectural Barriers Act of 1968.
    Eligible NSP purchasers shall be permitted to submit, and FHA M&M 
vendors shall accept, sales contracts for the purchase of FHA REO 
properties with the assistance of NSP funds under the FHA First Look 
Sales Method that include contingency clauses pertaining to the 
successful completion of the environmental review process, the lead 
paint inspection, and other requirements, as applicable under the NSP. 
Contingency clauses concerning the environmental review process must 
meet the provisions of the NSP Guidance on Conditional Purchase 
Agreements found at http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/pdf/cond_purchase_agreement.pdf.
    Each eligible NSP purchaser is expected to close on the purchase of 
each FHA REO property within the same time frames that apply to non-NSP 
purchasers under FHA requirements. As such, when scheduling the 
settlement date, the M&M contractor shall provide the maximum time 
allowable under applicable FHA requirements to ensure that the eligible 
NSP purchaser is provided with the time necessary to document 
compliance with all applicable NSP requirements. This includes the 
approval by the M&M contractor of any request submitted by an eligible 
NSP purchaser to extend the settlement deadline, per the procedures and 
guidelines provided under Property Disposition Handbook One to Four 
Family Properties (Handbook 4310.5 REV-2) (http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4310.5/index.cfm). Approval of settlement 
deadline extension requests are typically premised upon the fact that a 
purchaser is experiencing extenuating circumstances beyond its control 
and which have a direct impact upon its ability to go to settlement at 
the initially agreed-upon deadline. For eligible NSP purchasers these 
extenuating circumstances may pertain, but may not

[[Page 41229]]

be limited to, the successful completion of various NSP requirements, 
as described above. Any such request for the extension of the 
settlement deadline on the part of the eligible NSP purchaser, and 
subsequent decision on the part of the M&M contractor, must be made in 
writing.
    Note: Prior to signing any sales contract, the HUD Office of Single 
Family Housing will first complete its environmental review 
responsibilities pursuant to 24 CFR part 50, including its 
responsibility to provide notice of site contamination following a 
search of agency files pursuant to section 120(h) of the Comprehensive 
Environmental Response, Liability, and Compensation Act (CERCLA or 
``Superfund'', 42 U.S.C. 9620(h)), and will incorporate any resulting 
conditions in the sales contract. Any remediation of site contamination 
required pursuant to section 120(h) shall be performed prior to 
property transfer. Also as a condition of sale, the purchaser of any 
FHA owned property located in a special flood hazard area and where 
flood insurance is available through the National Flood Hazard 
Insurance Program will be required to obtain flood insurance.
    In the event that an FHA REO property for which an eligible NSP 
purchaser has submitted a contingent sales contract that does not meet 
the standards and requirements under 24 CFR part 35 and/or 24 CFR part 
50 or part 58, or any other applicable statutes, regulations, or 
requirements, or if the NSP purchaser cannot successfully complete the 
various environmental review and other federal requirement reviews 
under the NSP program before the expiration of the required FHA 
deadline; or if the purchase of the property does not otherwise meet 
the eligible NSP purchaser's cost feasibility or other affordable 
housing program requirements, the sales contract shall be terminated at 
no cost to the eligible NSP purchaser. In addition, all obligations of 
the eligible NSP purchaser under the contract shall be extinguished.

J. FHA 90-Day Anti-Frequent Re-Sale Waiver

    On January 15, 2010, FHA issued a waiver of regulations under 24 
CFR 203.37a(b)(2), ``Re-sales occurring 90 days or less following 
acquisition.'' The waiver is effective February 1, 2010, through 
January 31, 2011, unless otherwise extended or withdrawn. On May 21, 
2010 (75 FR 38632), HUD published a notice in the Federal Register 
announcing this waiver and seeking comments from industry, potential 
purchasers, and other interested members of the public on the 
conditions which must be met for the waiver to be provided. Comments 
will be taken into consideration in determining whether any 
modifications should be made to the waiver eligibility conditions. 
Under this waiver, FHA REO properties can be acquired by a purchaser 
and resold by the same purchaser to a homebuyer who has been approved 
to acquire the property with an FHA insured mortgage less than 90 days 
after the initial acquisition. The full text of the anti-frequent re-
sale waiver is available online: http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf. Additional guidance on compliance with the terms of 
this waiver is forthcoming from the Department.

K. Affordability Requirements

    FHA REO properties acquired with NSP funds through the FHA First 
Look Sales Method must meet the NSP affordability requirements, and 
shall otherwise be considered to be the monitoring responsibility of 
CPD. As required by statute and regulation, eligible NSP purchasers 
shall maintain all documentation of compliance with NSP Program 
affordability requirements for each FHA REO property acquisition 
assisted, in whole or in part, with NSP funds, and shall make such 
documentation available for review, upon request of FHA staff and/or 
(consistent with state and local laws regarding privacy and obligations 
for confidentiality) FHA M&M III contractors.

L. Paperwork Reduction Act

    The information collection requirements contained in this notice 
have been approved by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned 
OMB Control Numbers 2502-0306 and 2502-0540. In accordance with the 
Paperwork Reduction Act, an agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information, 
unless the collection displays a currently valid OMB control number.

M. Environmental Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made for this notice in accordance with HUD 
regulations at 24 CFR part 50, which implement section 102(2)(C) of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The 
FONSI is available for public inspection between 8 a.m. and 5 p.m. 
weekdays in the Regulation Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 10276, Washington, DC 20410-0500. Due to security measures at the 
HUD Headquarters building, an advance appointment to review the FONSI 
must be scheduled by calling the Regulations Division at 202-708-3055 
(this is not a toll-free number).

    Dated: July 9, 2010.
David H. Stevens,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2010-17335 Filed 7-14-10; 8:45 am]
BILLING CODE 4210-67-P