[Federal Register Volume 78, Number 7 (Thursday, January 10, 2013)]
[Notices]
[Pages 2280-2281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-00357]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5410-N-03]
Federal Housing Administration (FHA) First Look Sales Method
Under the Neighborhood Stabilization Program (NSP): Increased Discount
on Sales Price for Certain Properties and Clarification of Effective
Dates
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice.
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SUMMARY: On July 15, 2010, HUD published a Federal Register notice
establishing the process by which eligible purchasers under the
Neighborhood Stabilization Program (NSP) are provided a preference to
acquire real-estate owned (REO) properties of FHA under the temporary
Federal Housing Administration (FHA) First Look Sales Method. Under the
First Look Sales Method, eligible NSP purchasers have the opportunity
to purchase REO properties at a discount of 10 percent below their
appraised value, less the cost of any applicable listing and sales
commission. This notice announces an increase in the discount to 15
percent for properties that do not meet the applicable minimum property
standards to be eligible for FHA mortgage insurance. Additionally, HUD
has taken the opportunity afforded by this notice to clarify that the
First Look Sales Method will be in effect until the conclusion of the
NSP.
DATES: The FHA First Look Sales Method shall be in effect until the
conclusion of the NSP.
FOR FURTHER INFORMATION CONTACT: Ivery Himes, 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
On July 15, 2010, at 75 FR 41225, HUD published a Federal Register
notice establishing the process by which certain governmental entities,
nonprofit organizations, and subrecipients participating in the NSP
(eligible NSP purchasers) are provided a preference to acquire REO
properties under the temporary FHA First Look Sales Method. This
temporary REO sales method furthers 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. Through the FHA First Look Sales Method, HUD provides
eligible NSP purchasers with a preference (a ``first look'') to acquire
FHA REO properties that are available for purchase within NSP areas.
Eligible NSP purchasers may acquire such REO properties with the
assistance of NSP funds for any eligible uses under the NSP, including
rental or homeownership. Interested persons should refer to the July
15, 2010, notice for additional details regarding the FHA First Look
Sales Method.
II. This Notice--Increased Discount on Sales Price for Certain REO
Properties Purchased Under the FHA First Look Sales Method
REO properties purchased through the FHA First Look Sales Method
are sold at a discount of 10 percent below the appraised value, less
any applicable costs, including commissions. The minimum discounted
purchase price of a property is one percent off of the appraised
property value; in no case may the discounted purchase price exceed 99
percent of the appraised property value. (See, Section II.F. of the
July 15, 2010, notice, at 75 FR 41227). The ten percent discount has
proved insufficient for REO properties that do not meet the minimum
property standards to be eligible for FHA mortgage insurance because
the property is in need of extensive repairs.\1\ The necessary
rehabilitation or flood insurance expenses, coupled with the lack of
FHA financing, have the potential to make the costs of acquiring these
properties prohibitive to otherwise eligible home purchasers. This lack
of affordability impedes the goal of the FHA First Look Sales Method to
aid in the revitalization of communities through expanded
homeownership. To address this concern, HUD announces an increase in
the discount to 15 percent for properties that do not meet the
applicable FHA minimum property standards. As is currently true, the 15
percent discount shall be subject to any applicable costs, including
commissions, but in no case will the total discounted amount be less
than one percent off of the appraised property value. The discount for
REO properties eligible for FHA mortgage insurance remains at 10
percent of the appraised value of the home.
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\1\ The FHA minimum property standards for existing dwellings
are found in HUD Handbook 4905.1 REV 1, available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh/4905.1.
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In addition to the increase in the sales price discount, this
notice clarifies that the First Look Sales Method will be in effect
until the conclusion of the NSP. HUD's July 15, 2010, notice announced
that the First Look Sales Method would be in effect until May 31, 2013.
This date was based on the expected conclusion of the NSP, and was not
intended to provide for conclusion of the First Look Sales Method prior
to the close of the NSP.
III. Findings and Certifications
Paperwork Reduction Act
The information collection requirements for the FHA First Look
Sales Method 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 Number 2502-0589. In accordance with the
Paperwork Reduction Act, HUD 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.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment for the FHA First Look Sales Method was made at the time of
the July 15, 2010, Federal Register 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, and advance appointment to review the FONSI
must be scheduled by calling the Regulations
[[Page 2281]]
Division at 202-708-3055 (this is not a toll-free number).
Dated: January 4, 2013.
Carol J. Galante,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2013-00357 Filed 1-9-13; 8:45 am]
BILLING CODE 4210-67-P