[Federal Register Volume 84, Number 170 (Tuesday, September 3, 2019)]
[Proposed Rules]
[Pages 45927-45929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18773]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 84, No. 170 / Tuesday, September 3, 2019 /
Proposed Rules
[[Page 45927]]
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 3565
[Docket No. RHS-19-MFH-0017]
RIN 0575-AD15
Guaranteed Rural Rental Housing Change in Initial Guarantee Fee
and Annual Guarantee Fee
AGENCY: Rural Housing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Housing Service (RHS or the Agency) is proposing to
amend its regulation to remove the stated amount that the Agency will
charge for the initial and annual guarantee fees. The regulation change
will allow the Agency the flexibility to establish or make any future
changes to the initial and annual guarantee fees without the need for a
regulatory change.
DATES: Comments on the proposed rule must be received on or before
November 4, 2019.
ADDRESSES: You may submit comments to this rule by any of the following
methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov and, in the lower ``Search Regulations and Federal
Actions'' box, select ``Rural Housing Service'' from the agency drop-
down menu, then click on ``Submit.'' In the Docket ID column, select
RHS-19-MFH-0017 to submit or view public comments and to view
supporting and related materials available electronically. Information
on using Regulations.gov, including instructions for accessing
documents, submitting comments, and viewing the docket after the close
of the comment period, is available through the site's ``User Tips''
link.
Postal Mail/Commercial Delivery: Submit written comments
to Michele L. Brooks, Director, Innovation Center--Regulations
Management Division, Rural Development, U.S. Department of Agriculture,
STOP 1522, 1400 Independence Avenue SW, Washington, DC 20250-1522. All
written comments will be available for public inspection during regular
work hours at 1400 Independence Avenue SW, Mailstop 1522, Washington,
DC 20250.
FOR FURTHER INFORMATION CONTACT: Tammy Daniels, Finance and Loan
Analyst, Multi-Family Housing Guaranteed Loan Division, Rural Housing
Service, U.S. Department of Agriculture, STOP 0781-Room# 1263S, 1400
Independence Avenue SW, Washington, DC 20250-0781, Telephone: (202)
720-0021 (this is not a toll-free number); email:
[email protected].
SUPPLEMENTARY INFORMATION:
Background and Summary of Changes
RHS administers the Section 538 Guaranteed Rural Rental Housing
Program (GRRHP) under the authority of the Housing Act of 1949, as
amended (42 U.S.C. 1490p-2). Under the GRRHP, RHS guarantees loans for
the development of housing and related facilities in rural areas.
Section 538(g) authorizes the Secretary of Agriculture to charge
certain fees to lenders for loan guarantees. See 42 U.S.C. 1490p-2(g).
The charged fees are required to be used to offset costs associated
with loan guarantees. See 42 U.S.C. 1490p-2(u).
The Agency's GRRHP implementing regulation is at 7 CFR part 3565
and currently sets the exact percentage of the initial guarantee fee
and the annual guarantee fee charged by the Agency. The Agency is
proposing to amend the regulation by removing the language that
indicates the specific amount of the initial guarantee fee and the
annual guarantee fee currently charged by the Agency. The Agency is
making this change to allow for flexibility and to allow the program to
create the maximum housing affordability to residents by lowering
program costs when practical. In most cases, the annual guarantee fee
is passed onto the borrower, where it is most likely included in the
interest rate. Thus, any reduction in the fee will result in a lower
interest rate and would ultimately create a reduction in rental rates.
The calculation of the initial guarantee fee is the product of the
percentage of the guarantee times the initial principal amount of the
guaranteed loan. The initial guarantee fee will be due at the time the
closing package is submitted to the Agency for review and approval. The
GRRHP annual fee is a non-refundable amount that the lender must pay
the year that the loan closes and going forward each year that the loan
guarantee remains in effect. Due to the negative subsidy, combined with
the overall health of the Section 538 GRRHP portfolio, the Agency would
like to have the flexibility in its regulation to reduce the annual
guarantee fee due on the outstanding principal amount of the loan that
will be charged each year or portion of a year that the guarantee is in
effect. For example, if a guaranteed loan closes on any date between
January 1 and December 31, 2018, the effective date for the fee
determination will be December 31, 2018. The annual fee will be
collected by February 28, 2019, and each calendar year going forward
while the guarantee remains in effect.
If changes do occur in the fee amounts, the Agency will release
those changes through a notice in the Federal Register. When the fee
changes are announced in the Federal Register, the Agency will provide
guidance on how to process the loans which will be impacted by the new
fee structure. Interested parties will be able to locate current fees
on the Agency's public website.
Executive Order 12866--Classification
This proposed rule has been determined to be non-significant and;
therefore, was not reviewed by the Office of Management and Budget
(OMB) under Executive Order 12866.
Authority
The Guaranteed Rural Rental Housing program (GRRHP) is administered
subject to appropriations by the U.S. Department of Agriculture (USDA)
as authorized under the Housing Act of 1949 as amended, Section 538,
Public Law 106-569, 42 U.S.C. 1490 p-2.
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR part 1970,
subpart A, ``Environmental Policies.'' RHS determined that this action
does not constitute a major Federal action significantly affecting the
quality of the environment. In accordance with the National
Environmental Policy Act of 1969, Public Law 91-190, an
[[Page 45928]]
Environmental Impact Statement is not required.
Regulatory Flexibility Act
The rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has
determined and certified by signature on this document that this rule
will not have a significant economic impact on a substantial number of
small entities since this rulemaking action does not involve a new or
expanded program nor does it require any more action on the part of a
small business than required of a large entity.
Executive Order 13132--Federalism
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the National
Government and the States, or on the distribution of power and
responsibilities among the various levels of Government. This rule does
not impose substantial direct compliance costs on State and local
Governments; therefore, consultation with States is not required.
Executive Order 12988--Civil Justice Reform
This rule has been reviewed under Executive Order 12988. In
accordance with this rule: (1) Unless otherwise specifically provided,
all State and local laws that conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule except
as specifically prescribed in the rule; and (3) administrative
proceedings of the National Appeals Division of the Department of
Agriculture (7 CFR part 11) must be exhausted before bringing suit in
court that challenges action taken under this rule.
Unfunded Mandate Reform Act (UMRA)
Title II of the UMRA, Public Law 104-4, establishes requirements
for Federal Agencies to assess the effects of their regulatory actions
on State, local, and tribal Governments and on the private sector.
Under section 202 of the UMRA, Federal Agencies generally must prepare
a written statement, including cost-benefit analysis, for proposed and
Final Rules with ``Federal mandates'' that may result in expenditures
to State, local, or tribal Governments, in the aggregate, or to the
private sector, of $100 million or more in any one-year. When such a
statement is needed for a rule, section 205 of the UMRA generally
requires a Federal Agency to identify and consider a reasonable number
of regulatory alternatives and adopt the least costly, more cost-
effective, or least burdensome alternative that achieves the objectives
of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for State, local, and tribal
Governments or for the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
Paperwork Reduction Act
The information collection requirements contained in this
regulation have been approved by OMB and have been assigned OMB control
number 0575-0189. This proposed rule contains no new reporting and
recordkeeping requirements that would require approval under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
E-Government Act Compliance
RHS is committed to complying with the E-Government Act by
promoting the use of the internet and other Information Technologies in
order to provide increased opportunities for citizen access to
Government information, services, and other purposes.
Programs Affected
The program affected by this regulation is listed in the Catalog of
Federal Domestic Assistance under numbers 10.438--Rural Rental Housing
Guaranteed Loans (Section 538).
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
This executive order imposes requirements on RHS in the development
of regulatory policies that have tribal implications or preempt tribal
laws. RHS has determined that the rule does not have a substantial
direct effect on one or more Indian tribe(s) or on either the
relationship or the distribution of powers and responsibilities between
the Federal Government and Indian tribes. Thus, this rule is not
subject to the requirements of Executive Order 13175. If tribal leaders
are interested in consulting with RHS on this rule, they are encouraged
to contact USDA's Office of Tribal Relations or RD's Native American
Coordinator at: [email protected] to request such a consultation.
Executive Order 12372--Intergovernmental Consultation
These loans are subject to the provisions of Executive Order 12372,
which require intergovernmental consultation with State and local
officials. RHS conducts intergovernmental consultations for each loan
in accordance with 2 CFR part 415, subpart C.
Non-Discrimination Statement
In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, the USDA, its
Agencies, offices, employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, gender identity (including
gender expression), sexual orientation, disability, age, marital
status, familial/parental status, income derived from a public
assistance program, political beliefs, or reprisal or retaliation for
prior civil rights activity, in any program or activity conducted or
funded by USDA (not all bases apply to all programs). Remedies and
complaint filing deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (e.g., Braille, large print,
audiotape, American Sign Language, etc.) should contact the responsible
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or
contact USDA through the Federal Relay Service at (800) 877-8339.
Additionally, program information may be made available in languages
other than English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or
write a letter addressed to USDA and provide in the letter all of the
information requested in the form. To request a copy of the complaint
form, call (866) 632-9992, submit your completed form or letter to USDA
by:
(1) Mail: U.S. Department of Agriculture, Director, Office of
Adjudication, 1400 Independence Avenue SW, Washington, DC 20250-9410;
(2) Fax: (202) 690-7442; or
(3) Email: [email protected].
USDA is an equal opportunity provider, employer, and lender.
List of Subjects in 7 CFR 3565
Conflict of interest, Credit, Fair housing, Loan programs-housing
and community development, Low and moderate-income housing,
Manufactured homes, Mortgages, Rent subsidies, Reporting and
recordkeeping requirements, Rural areas.
[[Page 45929]]
For the reasons set forth in the preamble, 7 CFR part 3565 is
proposed to be amended as follows:
PART 3565--GUARANTEED RURAL RENTAL HOUSING PROGRAM
0
1. The authority citation for part 3565 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C 1989; 42 U.S.C. 1480.
Subpart B--Guarantee Requirements
0
2. Amend Sec. 3565.53 introductory text by adding a sentence at the
end and revising paragraphs (a) and (b) to read as follows:
Sec. 3565.53 Guarantee fees.
* * * Changes to the initial and annual guarantee fees will be
established by the Agency and will be published in a Notice in the
Federal Register.
(a) Initial guarantee fee. The Agency will establish and charge an
initial guarantee fee of up to one percent of the guarantee amount. For
purposes of calculating this fee, the guarantee amount is the product
of the percentage of the guarantee times the initial principal amount
of the guaranteed loan.
(b) Annual guarantee fee. An annual guarantee fee will be charged,
as established by the Agency, each year or portion of a year that the
guarantee is in effect. This fee will be collected on February 28, of
each calendar year.
* * * * *
Bruce W. Lammers,
Administrator, Rural Housing Service.
[FR Doc. 2019-18773 Filed 8-30-19; 8:45 am]
BILLING CODE 3410-XV-P