[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80135-80136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27272]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-7024-N-50]


30-Day Notice of Proposed Information Collection: COVID19 HUD 
Contingency Plan for HUD Multifamily Rental Project Closing Documents; 
OMB Control No.: 2502-0618

AGENCY: Office of the Chief Information Officer, HUD.

ACTION: Notice.

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SUMMARY: HUD has submitted the proposed information collection 
requirement described below to the Office of Management and Budget 
(OMB) for review, in accordance with the Paperwork Reduction Act. The 
purpose of this notice is to allow for an additional 30 days of public 
comment.

DATES: Comments Due Date: January 11, 2021.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposal. Written comments and recommendations for the proposed 
information collection should be sent within 30 days of publication of 
this notice to www.reginfo.gov/public/do/Start Printed Page 
15501PRAMain. Find this particular information collection by selecting 
``Currently under 30-day Review--Open for Public Comments'' or by using 
the search function.

FOR FURTHER INFORMATION CONTACT: Colette Pollard, Reports Management 
Officer, QDAM, Department of Housing and Urban Development, 451 7th 
Street SW, Washington, DC 20410; email Colette Pollard at 
[email protected] or telephone 202-402-3400. Persons with hearing 
or speech impairments may access this number through TTY by calling the 
toll-free Federal Relay Service at (800) 877-8339. This is not a toll-
free number. Copies of available documents submitted to OMB may be 
obtained from Ms. Pollard.

SUPPLEMENTARY INFORMATION: This notice informs the public that HUD is 
seeking approval from OMB for the information collection described in 
Section A. The Federal Register notice that solicited public comment on 
the information collection for a period of 60 days was published on 
September 4, 2020 at 85 FR 55312.

A. Overview of Information Collection

    Title of Information Collection: COVID19 HUD Contingency Plan for 
HUD Multifamily Rental Project Closing Documents.
    OMB Approval Number: 2502-0618.
    OMB Expiration Date: 12/32/2020.
    Type of Request: Revision of a currently approved collection.
    Form Numbers: HUD-5985 & HUD-5960.
    Respondents: Business or other for-profit, Not-for-profit 
institutions, State, Local or Tribal Government.
    Estimated Number of Respondents: 612.
    Estimated Number of Responses: 1,224.
    Frequency of Response: Twice per annum.
    Average Hours per Response: 1.00 hour [0.50 x 2 = 1 hour].
    Total Estimated Burdens: 1,224.
    Description of the need for the information and proposed use: This 
is a new collection based on situational conditions relating to the 
COVID-19 Coronavirus outbreak and the Presidential declaration that 
began a national emergency. This new PRA collection will serve as the 
authority for any new or future changes or revisions to multifamily 
programs impacted by COVID-19 or related pandemics.
    The Lender's Certificate, HUD-92434, establishes the conditions, 
which the Lender agrees to abide by in consideration of HUD's 
commitment to FHA-insure mortgages, and by which the Lender certifies 
that the conditions have been fulfilled to date, including any work 
done prior to endorsement of the Note that has been approved by HUD in 
writing, and all HUD imposed conditions that have been met with respect 
to such work. The information collection requirements contained in the 
Lender's Certificate are to oversee the parties' compliance with all 
applicable legal requirements and therefore ensure protection of the 
FHA insurance fund. The HUD-92434M is required by the Closing 
Checklists via the Firm Commitment (Housing Notice 2018-03) and per the 
fact that the underlying forms contemplate hardcopy submission (since 
HUD historically has not accepted electronic submission of documents 
for closing purposes). The Lender's Certification Regarding: Electronic 
Submission of Closing Documents is a modification of the HUD-92434M 
that will set the Office of General Counsel's (``OGC'') temporary 
uniform electronic closing protocols until normal closing can resume 
after the COVID-19 Pandemic.
    Relating to the current COVID-19 Coronavirus outbreak and the 
President declaring a national emergency the Department of Housing and 
Urban Development (``HUD'') and its offices remain open for business at 
this time, many are now engaged in full-time telework. It is therefore 
prudent and appropriate for the OGC, in collaboration with Multifamily 
to establish protocols, rules, and procedures that best ensure 
continuity of operations in the event of an extended closure of a 
specific division, regional or field office, or the determination that 
OGC in its entirety should work remotely. Pursuant to the March 16, 
2020 HUD Memorandum issued for all Regional Counsel and Deputy Regional 
Counsel, all Associate Regional Counsel for Programs and all OGC 
Closing Attorneys, set forth protocols and best practices for the 
continued provision of legal services by HUD Closing Attorneys while 
working from home or from another remote location. Also included in the 
memorandum are suggestions that may be shared with outside counsel to 
facilitate the work being done remotely by OGC attorneys. Therefore, 
Regional Counsel will ensure that the temporary protocols set forth in 
the March 16, 2020 memorandum are adopted and applied consistently 
across the regional and field offices within their purview. When the 
pandemic subsides and OGC resumes normal closing operations 
consistently across the country, HUD will reconsider the temporary 
protocols in this memorandum. OGC attorney protocols for review and 
approval of draft closing documents must rely on electronic 
transmission of closing documents in lieu of hard copies in performing 
their initial reviews. This approach will ensure the continuation of 
reviews even if our external partners are unable to physically transmit 
the volume of paper documents needed at this stage. While providing 
increased flexibility to lenders in submitting closing documents, this 
protocol does

[[Page 80136]]

not authorize any additional substantive modifications to the closing 
process without approval of the appropriate Regional Counsel and the 
Office of Insured Housing in Headquarters. Draft closing submission 
will remain consistent with the approach of Multifamily Housing and OGC 
will accept draft closing packages in fully electronic form.
    Respondents estimation for the Escrow Agreement for Deferred 
Repairs & Debt Service--223(f)--(one closing):
    Estimated Number of Respondents: 330.
    Estimated Number of Responses: 330.
    Frequency of Response: Once per annum.
    Average Hours per Response: .50 hours.
    Total Estimated Burdens: 165.
    Description of the need for the information and proposed use: The 
form Escrow Agreement for Deferred Repairs & Debt Service--223(f) 
(``Debt Service Escrow Agreement''), sets the terms and conditions 
between the Borrower and Lender and provides for the establishment of 
an escrow by the Borrower as security for completion of non-critical 
deferred repairs. Such escrow also serves as security for HUD's 
insurance of the loan. The agreement provides for prior approval of HUD 
for certain actions to be taken by the Borrower or Lender. The 
information collection requirements contained in Debt Service Escrow 
Agreement are to oversee the parties' compliance with all applicable 
legal requirements and therefore ensure protection of the FHA insurance 
fund.
    The global pandemic relating to the COVID-19 Emergency has 
disrupted the U.S. economy with significantly increased unemployment 
and overall economic instability. This instability has carried over to 
real estate markets in general, including multifamily commercial 
markets. During these challenging times, HUD remains open for business 
and will continue as an active participant in sourcing new construction 
and refinance debt through its mortgage insurance programs. At the same 
time, HUD has reevaluated its underwriting requirements, particularly 
for market rate refinance transactions that may now experience 
increased vacancy, rent collection losses and income disruption both in 
the near and long term. Section 207 of the National Housing Act 
provides that no mortgage shall be acceptable for insurance unless the 
Secretary finds that the project is economically sound, and the MAP 
Guide permits specific mitigants to be employed to reduce risk for 
transactions currently in process but yet to receive a Firm Commitment 
to insure. These mitigants include but are not limited to the 
requirement of a Debt Service Reserve (DSR) for Section 223(f) 
transactions to offset anticipated operating losses post endorsement. 
To address risk and/or changed economic circumstances for transactions 
that have been issued a commitment to insure but have yet to endorse, 
HUD includes language in the Firm Commitment affirming that no material 
adverse change (MAC) has occurred between the issuance of the 
commitment and endorsement. Accordingly, HUD has taken the position 
that the impact of the COVID-19 Emergency has resulted in a material 
change in most, if not all, real estate markets and therefore, HUD will 
require mitigants to offset this additional risk. Accordingly, this 
form provides clarification and instructions to HUD staff describing 
additional mitigants that may be included in the Firm Commitment for 
Section 223(f) loans that are in processing, as well as for those 
projects for which a Firm Commitment has been issued.
    Revisions to the OMB approved Form HUD-92476.1M is the temporary 
Escrow Agreement for Deferred Repairs & Debt Service--223(f). This form 
does not permanently replace the HUD-92476.1M. The revised escrow, 
while based on the HUD-92476.1M, is a separate document for temporary 
use during the COVID-19 emergency pursuant to Mortgagee Letter 2020-11 
issued April 10, 2020. The temporary Escrow Agreement for Deferred 
Repairs & Debt Service--223(f) Form will remain in effect until such 
time as HUD determines that the real estate markets that have been 
negatively affected by the COVID-19 Emergency have stabilized and 
additional mitigants for Section 223(f) transactions are no longer 
required.
    This new collection can be used to address future changes to 
multifamily programs or processes that may arise from impacts due to 
the COVID19 pandemic.

B. Solicitation of Public Comment

    This notice is soliciting comments from members of the public and 
affected parties concerning the collection of information described in 
Section A on the following:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    (2) The accuracy of the agency's estimate of the burden of the 
proposed collection of information;
    (3) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (4) Ways to minimize the burden of the collection of information on 
those who are to respond; including through the use of appropriate 
automated collection techniques or other forms of information 
technology, e.g., permitting electronic submission of responses.
    (5) Ways to minimize the burden of the collection of information on 
those who are to respond, including the use of automated collection 
techniques or other forms of information technology.
    HUD encourages interested parties to submit comment in response to 
these questions.

C. Authority

    Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 
Chapter 35.

Colette Pollard,
Departmental Reports Management Officer, Office of the Chief 
Information Officer.
[FR Doc. 2020-27272 Filed 12-10-20; 8:45 am]
BILLING CODE 4210-67-P