[Federal Register Volume 88, Number 30 (Tuesday, February 14, 2023)]
[Notices]
[Pages 9529-9530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03089]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6366-N-01]


Request for Information Regarding Rehabilitation Mortgages

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, Department of Housing and Urban Development, HUD.

ACTION: Request for information.

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SUMMARY: Through this Request for Information (RFI), the Federal 
Housing Administration (FHA) seeks public input regarding barriers to 
the use of the FHA 203(k) Rehabilitation Mortgage Insurance Program 
(203(k) Program) by lenders and consumers. Information provided in 
response to this RFI will allow FHA to identify barriers that limit the 
origination of 203(k) insured mortgages and lender participation in the 
program and consider opportunities to enhance the 203(k) Program to 
support HUD's goal of increasing the available supply of affordable 
housing in underserved communities.

DATES: Comments are requested on or before April 17, 2023. Late-filed 
comments will be considered to the extent practicable.

ADDRESSES: Interested persons are invited to submit comments responsive 
to this RFI. Copies of all comments submitted are available for 
inspection and downloading at www.regulations.gov.
    To receive consideration as public comments, comments must be 
submitted through one of the two methods specified below. All 
submissions must refer to the above docket number and title. Commenters 
are encouraged to identify the number of the specific question or 
questions to which they are responding. Responses should include the 
name(s) of the person(s) or organization(s) filing the comment; 
however, because any responses received by HUD will be publicly 
available, responses should not include any personally identifiable 
information or confidential commercial information.
    1. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
http://www.regulations.gov.
    HUD strongly encourages commenters to submit their feedback and 
recommendations electronically. Electronic submission of comments 
allows the commenter maximum time to prepare and submit a response, 
ensures timely receipt by HUD, and enables HUD to make comments 
immediately available to the public. Comments submitted electronically 
through the http://www.regulations.gov website can be viewed by other 
commenters and interested members of the public. Commenters should 
follow the instructions provided on that site to submit comments 
electronically.
    2. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    Public Inspection of Public Comments. All comments and 
communications properly submitted to HUD will be available for public 
inspection and copying between 8 a.m. and 5 p.m. weekdays at the above 
address. Due to security measures at the HUD Headquarters building, an 
advance appointment to review the public comments must be scheduled by 
calling the Regulations Division at (202) 708-3055 (this is not a toll-
free number). HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as individuals 
with speech or communication disabilities. To learn more about how to 
make an accessible telephone call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Copies of all 
comments submitted are available for inspection and downloading at 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Elissa Saunders, Director, Office of 
Single Family Program Development, Department of Housing and Urban 
Development, 451 7th Street SW, Room 9266, Washington, DC 20410-0500; 
telephone number 202-402-2378 (this is not a toll-free number). HUD 
welcomes and is prepared to receive calls from individuals who are deaf 
or hard of hearing, as well as individuals with speech or communication 
disabilities. To learn more about how to make an accessible telephone 
call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. SUPPLEMENTARY INFORMATION:

I. Background

    The Department of Housing and Urban Development (HUD) is committed 
to the advancement of its mission \1\ objectives to facilitate the 
provision of safe, affordable, and equitable housing for American 
households and communities.\2\ A component of HUD's 2022-2026 Strategic 
Plan \3\ is the integration of ``the customer perspective into 
everything the Department does to make its interactions feel easy, 
effective, positive, and equitable.'' The plan also seeks to ``Increase 
the Supply of Housing'' \4\ ensuring all households have access to 
quality, affordable homes, and use any resources available to 
strengthen the national housing supply and preserve

[[Page 9530]]

existing housing. Removing barriers to HUD programs and enhancing HUD 
programs, such as the FHA 203(k) Program, can help support HUD's goal 
of increasing the available supply of affordable housing in underserved 
communities.
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    \1\ HUD Mission at https://www.hud.gov/about/mission.
    \2\ One of FHA's statutory operational goals for the Mutual 
Mortgage Insurance Fund is to ``to meet the housing needs of the 
borrowers that the single family mortgage insurance program . . . is 
designed to serve.'' 12 U.S.C. 1708(a)(7).
    \3\ FY2022-2026 HUD Strategic Plan at https://www.hud.gov/sites/dfiles/CFO/documents/FY2022-2026HUDStrategicPlan.pdf.
    \4\ Id.
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    The 203(k) Program is used to finance the rehabilitation of an 
existing one-to-four unit structure \5\ that will be used primarily for 
residential purposes. Mortgages insured through the 203(k) Program can 
be used to rehabilitate an eligible structure and refinance outstanding 
indebtedness on the structure and the real property on which it is 
located; purchase and rehabilitate a structure and purchase the real 
Property on which the structure is located; or rehabilitate the 
interior space of an eligible Condominium Unit excluding areas that are 
the responsibility of a Condominium Association.
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    \5\ This type of structure refers to a building that has a roof 
and walls, stands permanently in one place, and contains single or 
multiple housing units that are used for human habitation.
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    The 203(k) Program is an important tool for community and 
neighborhood revitalization and the expansion of homeownership 
opportunities for owner-occupant homebuyers.
    There are two types of 203(k) Rehabilitation Mortgages: Standard 
203(k) Mortgage and the Limited 203(k) Mortgage. The Standard 203(k) 
Mortgage Insurance Program may be used for remodeling and major 
repairs, has a minimum repair cost of $5,000, and requires the use of a 
203(k) Consultant. The Limited 203(k) Mortgage Insurance Program is 
used for minor remodeling and non-structural repairs, has a maximum 
repair cost of $35,000, except for properties located in Qualified 
Opportunity Zones \6\ (QOZs) where the maximum repair cost is $50,000, 
and does not require the use of a 203(k) Consultant.
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    \6\ QOZ only applies to the first 15,000 Mortgages per calendar 
year from 2019 to 2028. See HUD Handbook 4000.1, Section 
II.A.8.(a)(i)(A)(2).
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    A 203(k) Mortgage may also be used in conjunction with any of FHA's 
energy efficient programs including the Energy Efficient Mortgages 
(EEM), Weatherization, and Solar and Wind Technologies programs to 
finance the costs of energy efficient improvements to an existing 
Property at the time of purchase or refinance, or to upgrade such 
energy efficient improvements to exceed the established residential 
building code for New Construction.

II. Purpose of This Request for Information

    The purpose of this RFI is to solicit information regarding 
barriers to the origination of mortgages under the FHA 203(k) Program 
and to obtain feedback on ways FHA could improve its policies and 
programs to expand the preservation, renovation, and expansion of 
housing through its rehabilitation mortgage programs and policies.

III. Specific Information Requested

    HUD welcomes all comments relevant to expanding the 203(k) Program. 
HUD is particularly interested in receiving input from interested 
parties on the questions below.
    1. What information can you provide regarding ways in which the FHA 
203(k) Program does or does not meet the needs of borrowers seeking to 
renovate or rehabilitate their homes?
    2. What policies or processes governing the 203(k) Program could be 
streamlined, modified, or eliminated to enhance your experience with 
the 203(k) Program?
    3. How could FHA increase participation in the 203(k) Program?
    4. The Standard 203(k) Program relies on a 203(k) Consultant to 
determine if a property meets the requirements of the program. What 
changes would you recommend to FHA's 203(k) Consultant requirements to 
enhance the program while ensuring a subject property would, after 
improvements, meet FHA's Minimum Property Requirements (MPR) or Minimum 
Property Standards (MPS)?
    5. What methods would you recommend HUD use to increase 
stakeholders' awareness about FHA's 203(k) Program?
    6. Supporting local authorities' efforts to preserve and expand 
single-family housing is an important goal of HUD's strategic plan. 
Please describe how HUD could better support local authorities' efforts 
to increase the stock of available and affordable single family housing 
using the 203(k) Program, especially in underserved communities. What 
role could the program play in improving the supply of available 
housing in underserved communities?
    7. How can the 203(k) Program or other energy efficiency programs 
(Weatherization, Solar and Wind Technologies, and FHA's EEM) better 
align with existing federal, state, or local energy efficiency 
programs?
    8. What state or local regulations impact the use of FHA's 203(k) 
Program?
    9. The 203(k) Program parameters limit the types of eligible 
properties and improvements. Please describe any rehabilitation needs 
not served or underserved due to the existing program requirements and 
how could the 203(k) Program be enhanced to address those needs.
    10. The 203(k) Program is currently underutilized by nonprofits and 
governmental entities. What type of changes would encourage more 
nonprofits and governmental entities to increase their participation in 
the program?
    11. What are the benefits or drawbacks to re-opening the 203(k) 
Program to other parties that acquire and rehabilitate distressed 
single-family properties in underserved communities?
    12. What technology solutions could improve the availability of, or 
facilitate, the 203(k) Program?
    13. Currently, HUD-approved housing counseling agencies provide 
advice about FHA-insured loans to potential and current homeowners. 
Should housing counseling agencies play a more significant role in 
educating consumers about the FHA 203(k) program?
    14. What are the advantages and disadvantages of the 203(k) Program 
compared to other sources of rehabilitation financing? Are there 
changes to the program you recommend in light of these?
    15. Are there any requirements of the 203(k) program that might 
restrict utilization by any underserved groups of borrowers and what 
changes could HUD make to the program to encourage more utilization by 
these groups?

Julia R. Gordon,
Assistant Secretary for Housing--FHA Commissioner.
[FR Doc. 2023-03089 Filed 2-13-23; 8:45 am]
BILLING CODE 4210-67-P