[Federal Register Volume 88, Number 86 (Thursday, May 4, 2023)]
[Notices]
[Page 28598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09479]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6389-N-01]


Section 184 Indian Housing Loan Guarantee Program; Reduction to 
the Upfront and Annual Loan Guarantee Fees

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Notice.

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SUMMARY: The Section 184 Indian Housing Loan Guarantee program 
(``Section 184 program'') is a home mortgage program specifically 
designed for American Indian and Alaska Native families, Alaska 
villages, Tribes, or Tribally Designated Housing Entities. Congress 
established this program in 1992 to facilitate homeownership and 
increase access to capital in Native American communities. Based on the 
Section 184 program's strong performance and low default rate, HUD has 
determined that the fees charged to the borrower can be reduced without 
risk to the overall performance of the program. HUD is hereby 
exercising its authority to decrease the upfront loan guarantee fee 
from 1.50 to 1.00 percent and the annual loan guarantee fee from 0.25 
to 0.00 percent for all new or updated Section 184 Firm Commitments as 
of the effective date of this Notice, including refinances.

DATES: Applicable Date: July 1, 2023.

FOR FURTHER INFORMATION CONTACT: Heidi J. Frechette, Deputy Assistant 
Secretary for Native American Programs, Office of Public and Indian 
Housing, Department of Housing and Urban Development, 451 7th Street 
SW, Room 4108, Washington, DC 20410; telephone number 202-401-7914 
(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

    Section 184 of the Housing and Community Development Act of 1992 
(Pub. L. 102-550, approved October 28, 1992), as amended, established 
the Section 184 program to provide access to sources of private 
mortgage financing to Indian families, Indian housing authorities, and 
Indian tribes. Congress established this program in 1992 to facilitate 
homeownership and increase access to capital in Native American 
Communities. The Section 184 program addresses obstacles to mortgage 
financing on trust land and in other Indian and Alaska Native areas by 
giving HUD the authority to guarantee loans to eligible persons and 
entities to construct, acquire, refinance, or rehabilitate one- to 
four-family dwellings in these areas.
    The Section 184 program is funded by a combination of annual 
appropriations and upfront and annual fees collected from the borrower. 
Program costs include amounts for claims, contracts, and other expenses 
related to foreclosure. To ensure the program has enough funding, 
pursuant to 12 U.S.C. 1715z-13a(d) and 24 CFR 1005.109, HUD has the 
authority to establish an upfront loan guarantee fee in an amount not 
exceeding 3.00 percent of the principal obligation of the loan and an 
annual loan guarantee fee in an amount not exceeding 1.00 percent of 
the remaining guaranteed balance.
    On March 5, 2014, HUD issued a Notice increasing the upfront loan 
guarantee fee from 1.00 to 1.50 percent. (79 FR 12520). The new loan 
guarantee fee became effective on April 4, 2014.
    On October 7, 2014, HUD issued a Notice exercising its statutory 
authority to implement an annual loan guarantee fee to the borrower in 
the amount of 0.15 percent. (79 FR 60492). The new annual loan 
guarantee fee became effective on November 15, 2014.
    On November 1, 2016, HUD issued a second Notice increasing the 
annual loan guarantee fee from 0.15 to 0.25 percent. (81 FR 75836). The 
new annual loan guarantee fee became effective on December 1, 2016.
    Since 2016, the Section 184 program has consistently experienced a 
very low default rate. Lenders are doing a better job of underwriting 
and servicing the loans, and Tribes continue to proactively provide 
housing counseling and support in an effort to keep Native American 
families in their homes. These factors have strengthened the financial 
performance of the Section 184 program. As a result, the program can 
support a reduction of loan guarantee fees to Native American borrowers 
without increasing financial risk to the Fund.
    The reduction in fees will make Section 184 loans more affordable 
to Native American families and help remove barriers to private 
financial capital. Reducing the upfront and annual loan guarantee fees 
will have a positive financial impact on a typical borrower. Under the 
revised fee structure, the average family could save almost $5,700 over 
the course of the loan, which is a meaningful savings for an average 
Native American family.

II. Reduction of the Upfront and Annual Loan Guarantee Fee

    This Notice reduces the Section 184 program upfront loan guarantee 
fee from 1.50 to 1.00 percent and the annual loan guarantee fee from 
0.25 to 0.00 percent. This reduction will apply to all Section 184 
program applicants receiving a new or updated Section 184 Firm 
Commitment as of the applicable date of this Notice, including 
refinances. This reduction will not apply to loans currently guaranteed 
by this program.

III. Environmental Impact

    This Notice involves the establishment of a rate or cost 
determination that does not constitute a development decision affecting 
the physical condition of specific project areas or building sites. 
Accordingly, under 24 CFR 50.19(c)(6), this Notice is categorically 
excluded from environmental review under the National Environmental 
Policy Act of 1969 (U.S.C. 4321).

Dominique Blom,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 2023-09479 Filed 5-3-23; 8:45 am]
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