[Federal Register Volume 89, Number 108 (Tuesday, June 4, 2024)]
[Rules and Regulations]
[Pages 47849-47850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12199]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 236

[FR-6439-F-01]


Removal of Obsolete Regulations for Section 236 of the National 
Housing Act

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule removes HUD's obsolete regulations under the Rental 
and Cooperative Housing for Lower Income Families Program under section 
236 of the National Housing Act (``Section 236''), as amended. HUD has 
determined that the provisions regulating Section 236 insured projects 
and Section 236 Rental Assistance Payment (``RAP'') projects are 
obsolete and unnecessary because there are no remaining properties or 
projects subject to these regulations, and no new agreements are being 
established under these programs.

DATES: Effective July 5, 2024.

FOR FURTHER INFORMATION CONTACT: Jennifer Lavorel, Office of Housing, 
Department of Housing and Urban Development, 451 7th St. SW, Room 6180, 
Washington, DC 20410, telephone number 202-708-1112 (this is not a 
toll-free number) or via email to [email protected]. 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

    Created by Congress in 1968, the Section 236 (12 U.S.C. 1715z-1) 
program authorized HUD to subsidize the interest rate on loans on 
rental housing projects designed for occupancy by lower-income families 
for the purpose of reducing rental costs for such families. Some 
Section 236 loans were insured by the Federal Housing Administration 
(FHA) (Section 236 insured projects) and others were/are not insured by 
FHA but are financed under a State or local program (Section 236 non-
insured projects). Section 236 insured and non-insured projects were 
eligible for refinancing, and HUD is authorized to continue interest 
reduction payments (IRP) on the successor loan as long as certain 
conditions, as specified in Housing Notice 2013-25, are met (Section 
236 IRP projects). Section 236(n) prohibits the insurance of mortgages 
under Section 236 after November 30, 1983, except to permit the 
refinance of a mortgage insured under Section 236, or to finance 
pursuant to section 236(j)(3), the purchase, by a cooperative or 
nonprofit corporation or association, of a project assisted under 
Section 236. HUD is electing not to utilize the authority provided by 
section 236(j)(3).
    Tenants in some Section 236 projects also received Rental 
Assistance Payments (Section 236 RAP projects). Over the last 50 years, 
these loans have undergone several preservation transactions to 
continue serving low- and moderate-income families, such as prepayment 
of certain Section 236 loans subject to HUD prepayment approval, 
conversions to Section 8 project based assistance through the Rental 
Assistance Demonstration (RAD), refinancing using a Federal Housing 
Administration (FHA) insured mortgage program, and/or securing 
additional capital financing such as a Low Income Housing Tax Credit 
(LIHTC) award. Currently, there are no remaining Section 236 insured 
projects, and all Section 236 RAP contracts have either terminated or 
converted to Section 8 through RAD, with the RAP program considered 
inactive. Moreover, HUD has additional mortgage insurance and rental 
assistance programs available to preserve low-to-moderate income 
housing and assist lower income tenants.

II. This Final Rule

    This final rule removes Section 236 regulations at 24 CFR part 236, 
subparts A, B, C, and D, because they are obsolete. Regulations in 24 
CFR part 236, subparts A, B, and C, apply only to Section 236 insured 
projects. HUD's portfolio has no remaining Section 236 insured 
projects. Regulations in 24 CFR part 236, subpart D, apply only to 
Section 236 Rental Assistance Payments projects. HUD's portfolio has no 
remaining Section 236 RAP projects. Therefore, these subparts are 
obsolete and can be removed.

III. Justification for Final Rulemaking

    In accordance with 24 CFR part 10, it is the practice of the 
Department to offer interested parties the opportunity to comment on 
proposed regulations. Part 10 provides for exceptions to the general 
rule if an agency, for good cause, finds that ``notice and public 
procedure thereon are impracticable, unnecessary, or contrary to the 
public interest.'' (24 CFR 10.1.) The removal of these regulations from 
the Code of Federal Regulations does not establish or affect 
substantive policy. This final rule removes obsolete and unnecessary 
regulatory provisions for programs that are no longer being funded or 
for operation of programs that has been transferred. Therefore, HUD 
finds that public notice and comment are unnecessary and contrary to 
the public interest.

[[Page 47850]]

IV. Findings and Certifications

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because HUD has determined that good cause exists to issue this rule 
without prior public comment, this rule is not subject to the 
requirement to publish an initial or final regulatory flexibility 
analysis under the RFA as part of such action.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This rule does not have federalism 
implications and does not impose substantial direct compliance costs on 
State and local governments or preempt State law within the meaning of 
the Executive order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for Federal agencies to 
assess the effects of their regulatory actions on State, local, and 
Tribal governments, and on the private sector. This rule does not 
impose any Federal mandates on any State, local, or Tribal governments, 
or on the private sector, within the meaning of UMRA.

Environmental Impact

    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule 
is categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects in 24 CFR Part 236

    Grant programs-housing and community development, Low and moderate 
income housing, Mortgage insurance, Rent subsidies, Reporting and 
recordkeeping requirements.

    For the reasons discussed in the preamble, HUD amends 24 CFR part 
236 as follows:

PART 236--MORTGAGE INSURANCE AND INTEREST REDUCTION PAYMENT FOR 
RENTAL PROJECTS

0
1. The authority citation for part 236 continues to read as follows:

    Authority: 12 U.S.C. 1715b, 1715z-1, and 1735d; 42 U.S.C. 
3535(d).

Subparts A through D--[Removed and Reserved]

0
2. Remove and reserve subparts A through D, consisting of Sec. Sec.  
236.1 through 236.765.

Julia Gordon,
Assistant Secretary for Housing--Federal Housing Commission.
[FR Doc. 2024-12199 Filed 6-3-24; 8:45 am]
BILLING CODE 4210-67-P