[Federal Register Volume 89, Number 114 (Wednesday, June 12, 2024)]
[Rules and Regulations]
[Pages 49802-49808]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12777]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 214, 1000, and 1003

[Docket No. FR-6322-F-02]
RIN 2502-AJ64


Certification of Tribal Housing Counselors

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

ACTION: Final rule.

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SUMMARY: HUD's Housing Counseling Program provides counseling to 
individuals seeking information about financing, maintaining, renting, 
or owning a home. Established by the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, entities and individual counselors that 
participate in the Housing Counseling Program are required to be 
certified by HUD as competent to provide counseling services. In 2016, 
HUD implemented such housing counselor certification requirements for 
most HUD programs but agreed to conduct consultation with Tribes before 
implementing them for Tribes. On January 26, 2023, HUD published a 
proposed rule that provides an alternative regulatory standard for the 
counselor certification that accounts for the unique status of Tribal 
land and housing programs in Indian country and recognizes the 
importance of Tribal expertise. After consulting with Tribes and 
considering public comments received in response to the proposed rule, 
this final rule adopts the proposed rule with minor changes.

DATES: Effective July 12, 2024.

FOR FURTHER INFORMATION CONTACT: David Valdez, Office of Housing 
Counseling, Office of Housing, Department of Housing and Urban 
Development, 1331 Lamar St. Suite 550, Houston, TX 77002; telephone 
number 713-718-3178 (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

    Established by the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Pub. L. 111-203, 124 Stat. 1376, approved July 21, 
2010) (Dodd-Frank), HUD's Office of Housing Counseling (OHC) provides 
support to a nation-wide network of HUD-certified counseling agencies 
and State Housing Finance Agencies that provide counseling to 
individuals seeking information about financing, maintaining, renting, 
or owning a home. In addition to establishing the OHC, Dodd-Frank 
directed HUD to issue regulations necessary to carry out the testing 
and certification of housing counselors in HUD programs. On December 
14, 2016, HUD published a final rule implementing these requirements 
for most HUD programs (81 FR 90632). In recognition of HUD's 
government-to-government relationship with Tribal governments, and 
HUD's Tribal Consultation policy, HUD conducted Tribal consultation 
before implementing requirements for Tribes, Tribally designated 
housing entities (TDHEs), and other Tribal entities. On December 18, 
2020, HUD published a Dear Tribal Leader Letter to inform Tribal 
leaders about the Housing Counselor Certification Final Rule and that 
the Department would be soliciting their feedback through Tribal 
consultation.\1\
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    \1\ Available at: https://www.hud.gov/sites/dfiles/PIH/documents/DTL12.17.20_Housing_Counseling.pdf.
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    Subsequently, HUD hosted two virtual Tribal consultation sessions 
and six listening sessions to gather input on the potential 
implications of the Tribal Housing Certification requirements. HUD then 
published a proposed rule implementing testing and certification 
requirements for housing counselors for employees of Tribes, TDHEs, and 
other Tribal entities conducting housing counseling required or 
provided in connection with the Indian Housing Block Grant (IHBG) and 
Indian Community Development Block Grant (ICDBG) programs on January 
26, 2023 (88 FR 4923) (the proposed rule).
    The proposed rule proposed codifying a housing counselor 
certification requirement by adding a new subpart F to 24 CFR part 214 
that would apply only for the IHBG and ICDBG programs. To provide 
counseling for those programs, an individual could become a ``HUD-
certified housing counselor'' by working for a participating agency and 
meeting all requirements of part 214, including passing a housing 
counselor certification examination under Sec.  214.103(n) or by 
working for an Indian Tribe, TDHE, or other Tribal entity, and passing 
a housing counselor certification exam under the new Sec.  214.600(c). 
This new Tribal certification exam would consider the unique status of 
Tribal trust land, mortgaging Tribal trust land, and account for the 
distinct framework of nondiscrimination requirements as they apply to 
Tribes and Tribal recipients of IHBG and ICDBG funds at 24 CFR 1000.12 
and 1003.601.

II. This Final Rule

    After considering comments received from the public through the 
Federal Register as well as through consultation with Tribes during 
three consultation sessions and six listening sessions, HUD promulgates 
this final rule. The final rule adopts the proposed rule with three 
minor changes. First, instead of revising the definition of HUD 
certified housing counselor in 24 CFR 214.3, HUD is adding a definition 
for HUD-certified Tribal housing counselor. This change is

[[Page 49803]]

being made to clearly distinguish between the two types of counselors 
and does not alter the substantive requirements for certification 
approval. Second, HUD is clarifying in 24 CFR 214.600(d) that an Indian 
Tribe, TDHE, or other Tribal entity must be a participating agency in 
order for an individual working for one, who also meets the 
requirements under 24 CFR 214.103(n), to provide housing counseling in 
connection with programs other than IHBG and ICDBG. Third, HUD is 
adding paragraph (e) to 24 CFR 214.600 to establish a 4-year transition 
period to allow Tribal grantees sufficient time to ensure that housing 
counselors can be certified while also establishing the alternative 
Tribal regulatory scheme previously outlined in the proposed rule. HUD 
appreciates the public comments received in response to its January 26, 
2023, proposed rule, thanks all Tribal stakeholders for their 
invaluable feedback during the rulemaking process, and looks forward to 
engaging more as HUD works to develop a Tribal certification exam.

III. Public Comments

    HUD received 16 distinct comments from Tribes, individuals, housing 
counseling providers, Indian Housing Authorities, and advocacy groups 
through the Federal Register as well as additional comments through the 
third Tribal consultation. This section includes a summary of the 
significant issues raised by the public comments that HUD received in 
response to its proposed rule and through the third Tribal 
Consultation.

Support for the Proposed Rule

    Several commenters provided general support for the proposed rule 
and noted that it respected Tribal sovereignty and accounted for the 
unique nature of Tribes. One commenter noted that housing is a 
significant need in Tribal communities and housing counseling is often 
unavailable to Tribal members. Some commenters supported HUD for 
working with Tribal officials and including their input. One commenter 
noted that they appreciated HUD's approach as Tribal consultation is a 
prerequisite for implementing any rules that affect Tribal programs or 
communities.
    Several commenters supported specific aspects of the proposed rule. 
One commenter noted that the proposed rule simplified the eligibility 
and certification process. Another commenter supported HUD's proposal 
to allow TDHEs to participate in HUD's Housing Counseling Program. 
Commenters stated the proposed rule would make it more feasible for 
TDHEs to comply with the requirements than those that apply more 
broadly in HUD's counseling regulations.
    Several commenters in the third Tribal consultation suggested that 
HUD convene a Tribal advisory committee to oversee the implementation 
of the rule.
    HUD Response: HUD appreciates the commenters' support and feedback. 
This final rule provides an alternative regulatory standard that 
complies with the statutory requirements of Dodd-Frank and recognizes 
the unique status of Tribal land and housing programs in Indian 
country.
    HUD agrees with the commenters that recommended working with a 
Tribal advisory committee to advise HUD on the implementation of this 
final rule. In this case, HUD intends to work with two existing federal 
advisory committees, HUD's Tribal Intergovernmental Advisory Committee 
and the Housing Counseling Federal Advisory Committee (HCFAC) in 
soliciting advice regarding implementing this rule.

Opposition to the Proposed Rule

    Several commenters stated that the proposed rule is not deferential 
to the Tribal right of self-determination and does not recognize Tribal 
sovereignty and the unique challenges Tribes face. Commenters stated 
that the proposed rule should allow Tribes to account for their 
differing cultures, economic conditions, customs, resources, and 
geography. Some commenters also stated that they did not feel the 
proposed rule was responsive enough to the feedback provided during 
listening sessions and encouraged further consultation between HUD and 
Tribal communities to ensure accessible, culturally-informed, and 
relevant housing counseling services. Commenters recommended that HUD 
engage more with Tribes in designing a process and a program that 
reimagines HUD's current Housing Counseling Program to better recognize 
Tribal expertise and acknowledge Tribal self-determination. One 
commenter stated that the Native American Housing Assistance and Self-
Determination Act of 1996, as amended (NAHASDA) (25 U.S.C. 4101), 
already allows IHBG grant funds to be used to pay for housing 
counseling services and does not require an examination process. 
Another commenter noted that neither NAHASDA nor the ICDBG program 
mandate housing counseling.
    Commenters stated that the proposed rule may make it difficult for 
Tribal entities to run housing programs and ultimately decrease access 
to housing counseling. A commenter said Tribal housing counselors would 
have to take and pass a rigorous examination with content that did not 
include questions related to Tribal housing issues. Another commenter 
stated that the proposed rule would undermine the decades of work put 
in to improve Tribal counseling organizations and essentially nullify 
the capacity that has been built. Some commenters stated that the 
proposed rule would have the effect of diminishing the services 
provided to Tribal members, as it could limit the ability of Tribes to 
use the IHBG program, or other programs that have a counseling 
requirement. Commenters noted the proposed rule could be especially 
burdensome for small and rural Tribal entities and reduce access to 
housing counseling in these communities. One commenter noted the costs 
would be passed on to homebuyers. Another commenter noted the proposed 
rule did not take into consideration ways to provide more housing 
counseling services and only focused on additional regulatory 
compliance.
    One commenter recommended an abbreviated version of the Housing 
Counseling Plan be embedded in the NAHADSA Annual Indian Housing Plan. 
Another commenter suggested HUD allow existing staff of Tribes, TDHEs 
and other Tribal entities to constitute a housing counseling 
organization in Sec.  214.600. One commenter noted that Tribes already 
have housing counseling programs that better fit their needs.
    HUD Response: HUD recognizes the unique challenges in Indian 
Country and understands that commenters have concerns about how this 
new requirement will be implemented. HUD is required to implement Dodd-
Frank and the statutory requirement that counseling provided under, or 
in connection with, IHBG and ICDBG be carried out by certified 
counselors. However, in doing so, HUD is committed to implementing the 
counselor certification for IHBG and ICDBG in a manner that respects 
Tribal sovereignty and the right of self-determination and which 
addresses the substantial feedback provided by Tribes.
    HUD, through a contractor, will develop the Tribal housing 
counselor certification training, online study guide, and examination 
and to host the website. HUD will ensure the exam content is 
appropriately tailored while considering and balancing compliance with 
statutory requirements, the unique status of trust land, mortgaging 
tribal trust land, and respect for Tribal sovereignty and self-
determination.

[[Page 49804]]

When developing the examination, HUD may seek to engage with Tribes, 
TDHEs and other Tribal entities to gather their input in designing an 
exam that recognizes Tribal expertise and acknowledges Tribal self-
determination.
    Through this rule, HUD addressed the concern that the rule could be 
especially burdensome for small and rural Tribal entities. 
Specifically, HUD is establishing an alternative regulatory standard 
for Tribes and will allow employees of Indian Tribes, TDHEs, and other 
Tribal entities to become certified housing counselors if they pass the 
certification examination under Sec.  214.600(c) without the 
requirement that they also work for an approved housing counseling 
agency. To further minimize burden for all Tribes, including small and 
rural Tribal entities, HUD will also provide access to existing free 
study material and free study material that accounts for any tailored 
exam components that it develops in collaboration with Tribes, TDHEs, 
and other Tribal entities.
    Finally, HUD is establishing a 4-year transition period to ensure 
that Tribes have enough lead time to ensure staff are properly prepared 
to complete and pass the certification exam.
    Through all these actions, it is HUD's hope that the result will be 
the appropriate implementation of Dodd-Frank in a manner that considers 
the unique status of Tribes and ensures that Tribes are able to get all 
housing counselors certified in a timely manner.

Certification Exam

    Several commenters proposed ways to make the proposed rule more 
deferential to Tribes' unique needs. Commenters noted that Tribes, 
TDHEs and Community Development Funding Institutions (CDFI) have 
already created housing counseling programs that fit the unique needs 
of Tribes. Commenters suggested that HUD should recognize 
certifications from Native American housing counselor certification 
curricula that many Tribal housing entities already use. Some 
commenters suggested that HUD incorporate existing curricula or adopt 
certifications from the National American Indian Housing Council 
(NAIHC), NeighborWorks, Oweesta, etc. Several commenters suggested in 
the third Tribal consultation that HUD use existing curricula and 
examinations, including Pathways Home: A Native Homeownership Guide, to 
satisfy the statutory requirement for a certification examination that 
addresses the six core competency areas.
    Several commenters suggested HUD establish an advisory committee 
comprised of representatives from Tribal entities and stakeholders who 
could advise HUD on how to devise culturally relevant criteria and exam 
content for Tribal-specific HUD counselor certification requirements. 
Some commenters expressed concern about applying the current housing 
counselor standards to Tribal entities. Some commenters requested HUD 
allow Tribes to determine the content for inclusion in the relevant 
exam curriculum. One commenter noted that if HUD created a 
certification process rooted in Tribal expertise and Tribal self-
determination, HUD could expand this certification process for all HUD-
funded Tribal programs.
    Some commenters requested HUD change certification requirements 
because staff in Tribal governments are often divided between ownership 
and rental programs and may have difficulty passing the exam. 
Commenters also asked HUD to adjust the certification requirements to 
align more closely with the rental counseling needs of TDHEs, Tribes, 
and Tribal CDFIs. One commenter requested clarification about what the 
``fair housing laws and rules'' competency requirement at Sec.  
214.600(c)(1)(iv) will include in the certification exam based on the 
limited application of certain Fair Housing requirements for Tribes and 
Tribal grantees. Another commenter asked HUD what measures HUD is 
taking to ensure certification covers the unique status of all Tribal 
communities. Commenters also asked whether the certification standards 
would be the same for TDHEs as other HUD-approved housing counseling 
agencies.
    One commenter proposed that the cost of certification should be 
less than $100 and should be clearly disclosed by HUD.
    One commenter in the third Tribal consultation expressed confusion 
over the need for the Sec.  214.103(n) examination or the forthcoming 
certification examination under Sec.  214.600(c) or both exams to be 
certified to counsel within IHBG or ICDBG programs.
    HUD Response: While commenters suggested HUD establish an advisory 
committee comprised of representatives from Tribal entities and 
stakeholders to advise HUD regarding designing culturally relevant 
criteria and exam content for Tribal-specific HUD counselor 
certification, HUD has decided against establishing such an advisory 
committee. In reviewing this comment, HUD recognized that requirements 
of the Federal Advisory Committee Act (5 U.S.C. Chapter 10) would limit 
its ability to fully engage Tribes in the development of the 
certification examination. Additionally, it has typically not been the 
Department's procedure to establish an advisory committee for the 
purpose suggested by the commenter and the Department has other means 
of soliciting public input. As discussed in this preamble, HUD is fully 
committed to soliciting the advice and recommendation of Tribes in the 
development of the examination.
    HUD recognizes the certification exam codified at Sec.  214.103(n) 
does not assess knowledge of the unique property and administrative 
requirements that apply to trust land and other restricted Tribal 
lands. For example, the housing counselor certification exam codified 
at Sec.  214.103(n) does not reflect the unique way that civil rights 
requirements apply to Tribes and other Tribal grantees under HUD's IHBG 
and ICDBG programs under 24 CFR 1000.12 and 1003.601. While there are 
exemptions from certain fair housing and civil rights laws and 
requirements for tribes and TDHEs when administering specific HUD 
funds, individuals and families do have certain civil rights 
protections and continue to be able to assert fair housing and 
nondiscrimination claims, including against other parties that may be 
involved such as lenders, or private landlords. Identifying what civil 
rights protections can be asserted and against whom they can asserted 
is a nuanced and fact-based analysis. Given this, HUD plans to develop 
a Tribal certification exam that is appropriately tailored and that 
will ensure that housing counselors can appropriately counsel families 
about their rights. HUD appreciates the comment recommending that it 
incorporate existing curricula or adopt certifications from the NAIHC, 
NeighborWorks, Oweesta, or Pathways Home to satisfy the statutory 
requirement for a certification examination that addresses the six core 
competency areas. While HUD cannot accept these alternate curricula to 
fulfill the certification requirements of Dodd-Frank, HUD has reviewed 
this material and will use it to inform the development of the HUD 
examination. The statute does not allow for these alternative curricula 
to substitute for an exam created by HUD and its contractor.
    To clarify the understanding of the commenter regarding whether a 
housing counselor would need to be certified under Sec.  214.103(n), 
Sec.  214.600(c), or both exams to be certified to counsel within IHBG 
or ICDBG programs, housing counseling provided under or in connection 
with IHBG or ICDBG programs must be conducted by a HUD certified 
counselor who has passed

[[Page 49805]]

either the Sec.  214.103(n) examination or the certification 
examination under Sec.  214.600(c). The counselor can choose to take 
one or both exams to meet the certification examination requirement.

Training Material

    Some commenters asked HUD to consider implementing Dodd-Frank-
compliant, culturally relevant training based on existing counseling 
programs that Tribal housing programs have used and that would build 
skills and competency in staff. One commenter pointed out that Tribes, 
TDHEs, and Tribal CDFIs have already spent resources on training. 
Another commenter asked for organizations that manage Tribally focused 
counseling training to be updated on examination and curricula 
requirements. One commenter asked HUD to include information about 
Federal Indian Law in any trainings.
    Commenters also requested that HUD increase access to training 
resources, including making trainings available to TDHEs immediately, 
stating that training resources to prepare for certification are only 
available to HUD-certified counselors.
    HUD Response: HUD agrees with the commenters and will provide 
access to existing free study material and free study material that 
accounts for any tailored exam components that it develops in 
collaboration with Tribes, TDHEs, and other Tribal entities, to 
implement this final rule. HUD may solicit Tribal input by providing 
drafts of study materials developed for the exam prior to public 
release to consider feedback. The rule also provides a four-year 
transition period after the effective date of this final rule or 30 
days after HUD makes the Tribal certification examination available, 
whichever is later for individual counselors to be certified. HUD will 
publish a document in the Federal Register to announce the start of 
testing and the certification requirement. HUD will use this time to 
make these resources available in addition to taking other steps to 
ensure that Tribes can meet the certification requirements once they go 
into effect.

Funding and Resources

    Several commenters asked whether funding would be provided for 
hiring Tribal housing counselors, especially for small Tribes and 
TDHEs. One commenter asked whether TDHEs would be eligible for HUD 
funding that is currently earmarked for HUD-approved housing counseling 
agencies and whether this would lead to an increase in overall program 
funding. Commenters requested that HUD make funding available to allow 
Tribes to hire the necessary staff, or to give money to Tribes, TDHEs, 
Tribal entities, or Tribal CDFIs for housing counseling activities, 
such as the certification examination. One commenter asked HUD to 
modify subpart F of the proposed rule to allow grants to support Tribal 
housing counselors certified under subpart F if statutory or regulatory 
barriers to Tribal eligibility are removed.
    Some commenters expressed concerns that HUD's proposed requirements 
would put a strain on Tribal resources. Commenters noted that Tribal 
governments manage a variety of programs, and adding additional 
requirements could add to their administrative burdens. One commenter 
pointed out that Tribes, TDHEs, and Native CDFIs have already spent 
resources on other similar trainings. Another commenter stated that HUD 
had understated the impacts of the proposed rule, both regarding fiscal 
cost and time and capacity constraints.
    Commenters noted the proposed rule could cause hiring and retention 
challenges for Tribal entities. One commenter noted that counselor 
turnover, which is already a challenge in non-Native American 
communities, would be a problem for many organizations. This commenter 
emphasized the unique human capital challenges faced by small, 
geographically dispersed communities. Another commenter noted requiring 
counselors to be certified at the time of hiring could cause 
difficulties in recruiting staff and could limit the Tribal 
populations' eligibility for employment. The commenter noted that they 
currently provide on-the-job training for employees after they are 
onboarded and recommended that the proposed rule allow a grace period 
of six months for new hires pursuing a counselor position.
    Another commenter asked HUD to consider whether the HUD-certified 
counselor had to be employed by a HUD-approved housing counseling 
agency, Tribe, TDHE, or other Tribal entity, or whether a Tribal entity 
could be allowed to contract out counseling activities. Commenters 
noted many Tribes hire consultants or seek virtual counseling services 
from other providers.
    Several commenters in the third Tribal consultation expressed 
concern over a lack of technical assistance available to those that do 
choose to join HUD's Housing Counseling Program.
    HUD Response: HUD does not have appropriated funding or authority 
under Section 106 to provide Indian Tribes with the direct grant 
assistance suggested by commenters. HUD understands, however, that 
funding is currently available to qualified nonprofit 501(c) 
organizations and state and local governmental entities including 
Indian Housing Authorities considered state or local housing agencies 
under State law.
    HUD also recognizes that costs will be incurred by Tribes, TDHEs, 
and Tribal organizations because of the written examination 
requirement. In the past, HUD presented the examination in the most 
cost-efficient way feasible and offered both online and in-person 
examinations at a low cost. In addition, HUD has offered free study 
materials for individuals to use in preparation for the examination.
    HUD disagrees that it understated implementation costs in the 
proposed rule. HUD examined and studied the costs related to the 
development of and preparation for a housing counselor certification 
examination in connection with its 2016 final rule implementing 
certification requirements for most HUD programs. HUD has drawn from 
these insights to implement this final rule in a way that minimizes 
costs and burden.
    To further minimize costs and support implementation of Tribal 
housing certification, HUD will provide dedicated staff and training 
for this new requirement and will host a web page for Tribes, TDHEs, 
and Tribal organizations that includes free study materials, training 
curriculum, and other resources to support the transition to this new 
requirement.

Reporting and Compliance

    Commenters noted concerns that the proposed rule would increase 
reporting and compliance costs for Tribal entities. One commenter 
stated that the proposed rule would require significant additional 
resources and technical assistance to develop the required 
infrastructure for reporting and compliance. Some commenters suggested 
changes to the proposed rule to mitigate this increase in cost. A few 
commenters suggested that there be no penalty for TDHEs that do not 
have certified HUD counselors on staff, but rather a TDHE should be 
able to explain how they provide counseling services by referral or 
partnerships. One commenter suggested removing some of the reporting 
and compliance aspects of the HUD Housing Counseling Program and 
instead embedding reporting and compliance within the established 
NAHASDA Indian Housing Plan and Annual Performance Report. The 
commenter suggested including the Quarterly HUD 9902 form as an 
attachment to that report and

[[Page 49806]]

eliminating the HUD 9910 or consolidating it into monitoring and 
counseling tracking in existing software if additional funding was 
provided to adapt this software.
    HUD Response: HUD agrees with commenters that the submission of HUD 
forms, when applicable, should be consolidated to reduce existing 
reporting burdens. However, the final rule imposes no new reporting 
burdens because Tribes, TDHEs and other Tribal entities conducting 
housing counseling provided under or in connection solely with IHBG 
and/or ICDBG are not subject to subparts A through E of 24 CFR part 
214, including the requirement to counsel at least 30 clients within a 
12-month period. Tribes, TDHEs and other Tribal entities remain subject 
to the reporting requirements under IHBG and ICDBG and are exempt from 
compulsory participation in HUD's Housing Counseling Program unless the 
entities also provide counseling under or in connection with certain 
other HUD programs.

Eligibility and Applicability

    Commenters proposed changes to the proposed rule's applicability in 
Sec.  214.300(a)(8), which contains counseling service requirements for 
rental housing programs. Specifically, the commenters noted that many 
Tribes and TDHEs have separate rental and homebuyer programs, or 
primarily deal with rental housing, so the certification should not 
apply to tenant services staff and rental department staff. Commenters 
noted the proposed rule change applies to IHBG and ICDBG and 
recommended that a counselor who is certified as working for a Tribe, 
TDHE or other Tribal entity should be able to provide counseling to 
people outside of these programs. One commenter requested clarification 
on whether a counselor that works for a Tribal entity will also need to 
work for a HUD-approved housing counseling agency. Another commenter 
asked how a TDHE could become a HUD-approved housing counseling agency 
and whether a TDHE could partner with a national intermediary without 
501(c)(3) status. One commenter in the third Tribal consultation 
encouraged HUD to allow Tribes, TDHEs and other Tribal Entities to be 
deemed HUD-approved upon partnering with a HUD-approved organization.
    HUD Response: For those not participating in HUD's Housing 
Counseling Program, HUD encourages partnerships with other HUD-approved 
housing counseling agencies, Tribes, TDHEs, and other Tribal entities 
(e.g., a HUD-approved Native CDFI) with a certified housing counselor 
on staff to improve community access to housing counseling services. 
HUD encourages partnerships that best meet the needs of Tribal 
communities, as determined by those communities.
    This final rule exempts Tribes, TDHEs, and other Tribal entities 
from compulsory participation in HUD's Housing Counseling Program 
unless the entities also provide counseling under or in connection with 
other HUD programs (programs other than IHBG and ICDBG). If an 
individual working for an Indian tribe, TDHE, or other Tribal entity 
provides housing counseling for HUD programs other than ICDBG and IHBG, 
that individual is required to comply with the existing housing 
counselor certification requirement of 24 CFR 214.103(n) (i.e., pass 
the examination and work for a HUD-approved housing counseling agency).

Timeline for Implementation

    Some commenters expressed concern over how quickly Tribes would 
have to come into compliance with the proposed rule. The commenters 
questioned whether a three-year transition period, as proposed in the 
proposed rule, would be enough time to address planning and training 
needs. One commenter noted that HUD-approved Housing Counseling 
Agencies were given four years to comply with testing requirements and 
Tribal entities should be given at least the same amount of time. One 
commenter stated that a counselor who is already certified should have 
the same time frame to take any additional exams that are created out 
of this proposed rule as someone who currently holds no certification.
    HUD Response: HUD agrees and will provide for an additional 12 
months to comply with Tribal certification requirements, consistent 
with the time afforded to HUD-approved housing counseling agencies and 
counselors complying with the requirements of 24 CFR 214.103(n). The 
Tribal certification examination is not yet available, but HUD will 
issue updates in the Federal Register or other means regarding the 
Tribal certification exam release date as the testing development phase 
progresses and the implementation date nears.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866, 13563, and 14094

    Under E.O. 12866 (Regulatory Planning and Review), a determination 
must be made whether a regulatory action is significant and, therefore, 
subject to review by the Office of Management and Budget (OMB) in 
accordance with the requirements of the order. E.O. 13563 (Improving 
Regulations and Regulatory Review) directs Executive agencies to 
analyze regulations that are ``outmoded, ineffective, insufficient, or 
excessively burdensome, and to modify, streamline, expand, or repeal 
them in accordance with what has been learned.'' E.O. 13563 also 
directs that, where relevant, feasible, and consistent with regulatory 
objectives, and to the extent permitted by law, agencies are to 
identify and consider regulatory approaches that reduce burdens and 
maintain flexibility and freedom of choice for the public. E.O. 14094 
(Modernizing Regulatory Review) amends section 3(f) of E.O. 12866, 
among other things.
    This final rule brings HUD's IHBG and ICDBG Programs into 
compliance with statutory requirements added by Dodd-Frank and required 
by other HUD programs since 2016. This final rule provides a 
streamlined compliance option consistent with the statutory requirement 
and responsive to Tribal consultation. This rule was determined not to 
be a ``significant regulatory action'' as defined in section 3(f) of 
Executive Order 12866 as amended by Executive Order 14094 and is not an 
economically significant regulatory action and therefore was not 
subject to OMB review.

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 would not have 
a significant economic impact on a substantial number of small 
entities.
    HUD has determined that this rule will not have a significant 
economic impact on all entities, including small entities. As discussed 
in the preamble, this final rule revises the Housing Counseling Program 
to require that counselors providing counseling funded under or in 
connection with IHBG or ICDBG be certified. Tribes, TDHEs and other 
Tribal entities conducting housing counseling provided under or in 
connection solely with IHBG and/or ICDBG are not subject to subparts A 
through E of 24 CFR part 214. By not being subject to these subparts, 
these entities avoid the bulk of compliance costs, allowing them to 
allocate the savings toward addressing the unique needs of their 
communities.
    Further, the requirement for individual counselors to be certified

[[Page 49807]]

provides a four-year transition period after the effective date of this 
final rule. This four-year period provides ample notice of the need to 
be skilled in the required areas. HUD will also provide access to 
existing free study material that accounts for any tailored exam 
components that it develops, reducing costs associated with training 
and compliance.
    For these reasons, the undersigned certifies that this rule would 
not have a significant economic impact on a substantial number of small 
entities.

Environmental Impact

    This 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).

Executive Order 13132, Federalism

    E.O. 13132 (entitled ``Federalism'') prohibits an agency from 
publishing any rule that has federalism implications if the rule 
either: (1) imposes substantial direct compliance costs on State and 
local governments and is not required by statute, or (2) preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Order. This rule does not have federalism 
implications and would not impose substantial direct compliance costs 
on State and local governments nor preempts State law within the 
meaning of the Order.

Paperwork Reduction Act

    The information collection requirements contained in this final 
rule have been submitted to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information, unless the collection displays 
a valid control number.

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.

List of Subjects

24 CFR Part 214

    Administrative practice and procedure, Loan program--housing and 
community development, Organization and functions (government 
agencies), Reporting and record-keeping requirements.

24 CFR Part 1000

    Aged, Community development block grants, Grant programs--housing 
and community development, Grant programs--Indians, Indians, 
Individuals with disabilities, Low and moderate income housing, Public 
housing, Reporting and recordkeeping.

24 CFR Part 1003

    Alaska, Community development block grants, Grant programs--housing 
and community development, Indians, Reporting and recordkeeping 
requirements.
    Accordingly, for the reasons stated in the preamble, HUD amends 24 
CFR parts 214, 1000, and 1003 as follows:

PART 214--HOUSING COUNSELING PROGRAM

0
1. The authority citation for part 214 continues to read as follows:

    Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 3535(d).


0
2. In Sec.  214.3, add the definitions for ``HUD-certified tribal 
housing counselor'' and ``Tribally designated housing entity'' in 
alphabetical order to read as follows:


Sec.  214.3  Definitions.

* * * * *
    HUD-certified Tribal housing counselor. A housing counselor who has 
passed the HUD Certification examination as described in subpart F of 
this part, works for an Indian Tribe, Tribally designated housing 
entity (TDHE), or other Tribal entity, and is certified by HUD as 
competent to provide housing counseling services pursuant to subpart F 
of this part.
* * * * *
    Tribally designated housing entity. See definition at 25 U.S.C. 
4103.
* * * * *

0
3. Add subpart F to read as follows:

Subpart F--Certification of Tribal Housing Counselors

Sec.
214.600 Tribal housing counselor certification.
214.601 [Reserved]

Subpart F--Certification of Tribal Housing Counselors


Sec.  214.600  Tribal housing counselor certification.

    (a) This subpart applies only to housing counseling required under 
or provided in connection with the Indian Housing Block Grant (IHBG) 
program or the Indian Community Development Block Grant (ICDBG) 
program. Indian Tribes, tribally designated housing entities (TDHEs), 
and other tribal entities funding housing counseling required under or 
provided in connection with IHBG or ICDBG programs shall not be subject 
to the requirements of this part, except as otherwise provided in this 
subpart.
    (b) Housing counseling required under or provided in connection 
with IHBG or ICDBG programs must be provided by a HUD-certified housing 
counselor or a HUD-certified Tribal housing counselor.
    (c) HUD will certify an individual housing counselor to provide 
housing counseling required under or provided in connection with IHBG 
or ICDBG programs upon verification that the person:
    (1) Passes a standardized written examination to demonstrate 
competency in each of the following areas:
    (i) Financial management;
    (ii) Property maintenance;
    (iii) Responsibilities of homeownership and tenancy;
    (iv) Fair housing laws and requirements;
    (v) Housing affordability; and
    (vi) Avoidance of, and response to, rental or mortgage delinquency 
and avoidance of eviction or mortgage default; and
    (2) Works for an Indian Tribe, TDHE, or other Tribal entity.
    (d) To provide housing counseling required under or provided in 
connection with HUD programs other than the IHBG and ICDBG programs, an 
individual working for an Indian Tribe, TDHE, or other Tribal entity 
must meet the housing counseling certification requirement under Sec.  
214.103(n), including the standardized written examination required 
under Sec.  214.103(n)(2), and the Indian Tribe, TDHE, or other Tribal 
entity must be a participating agency).
    (e) Entities and individuals providing housing counseling under 
this subpart must be certified by the Office of Housing Counseling by 
48 months from the effective date of this rule or 30 days

[[Page 49808]]

after HUD makes the Tribal certification examination available, 
whichever is later. HUD will publish a document in the Federal Register 
to announce the start of the testing and certification requirement.


Sec.  214.601   [Reserved]

PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES

0
4. The authority citation for part 1000 continues to read as follows:

    Authority: 25 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).


0
5. Add Sec.  1000.66 to subpart A to read as follows:


Sec.  1000.66  Housing counseling.

    Housing counseling, as defined in 24 CFR 5.100, that is required 
under or provided in connection with IHBG funds must be carried out in 
accordance with 24 CFR 5.111. Housing counseling conducted in 
connection with the IHBG program may only be conducted by individuals 
who are HUD-certified in accordance with 24 CFR part 214, subpart F.

PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND 
ALASKA NATIVE VILLAGES

0
6. The authority citation for part 1003 continues to read as follows:

    Authority:  42 U.S.C. 3535(d) and 5301 et seq.


0
7. Add Sec.  1003.609 to subpart G to read as follows:


Sec.  1003.609  Housing counseling.

    Housing counseling, as defined in 24 CFR 5.100, that is funded with 
or provided in connection with ICDBG funds must be carried out in 
accordance with 24 CFR 5.111. Housing counseling conducted in 
connection with the ICDBG program may only be conducted by individuals 
who are HUD-certified in accordance with 24 CFR part 214, subpart F.

Julia Gordon,
Federal Housing Commissioner, Office of the Assistant Secretary for 
Housing.
[FR Doc. 2024-12777 Filed 6-11-24; 8:45 am]
BILLING CODE 4210-67-P