[The Regulatory Plan and Unified Agenda of Federal Regulations]
[Department of Housing and Urban Development Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)
Statement of Regulatory Priorities
In January of 1993, the incoming Administration found a HUD suffering 
from years of reductions in resources, with no clear sense of direction 
or mission. Secretary Henry Cisneros immediately embarked on a program 
to ``Reinvent HUD'' which would involve every HUD employee and key 
program partners and customers. This effort defined HUD's mission, 
established priorities for the coming year and identified the most 
significant program and management problems in need of resolution.
Among the significant obstacles to effective performance identified by 
HUD staff and customers was the lengthy and cumbersome process required 
to issue regulations. One of the many sources of frustration with HUD 
on the part of the public and Congress was the failure to issue 
regulations on a timely basis to implement programs and statutory 
changes. HUD's regulatory program is a mission-oriented program, with 
most regulations implementing program requirements. Timely issuance of 
regulations is a key factor in effective program implementation.
In July 1993, the Reinventing HUD Task Force issued a report of 
``Employee Recommendations for Internal Management Improvements That 
Can Be Implemented Within a Six-month Timeframe.'' The regulation 
issuance process was one of five major problem areas identified. Those 
recommendations which were found to be within management control were 
implemented by the Deputy Secretary on October 7, 1993. The most 
significant change in the rules process has been the implementation of 
the Top 25 Rules procedure. The highest priority rules under 
development are identified and reviewed with key staff every two weeks 
at a meeting co-chaired by the Deputy Secretary and Chief of Staff. 
This results in a common focus by the responsible policy officials and 
support organizations on the most significant rules.
The Task Force Report also identified external review requirements as 
an additional source of delay of regulations. The issuance of Executive 
Order 12866 on September 30, 1993, has addressed the concern for 
improvement of the external review of regulations by the Office of 
Management and Budget. The streamlining of the reviews to focus on the 
Department's significant regulations has resulted in better turnaround 
and more opportunity for meaningful discussion of significant issues. 
To make the process still more effective, the Top 25 listing is shared 
with the Office of Information and Regulatory Affairs and used as a 
basis for assuring that the critical rules are expedited.
Using this process, the Department has been able to focus in the past 
year on completing action on outstanding legislative mandates and on 
preparing regulations to implement the 1994 Multifamily Property 
Disposition Reform Act. At the same time, the basis has been laid for 
substantial improvement to major programs through legislative change 
and revised regulation. The extensive discussions with State and local 
governments, housing authorities and community development agencies, 
residents, nonprofit organizations, foundations, associations 
representing all of these groups and other program participants as part 
of the reinvention process provided recommendations for change which 
have been invaluable in developing the regulatory and legislative 
program.
Carrying out the intent of Executive Order 12866, public participation 
in the process has been improved by including program partners and the 
ultimate beneficiaries in working groups and by more extensive use of 
public meetings. New formats are also being devised to make regulations 
more comprehensible and workable. Where appropriate, the Department is 
working closely with other Federal agencies to develop rules.
In addition, the Department is making greater use of modern information 
technology both internally and externally to support the rules 
development process and as an integral part of improving program 
delivery. The Department's internal tracking system is being improved 
and a new system, HUDCLIPS, is being implemented which will give the 
public access to Departmental regulations electronically. Information 
technology is being used to support implementation of streamlined 
program requirements for the consolidated Community Planning and 
Development Plan as described below. Innovative techniques are also 
being used to support the rulemaking process such as the recently 
completed electronic conference on the RESPA rule described below.
 The 1994 Regulatory Plan of the Department of Housing and Urban 
Development will support the achievement of the Department's mission of 
helping to create cohesive, economically healthy communities all across 
America, and accomplishment of the five program priorities established 
to fulfill the mission. In the coming year, we will complete or 
initiate regulatory actions which support this mission.
In the plan which follows, we identify the specific regulatory actions 
we anticipate to support each priority. Further details on all of these 
actions are included in the descriptions which follow. In some cases, 
significant legislative initiatives are pending which will become major 
elements in our plans when enacted. In those cases, specific details on 
the regulatory action are not available.
Priority: Reducing Homelessness
Reduce the number of homeless Americans through partnerships with local 
governments and private-sector nonprofit groups that help people gain 
access to housing and the services they need.
Regulatory Action: Implement the ``Stewart B. McKinney Homeless 
Assistance Reorganization Act of 1994''
Currently, HUD provides homeless assistance to communities through 
several programs which have separate applications and program 
requirements, creating an administrative burden for both grantees and 
HUD. The proposed legislation will reorganize six separate homeless 
assistance grant programs into a single program that will be formula-
based, flexible and designed to help States and cities develop and 
implement community-devised continuum of care systems. The specific 
details and timing of the regulations required to support the new 
program will be determined after enactment.
Priority: Turning Around Public Housing
Make public housing a source of pride to communities by encouraging 
resident participation in its management, downsizing large 
developments, restoring deteriorating buildings, offering residents 
opportunities to move to low-poverty areas, giving residents incentives 
to work and lift themselves economically, and ensuring that these 
developments become safe, healthy, and attractive places to live and 
raise children.
To support the achievement of this priority, the Department has 
conducted a comprehensive review of all statutes, regulations and 
related issuances on the public housing program. The review teams 
included housing authority employees and residents, legal services 
representatives and HUD employees. Based on information provided by 
their review, detailed plans have been developed to improve the program 
in five functional areas: organization, management and personnel; 
financial management; facilities management; marketing and lease 
management; and community relations and involvement. In each of the 
areas action plans have been developed which include proposals for 
legislative change and revisions to regulations and directives. As the 
changes emanating from this process are implemented, the regulations 
will be revised to simplify existing language, reduce the number of 
regulations, allow greater flexibility, and make the program more 
effective. Specific examples of revisions to major regulations which 
are in process follow.
In addition to these initiatives, the Department has proposed 
legislation to reform the public housing rent structure and to create 
the Community Partnerships Against Crime (COMPAC) to expand the tools 
available to eliminate crime in public housing. Implementation of these 
initiatives will be priorities after enactment.
Regulatory Action: Indian Housing Deregulation
This rule proposes amendments to the Indian Housing Consolidated 
Program regulations to simplify program processes, reduce the number of 
regulatory requirements, and to provide more flexibility to local 
Tribal and Indian housing authority (IHA) officials in the 
administration of the Indian housing program. The rule will provide 
greater discretion and responsibility to IHAs in carrying out their 
housing programs, thereby returning them to local control.
The rule was developed with input from program participants beginning 
in September 1993. In March 1994, a session to discuss the proposed 
changes was held in Washington, DC, with the National American Indian 
Housing Council, eight regional IHA associations, and Tribal leaders, 
as well as a number of representatives from other IHAs. Additional 
verbal comments were received from the Native American housing 
community at that time and the six Office of Native American Programs 
offices continued to involve affected parties in the process by 
conducting sessions with IHAs and Tribes on the proposed changes.
Regulatory Action: Revision of the Public Housing Management Assessment 
Program
The Public Housing Management Assessment Program is the major tool for 
assessing the performance of public housing authorities. However, the 
current system includes some process- oriented, staff-intensive 
reporting requirements that are thought not to be necessarily accurate 
or objective measures of results. The proposed revisions will eliminate 
unnecessary paperwork and provide better measures of performance and 
program results to promote better management of public housing 
developments. The rule incorporates recommendations made as a result of 
the review of program regulations.
Regulatory Action: Public Housing Development Program Revision
The current public housing development program regulations are outdated 
and contain unnecessary restrictions on the flexibility of public 
housing authorities (PHAs). The regulations will be revised to provide 
more flexibility for all participants with even greater flexibility to 
the best performers. ``High performer'' PHAs will have maximum latitude 
to develop public housing within very broad parameters, and with 
minimal HUD oversight (with the exception of those elements that the 
Department, by statute, must perform). Remaining PHAs will be given 
broadened responsibility commensurate with their abilities and areas of 
expertise. HUD will retain the option of reviewing any PHA action, thus 
minimizing risk to the Department.
Streamlining the program will help to reduce a substantial 
preconstruction pipeline and expedite the provision of replacement 
housing for developments that should be fully or partially replaced. 
The proposed regulation will reflect the recommendations resulting from 
the review of the public housing program.
Priority: Expanding Housing Opportunities
Expand Housing opportunities for low- and moderate-income people 
through partnerships with state and local governments, private 
developers, lending institutions, and nonprofit agencies, and 
reestablish the Federal Housing Administration as an active facilitator 
of homeownership for low- and moderate-income families.
In May 1994, Secretary Cisneros called for a study on the future of 
FHA. The study will re-examine how FHA can be reorganized to eliminate 
bureaucratic barriers and to transform it into a more entrepreneurial, 
mission-driven institution.
Eight public forums are being held throughout the country this year by 
Assistant Secretary for Housing-FHA Commissioner Nicolas Retsinas to 
discuss various aspects of the FHA program and how it could be 
improved. As this effort continues, the results will be incorporated 
into plans for revisions of the regulations for the mortgage insurance 
programs.
The specific actions identified below will support the goal of making 
housing opportunities available at lower cost.
Regulatory Action: Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992--Implementing Regulations
This rule will include housing goals for Fannie Mae and Freddie Mac 
(the Government-Sponsored Enterprises, the ``GSEs'') for 1995 and 
beyond, fair-lending requirements, guidelines for new program approval, 
regulations for proprietary information, reporting requirements, and 
other issues. The rule will focus additional financing efforts by the 
GSEs on underserved areas and lower-income families facing 
affordability problems. It will provide final guidance to replace the 
Interim Notice under which the GSEs' affordable housing programs are 
operating.
Prior to drafting this proposed rule, HUD met many times with the GSEs 
to discuss issues relating to the Interim Notice under which the GSEs 
were operating. HUD also held two roundtables to discuss the definition 
of ``underserved'' used in establishing the central cities, rural 
areas, and other underserved areas goals. Roundtable participants 
included the GSEs, researchers, other Federal agencies (Department of 
Agriculture, Farmers Home, Census Bureau), the Congressional Budget 
Office, and public-interest groups. HUD also held four meetings with 
the GSEs during the drafting of the proposed rule for the purpose of 
allowing HUD to clarify assumptions it was making about the GSEs' 
operations and projections of future activities.
Regulatory Action: Regulations Implementing the Multifamily Housing 
Property Disposition Reform Act of 1994
The Reform Act will expedite the foreclosure of multifamily projects 
with HUD-held mortgages and the sale of multifamily HUD-owned projects. 
Expediting the foreclosure and disposition process will reduce the cost 
to the Federal Government of this program and facilitate the return of 
the housing inventory to the private housing market. It also will free 
HUD staff to focus on other housing priorities.
The regulations will utilize a user-friendly question-and-answer 
format, as well as several charts to explain the more complicated 
sections.
Regulatory Action: RESPA: Computer Loan Origination and Controlled 
Business Amendments
This regulation will amend the RESPA rule issued November 2, 1992. It 
will revise the rule's provisions on use of computer loan origination 
services and employer-employee exempted payments. This rule promotes 
the use of interactive electronic technology. In September 1994, the 
Department sponsored a demonstration of this technology for use in 
computer loan origination. In addition, the Department conducted an 
electronic conference on the rule from August 19, 1994, through 
September 30, 1994.
Regulatory Action: GNMA Multiclass Securities Program--Final Rule
The GNMA Multiclass Securities Program provides increased demand for 
federally insured and guaranteed mortgages by allowing sponsors to 
create multiclass securities, backed by GNMA single class mortgage-
backed securities, to meet various investors' particular needs. As a 
result the program enhances liquidity and promotes expanded housing 
opportunities for low- and moderate-income people by effectively 
lowering interest rates to the homebuyer.
Priority: Opening Housing Markets
Open housing markets to minorities through vigorous enforcement of fair 
housing laws and support for creative metropolitan-wide housing and 
urban development initiatives.
The rules proposed in this section of the plan support not only the 
Secretary's priority but also the implementation of Executive Order 
12892 of January 17, 1994, Leadership and Coordination of Fair Housing 
in Federal Programs: Affirmatively Furthering Fair Housing.
Regulatory Action: Implement Fair Housing Planning To Affirmatively 
Further Fair Housing in Community Planning and Development Programs
The Fair Housing Plan rule will establish clear requirements for 
entitlement recipients on their obligations to affirmatively further 
fair housing, promote significantly greater housing choice and 
opportunity for protected classes, and promote customized remedies for 
locally identified housing and related discriminatory practices.
Regulatory Action: Regulation on Affirmatively Furthering Fair Housing 
in All HUD Programs
This rule will provide clear guidance for HUD staff and program 
participants on the requirement for affirmatively furthering fair 
housing in all HUD programs. It will demonstrate the Department's 
commitment to affirmatively further fair housing.
Regulatory Action: Regulation on Significant Facilities and Services
This rule sets forth the requirements which must be met for housing for 
persons 55 or older to qualify for exemption from the provisions of the 
Fair Housing Act prohibiting discrimination based on familial status. 
The proposed rule published July 7, 1994, uses a new approach to 
rulemaking by providing extensive examples and fact patterns describing 
circumstances which may be a violation of the Act.
To assure adequate opportunities for public comment, the proposed rule 
provides for a 90-day public comment period and the Department is 
conducting four public meetings to solicit additional comments before 
preparation of a final rule.
Regulatory Action: Mortgage Lending Rule: Implementation of Provisions 
of Title VIII Which Prohibit Discrimination in Lending and the 
Provision of Other Financial Assistance
This rule will set forth policies and practices in the provision of 
mortgage lending which may be violations of the Fair Housing Act. It 
will also implement provisions of the Fair Housing Act that prohibit 
discrimination in the making, purchasing, selling, and servicing of 
home mortgage loans, and the provision of other financial assistance 
relating to dwellings.
This rule will also contain an appendix with extensive examples of 
different fact patterns and circumstances that may be violations of the 
Act. Four public meetings will be conducted on this issue before 
publication of a proposed rule.
Regulatory Action: Regulation on Property Insurance
This rule will set forth the policies and practices in the provision of 
property insurance which may be violations of the Fair Housing Act. It 
will provide guidance to the property insurance industry on compliance 
with the Act and improve the effectiveness of HUD's enforcement.
This rule will also contain an appendix with extensive examples of 
different fact patterns and circumstances that may be violations of the 
Act. To assure broad public participation in the development of this 
rule, HUD published an advance notice of proposed rulemaking on August 
16, 1994. Four public meetings will also be conducted on this issue 
before publication of a proposed rule.
Regulatory Action: Disparate Impact Rule
This rule will set standards for determining if business practices 
which are neutral on their face are violations of Title VIII of the 
Fair Housing Act. This rule will indicate that a violation of the Act 
can be established without evidence of intent to discriminate. The rule 
will permit more expeditious relief for victims of this form of 
discrimination.
This rule will also contain an appendix with extensive examples of 
different fact patterns and circumstances that may be violations of the 
Act.
Priority: Empower Communities
Empower communities by supporting local efforts to transform 
neighborhoods, by reinvigorating economic development programs and 
creating new opportunities for people and businesses, and by supporting 
community-based organizations.
Regulatory Action: Final Rule on Empowerment Zones and Enterprise 
Communities
The Empowerment Zones program is a key step in rebuilding communities 
in America's poverty-stricken inner cities and rural heartland. It is 
designed to empower people and communities across the nation by having 
them identify their own needs and goals and giving them access to 
government resources at all levels to address their needs and 
revitalize their poorest neighborhoods. HUD's January 18, 1994, interim 
rule for the urban Empowerment Zone/Enterprise Community Program was 
issued simultaneously with the Department of Agriculture's rule for the 
rural Program. The applications for both programs are being reviewed by 
an interagency task force.
The urban part of the program will be administered by HUD as a Federal-
State-local partnership, with a minimum of red tape associated with the 
application process. The Federal Government will take steps to 
coordinate Federal assistance in support of the designated areas, 
including expedited processing, priority funding and working to 
overcome programmatic regulatory and statutory impediments. This unique 
interagency effort is being carried out under the leadership of the 
President's Community Enterprise Board.
Regulatory Action: Consolidated Planning, Application and Reporting 
Process for CPD Programs
This rule consolidates planning, application, and reporting 
requirements for all major Community Planning and Development formula 
programs: Comprehensive Housing Affordability Strategy, Community 
Development Block Grants, HOME Investment Partnerships, Emergency 
Shelter Grants and Housing Opportunities for Persons With AIDS. As part 
of the HUD Reinvention process, the Department has consulted with 
thousands of jurisdictions, grantees, and providers to identify ways to 
make the program work better. The Consolidated Plan is a key step in 
responding to the need for change and assisting grantees in rebuilding 
communities. It is designed to empower people and communities across 
the Nation by having them identify their own needs and goals and by 
providing access to government resources that will help them revitalize 
their communities. The consolidated planning process provides new tools 
for enhancing citizen participation and strategic planning. It also 
seeks to renew partnerships between HUD, State and local governments, 
public and private agencies and the general citizenry by empowering 
field staff to assist in developing creative solutions to community 
problems.
To support the implementation of the Consolidated Plan the Department 
will be deploying new computer software to automate the application 
process. This new software will encourage jurisdictions to present 
comprehensive information in easy-to-read charts, graphs and maps, so 
that citizens can better understand the relationships between community 
needs and potential solutions.
Regulatory Action: Final Rule Implementing the HOME Investment 
Partnerships Program Act
Improved administration of the HOME program to increase its 
effectiveness as a vehicle for providing housing opportunities in 
communities has been a priority of the Department. HUD published an 
interim rule implementing the HOME Program in December, 1991. Since 
that time, HUD has published five additional interim rules. These rules 
were developed to implement statutory changes made by the Housing and 
Community Development Act of 1992 and the Multifamily Housing Property 
Disposition Reform Act of 1994 and to make changes that would simplify 
State and local operation of the HOME Program and make it more 
compatible with other Federal housing programs based upon comments 
received during numerous public comment periods. This rule will provide 
a final rule for HOME and further streamline and improve HOME Program 
operations at the State and local level by drawing upon the experiences 
of commenters with the HOME Program to develop the final rule.
Other Priority Regulations
The following regulations support multiple programs or reflect specific 
legislative initiatives.
Regulatory Action: Revision of Lead-Based Paint Rules
The Housing and Community Development Act of 1992 (Title X) made 
significant revisions to the requirements on the evaluation and control 
of lead-based paint hazards in federally assisted and federally owned 
housing. The implementing regulations will specify what must be done, 
when, and by whom, in each housing program, and they will state minimum 
standards for how the activities must be done. The purpose of the 
requirements is to reduce childhood exposure to lead without reducing 
the supply of affordable housing.
Because of the magnitude of the changes required in HUD's lead-based 
paint regulations, and the impact these changes will have on other 
government agencies, the real estate industry and the general public, 
HUD is seeking information from outside organizations and individuals 
in the development of the Title X regulations. To date HUD has used the 
following avenues for outside information:
1. HUD hosts a monthly meeting of the Federal Interagency Lead-Based 
Paint Task Force. The interagency task force provides a forum for 
Federal agencies to discuss the impact of Title X.
2. HUD participates in the Task Force on Lead-Based Paint Hazard 
Reduction and Financing, established by Section 1015 of Title X. The 
task force includes representatives of public agencies, advocacy 
groups, the real estate industry, insurance and financing 
organizations, and private citizens. The purpose of the task force is 
to discuss issues related to the lead-based paint problem and make 
recommendations to the Secretary of HUD and the Administrator of EPA by 
Jan. 1995. Issues include financing, insurance, liability and 
underwriting. HUD has been using the resources of the task force as it 
tackles some of the more controversial issues posed by the new Title X 
regulations.
3. HUD has hosted a meeting with representatives of public housing 
authorities and related associations, and a conference call with HUD 
field staff and CPD grantees, to gather client input into the 
development of the Title X regulations.
Regulatory Action: Restrictions on Housing Assistance to Noncitizens
This rule will implement the provisions of Section 214 of the Housing 
and Community Development Act of 1980, as amended, that limit admission 
to federally assisted housing to citizens and certain categories of 
resident aliens. Currently, public housing agencies and assisted 
housing owners may not take citizenship into consideration in 
determining eligibility for housing assistance. As a result, the 
programs may be serving large numbers of undocumented noncitizens in 
some parts of the country.
Despite several previous attempts to issue a rule, this provision of 
the law has never been implemented. This rule is modeled on the October 
1988 proposed rule, and takes into consideration public comments 
received on the October 1988 proposed rule, including comments received 
on this rule in early 1994 from several organizations with particular 
interest in immigration matters. It also reflects close coordination 
with the Department of Justice's Immigration and Naturalization 
Service. The rule provides for the use of INS's automated SAVE system 
as an integral basis for compliance with the rule.
Regulatory Action: Title VI Mixed Populations Rule
Title VI of the Housing and Community Development Act of 1992 addresses 
the issue of ``mixed populations'' (the combination of elderly and 
disabled persons and families) in public housing and in certain HUD-
assisted housing, and provides that under certain conditions, housing 
authorities and owners may provide housing occupied only by, or 
substantially by, elderly families, or only by, or substantially by, 
disabled families. Subtitle B of Title VI addresses the issue of mixed 
populations in public housing. The Department published its final rule 
implementing Subtitle B (``Designated Housing'') on April 13, 1994.
Subtitle D of Title VI addresses the issue of mixed populations in 
certain HUD-assisted housing and allows an owner of a covered Section 8 
housing project to elect to provide preferences in housing to elderly 
families subject to certain statutory requirements. Subtitle D was 
enacted to address recent problems arising from mixing elderly persons 
and nonelderly disabled persons in HUD-assisted housing. This rule will 
make final the interim rule issued on May 3, 1994.
The development of the final rule will have the benefit of insights 
that will be gained at one or more informal consumer forums where HUD 
staff meet with residents of HUD-assisted housing who represent both 
elderly residents and nonelderly persons with disabilities.
_______________________________________________________________________
HUD--Office of the Secretary (HUDSEC)
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
64. REGULATIONS IMPLEMENTING THE SECRETARY'S AUTHORITY OVER FNMA AND 
FHLMC (FR-3481)
Legal Authority:


 12 USC 4501 to 4589


CFR Citation:


 24 CFR 81


Legal Deadline:


 Final, Statutory, April 28, 1994.


Abstract:


Under subtitle A, part 2, of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (Title XIII of the Housing and 
Community Act of 1992) (FHEFSSA), the Secretary has general regulatory 
authority over the Federal National Mortgage Association (Fannie Mae) 
the Federal Home Loan Mortgage Corporation (Freddie Mac) (jointly 
referred to as ``enterprises''). The Secretary's responsibility does 
not encompass areas specifically under the authority of the Director of 
the Office of Federal Housing Enterprise Oversight and all other 
matters relating to the safety and soundness of the enterprises. The 
FHEFSSA provided the Secretary with new authority to ensure that each 
enterprise fulfills its obligations to facilitate the financing of 
affordable housing for low- and moderate-income families in a manner 
consistent with the enterprise's overall public purposes, while 
maintaining a strong financial condition and reasonable economic 
return. Pursuant to the FHEFSSA and in accordance with the requirements 
in Part 2 for notice-and-comment rulemaking, this rule would implement 
the Secretary's regulatory authority over Fannie Mae and Freddie Mac 
regarding the establishment of housing goals for 1995 and following 
years, fair-lending requirements, approval of new programs, proprietary 
information, reporting requirements, and other issues.


Statement of Need:


Status as a government-sponsored enterprise provides important benefits 
to the enterprises and their stockholders. The FHEFSSA outlines a 
strategy to ensure that the enterprises fulfill the public purposes set 
out in their charters. The Department currently is operating under an 
interim notice that details the enterprises' housing goals for 1993 and 
1994. The statute requires that the Department publish a final rule by 
April 28, 1994, after notice-and-comment rulemaking.


Summary of the Legal Basis:


The regulations are required by section 1349 of the Federal Housing 
Enterprises Financial Safety and Soundness act of 1992 (12 USC 4589).


Alternatives:


In developing the proposed rule, the Department considered the 
experience gained and lessons learned while operating under the interim 
notice during the transition period of 1993 and 1994. The Department 
also conducted extensive analysis and research to determine the 
appropriate changes to the housing goals. Changes from the interim 
notice will be designed to make the regulatory process simpler and more 
streamlined for the enterprises. These changes would include 
streamlining the reports that the enterprises are required to provide 
to HUD and modifying requirements about which mortgage purchases would 
qualify for consideration in meeting the goals established for the 
enterprises. Under the modified requirements the Department expects 
more transactions to count toward mortgage purchase goals.


HUD has met numerous times with the enterprises to discuss issues 
relating to the interim notice, under which the enterprises have been 
operating. In addition, HUD also held two roundtables to discuss the 
definition of ``underserved'' used in establishing the mortgage 
purchase goals for central cities, rural areas, and other underserved 
areas. Roundtable participants included the enterprises, researchers, 
other Federal agencies (Department of Agriculture, Farmers Home 
Administration, Census Bureau), the Congressional Budget Office, and 
public-interest groups. HUD also held four meetings with the 
enterprises as the proposed rule was being developed, for the purpose 
of clarifying assumptions HUD was making about the enterprises' 
operations and projections of future activities.


Anticipated Costs and Benefits:


Costs: Increased targeting to low- and moderate-income families and 
underserved areas will increase the credit risk or mortgage default 
costs experienced by the enterprises. The magnitude of this effect is 
expected to be small, given their expertise in attracting and 
underwriting creditworthy low-income borrowers. There may also be some 
increased cost associated with additional program outreach toward low- 
and moderate-income borrowers and borrowers in underserved market 
areas. With respect to fair housing regulations, there will be costs 
associated with the additional reporting and remedial actions by the 
enterprises that are mandated by FHEFSSA.


Benefits: The rule would establish that there are substantial unmet 
housing needs among low-income households and in distressed 
neighborhoods. The rule will benefit very low-, low-, and moderate-
income families by assuring that an appropriate portion of the mortgage 
purchases of each enterprise relate to housing affordable to low-income 
families and housing in underserved areas. The rule will also establish 
a framework through which the enterprises will be involved in helping 
to eliminate discrimination in mortgage finance and to promote Federal 
fair housing objectives.


Risks:


In relevant part, FHEFSSA was designed to ensure that the enterprises 
accomplish their public missions. Absent effective regulations, 
Congress and the public do not know whether the enterprises are 
carrying out the public purposes required of them in exchange for their 
status as government-sponsored enterprises. The rule would establish a 
comprehensive framework that would allow HUD to regulate the 
enterprises effectively within the scope of HUD's statutory authority.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           11/00/94
Final Action                                                   04/00/95
Small Entities Affected:


None


Government Levels Affected:


Federal


Agency Contact:
Stephanie Smith
Department of Housing and Urban Development
Office of the Secretary
202 708-0488
RIN: 2501-AB56
_______________________________________________________________________
HUD--HUDSEC
65. CONSOLIDATED PLANNING, APPLICATION AND REPORTING PROCESS FOR CPD 
PROGRAMS: CHAS CDBG, HOME, ESG & HOPWA (FR-3611)
Legal Authority:


 42 USC 3535(d)


CFR Citation:


 24 CFR 91; 24 CFR 92; 24 CFR 570; 24 CFR 574; 24 CFR 575


Legal Deadline:


None


Abstract:


This rule would consolidate the planning, application and reporting 
requirements for all major community planning and development formula 
programs. It would simplify the process of requesting and obtaining 
formula grant funds, and promote citizen participation, strategic 
planning, and consultation among public and private agencies, including 
those outside a single jurisdiction. The rule would replace the current 
uncoordinated approach with an integrated approach to focus on 
performance and problem solving. The consolidation is expected to be in 
place for Fiscal Year 1995.


The Consolidated Plan is a key step in rebuilding communities. It is 
designed to empower people and communities across the nation by having 
them identify their own needs and goals and giving them access to 
government resources to address their needs and revitalize communities. 
The consolidated planning process provides new tools for enhancing 
citizen participation and strategic planning. The new computer software 
that is part of the consolidated planning process encourages 
jurisdictions to present comprehensive information in easy-to-read 
charts, graphs and maps, so that citizens can better understand the 
relationships between community needs and potential solutions. It also 
seeks to establish a renewed partnership between HUD, State and local 
governments, public and private agencies and the general citizenry by 
empowering field staff to work with other entities in fashioning 
creative solutions to community problems. As a part of the HUD 
Reinvention process, the Department has consulted with thousands of 
jurisdictions, grantees, providers, and citizens to identify ways to 
make the program work better.


Statement of Need:


The current fragmented process for requesting and obtaining formula 
grant funds hinders the efforts of communities and States to adopt an 
intelligent, coordinated approach to solving housing and community 
development problems. The new approach, which requires localities to 
operate these programs in the same program year, offers jurisdictions 
the opportunity to shape these and other programs into effective, 
coordinated neighborhood and community development strategies to 
revitalize communities.


Summary of the Legal Basis:


The rule combines the Comprehensive Housing Affordability Strategy and 
non-housing Community Development Plan requirements contained in the 
National Affordable Housing Act as amended. The statute states the 
Secretary shall prescribe the requirements for the nonhousing community 
development needs by regulation. The legal basis for application and 
reporting requirements for the covered programs are contained in the 
relevant statutes.


Alternatives:


The National Affordable Act does not provide discretion in implementing 
provisions of the Comprehensive Housing Affordability Strategy and the 
nonhousing Community Development Plan.


Anticipated Costs and Benefits:


Costs: The cost of preparing the Consolidated Plan is estimated at 
720,850 hours. However, this represents a reduction in the total annual 
burden on respondents by 240,000 hours and results in a net savings of 
an estimated $3.6 million.


Benefits: Consolidated planning will result in more effective and 
efficient use of Federal, State and local funds and better targeting 
and delivery of services.


Risks:


The lack of such a rule would hinder the ability of States and 
communities to adopt an intelligent, coordinated approach to solving 
housing and community development problems.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 40148                                    08/05/94
NPRM Comment Period End                                        10/04/94
Final Action                                                   12/00/94
Small Entities Affected:


None


Government Levels Affected:


State, Local, Federal


Agency Contact:
Joseph Smith
Acting Director, Policy Coordination Unit
Department of Housing and Urban Development
Office of Community Planning and Development
202 708-1283
RIN: 2501-AB72
_______________________________________________________________________
HUD--HUDSEC
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
66. LEAD-BASED PAINT POISONING PREVENTION IN CERTAIN RESIDENTIAL 
STRUCTURES (FR-3482)
Legal Authority:


 42 USC 4822; 42 USC 3535(d)


CFR Citation:


 24 CFR 36; 24 CFR 37


Legal Deadline:


 Final, Statutory, January 1, 1995.


Abstract:


The Office of Lead-Based Paint Abatement and Poisoning Prevention was 
established by Congress within the Office of the Secretary of HUD. The 
Office provides overall direction to HUD's lead-based paint activities. 
Currently, part 35 of HUD's regulations address the Department's 
requirements on lead hazards in housing. The Residential Lead-Based 
Paint Hazard Reduction Act of 1992, which is Title X of the Housing and 
Community Development Act of 1992 (Title X), requires substantial 
revisions to HUD's current regulations for the evaluation and control 
of lead-based paint hazards in federally assisted and federally owned 
housing. This legislation evidences a concern with developing a 
national strategy to build the infrastructure necessary to eliminate 
lead-based paint hazards in all housing. Because of the scope of the 
problem, the strategy will be implemented on a priority basis and, in 
part, is to be based on guidelines issued by the Secretary on the 
conduct of federally supported work involving risk assessments, 
inspections, interim controls, and abatement of lead-based paint 
hazards. The revisions required by Title X will affect HUD's housing 
programs and the housing programs of other Federal agencies.


HUD will consolidate in new parts 36 and 37 of title 24 of the Code of 
Federal Regulations the multitude of lead- based paint regulations 
found through HUD programs and will make them more consistent. This 
will create a single point-of-reference for all of the Department's 
lead-based paint requirements.


Statement of Need:


The Centers for Disease Control and Prevention (CDC) have labeled lead 
poisoning as the leading environmental health hazard facing America's 
children. Childhood lead exposure had been shown to cause damage to the 
brain and nervous system, which may cause behavior and learning 
problems, slowed growth, hearing problems, and kidney damage. The 
results of CDC's third National Health and Nutrition Examination Survey 
(NHANES III, 1988-1991) indicate that lead exposure has decreased 
dramatically as a result of the deleading of gasoline. However, the CDC 
report has concluded that lead paint in older housing is now the 
primary source of lead exposure. CDC found that 8.9 percent of all 
American children less than 6 years of age had blood lead levels 
greater than CDC's level of concern (10mcg/dl). In large central 
cities, the figure was 21 percent, and among non-Hispanic black 
children in large central cities, 36.7 percent had blood lead levels 
above the level of concern. The NHANES report indicates that preventive 
measures are working, but that more needs to be done to address the 
danger in the nation's older housing stock.


Summary of the Legal Basis:


Title X amends the Lead-Based Paint Poisoning Prevention Act (42 USC 
4822) to focus attention and resources on identifying and controlling 
lead-based paint hazards in federally assisted and federally owned 
housing before children are poisoned.


Alternatives:


The statute is generally prescriptive in requiring regulatory action to 
be taken by HUD. For certain HUD programs the Department has some 
discretion in the level of hazard evaluation and control measures to be 
undertaken. Alternatives being considered are primarily (1) the amount 
of onsite work that is required for hazard evaluation and control, and 
(2) the level of lead ``safeness'' that must be achieved. In 
determining an optimum level of safeness, HUD expects to evaluate the 
effectiveness of notification and disclosure requirements and good 
maintenance and housekeeping practices.


Because of the magnitude of the changes required in HUD's lead-based 
paint regulations and the impact these changes will have on other 
government agencies, the real estate industry, and the general public, 
HUD is seeking information from outside organizations and individuals 
in the development of the Title X regulations. To date HUD has used the 
following avenues for outside information:


1. HUD hosts a monthly meeting of the Federal Interagency Lead-Based 
Paint Task Force. The interagency task force provides a forum for 
Federal agencies to discuss the impact of Title X.


2. HUD participates in the Task Force on Lead-Based Paint Hazard 
Reduction and Financing, established by section 1015 of Title X. The 
task force includes representatives of public agencies, advocacy 
groups, the real estate industry, insurance and financing 
organizations, and private citizens. The purpose of the task force is 
to discuss issues related to the lead-based paint problem and, by 
January 1995, make recommendations to the Secretary of HUD and the 
Administrator of EPA. Issues being discussed include financing, 
insurance, liability, and underwriting. HUD has been using the 
resources of the task force as HUD tackles some of the more 
controversial issues to be addressed in the new Title X regulations.


3. HUD has hosted a meeting with representatives of public housing 
authorities and related associations, and has sponsored a conference 
call with HUD field staff and CPD grantees, to gather client input into 
the development of the Title X regulations.


Anticipated Costs and Benefits:


HUD is in the early stages of estimating the costs of increased hazard 
evaluation and control measures, such as new risk assessment and 
expanded paint stabilization requirements. It is expected that full 
implementation of the law could cost HUD programs in the hundreds of 
millions of dollars annually. HUD program offices will bear the 
majority of these costs, and to a lesser extent, HUD grantees will take 
on additional lead abatement costs. A regulatory impact analysis will 
accompany the Title X regulations.


There will also be some cost to the real estate industry in 
implementing the new lead-based paint notification requirements of 
Title X. This includes notification to occupants when a risk 
assessment, inspection, or hazards reduction activity has been 
undertaken. In addition, the seller/lessor is required to provide the 
purchaser/lessee with a lead hazard information pamphlet.


Notification requirements in real estate transactions could result in 
market price changes, creating a transfer of wealth from owners of 
housing containing lead-based paint to owners of lead-free housing.


Health benefits of the new regulations will include a reduction in lead 
poisoning exposures among children, subsequently reducing costs for 
medical treatment. The regulations will offer environmental protection 
to more families with young children by reducing lead paint hazards in 
the country's housing stock.


Risks:


Without the regulatory changes required by title X, childhood lead 
exposures will continue at current levels.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Interim Final Rule                                             10/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


State, Local, Federal


Agency Contact:
Ronald J. Morony
Deputy Director, Lead-Based Paint Abatement & Poisoning Prevention
Department of Housing and Urban Development
Office of the Secretary
202 755-1805
RIN: 2501-AB57
_______________________________________________________________________
HUD--HUDSEC
67. HOME INVESTMENT IN AFFORDABLE HOUSING PROGRAM (FR-2937)
Legal Authority:


 42 USC 12721


CFR Citation:


 24 CFR 92


Legal Deadline:


None


Abstract:


Title II of the National Affordable Housing Act of 1990 established the 
HOME Investment Partnership Program. This program is intended to expand 
the supply of decent, safe and sanitary affordable housing. Under the 
HOME Program, HUD provides formula allocations to participating States 
and units of local government to be used for specified eligible housing 
activities in accordance with the jurisdiction's approved housing plan. 
A portion of each allocation must be invested in housing developed, 
owned or sponsored by community housing development organizations. HUD 
provides technical assistance to develop the capacity of participating 
jurisdictions and has developed model programs designed to assist 
participating jurisdictions in carrying out their programs.


HUD published an interim rule implementing the HOME Program in December 
1991. Since that time, HUD has published five additional interim rules. 
These rules were developed to implement statutory changes by the 
Housing and Community Development Act of 1992 and the Multifamily 
Housing Property Disposition Reform Act of 1994. These rules also made 
changes in response to public comments that were solicited as each rule 
was published, HUD's experience in administering the program, and the 
input of program participants at numerous training sessions across the 
country. The changes simplify State and local operation of the HOME 
Program and make it more compatible with other Federal housing 
programs.


Statement of Need:


Promulgation of this regulation is necessary to permit HUD to simplify 
and improve the operation of the HOME Program.


Section 206 of the National Affordable Housing Act requires that HUD 
promulgate regulations governing the operation of the HOME Program. 
State and local participating jurisdictions have been operating the 
HOME Program for more than two years under interim regulations. In an 
effort to further streamline and improve HOME Program operations at the 
State and local level, HUD intends to solicit public comment on the 
current HOME regulations and potential refinements to the program from 
all interested parties. HUD will draw upon the experiences of 
commenters with the HOME Program to develop the final rule.


Summary of the Legal Basis:


Section 206 of the National Affordable Housing requires the Department 
to issue regulations to implement the HOME Program after notice and 
opportunity for comment.


Alternatives:


HUD could continue the operation of the HOME Program under the current 
interim rule. However, it would forfeit the opportunity to make 
refinements to the program based upon experience and the attendant 
benefits to jurisdictions participating in the program.


Anticipated Costs and Benefits:


Costs: While the final rule is expected to streamline and simplify HOME 
program operations for participating jurisdictions, HUD does not expect 
that this rule will significantly alter the reporting and paperwork 
burden estimates previously submitted by the Department and approved by 
OMB.


Benefits: HUD expects that the opportunity to solicit additional public 
comment based upon actual experience in implementing the program and to 
modify programmatic requirements in response to that experience will 
result in substantial simplification of program administration. The 
jurisdictions administering the program and the private and public for-
profit and non-profit entities participating in the program will be 
able to provide low-income housing more quickly and at lower cost.


Risks:


HUD could continue to operate the HOME Program under the current 
interim regulations. In doing so, however, it would forego the 
opportunity to solicit additional public comment and to refine the 
program rules.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            56 FR 11592                                    03/19/91
NPRM Comment Period End                                        04/18/91
Interim Final Ru56 FR 65312                                    12/16/91
Interim Final Ru56 FR 65312e Date                              01/16/92
Interim Final Rule Comment Period End                          05/01/92
Interim Final Rule Effective Date                              05/01/92
Interim Final Ru57 FR 60960                                    12/22/92
Interim Final Rule Comment Period End                          02/22/93
Final Action                                                   06/00/95
Small Entities Affected:


Businesses, Governmental Jurisdictions, Organizations


Government Levels Affected:


State, Local


Agency Contact:
Mary Kolesar
Director, Program Policy Division, Office of Housing Program
Department of Housing and Urban Development
Office of Community Planning and Development
202 708-2470
RIN: 2501-AB12
_______________________________________________________________________
HUD--HUDSEC
68. RESTRICTIONS ON ASSISTANCE TO NONCITIZENS (FR-2383)
Legal Authority:


 42 USC 1436a


CFR Citation:


 24 CFR 200; 24 CFR 215; 24 CFR 235; 24 CFR 236; 24 CFR 247; 24 CFR 
812; 24 CFR 880; 24 CFR 881; 24 CFR 882; 24 CFR 883; 24 CFR 884; 24 CFR 
885; 24 CFR 886; 24 CFR 887; 24 CFR 912; ...


Legal Deadline:


None


Abstract:


On August 25, 1994, HUD published a proposed rule on section 214 of the 
Housing and Community Development Act of 1980, as amended in 1981, 
1986, and 1988 (Section 214). Section 214 prohibits the Secretary of 
the Department of Housing and Urban Development (HUD) from providing 
financial assistance to persons who are not citizens or nationals of 
the United States, or who do not meet one of the six categories of 
eligible noncitizens specified in Section 214. The restrictions of 
Section 214 apply to HUD's Public and Indian Housing programs, the 
Section 8 Housing Assistance Payments programs, the Rent Supplement 
program, the Section 236 program and the Section 235 homeownership 
assistance program.


The August 25, 1994 rule proposed to implement the restrictions against 
access to federally assisted housing by persons with ineligible 
immigration status in a way that assures (1) that ineligible 
noncitizens do not receive scarce housing resources, (2) the protection 
of eligible persons from discrimination on the basis of national 
origin; and (3) the process for determining eligibility of noncitizens 
is as fair and expeditious as possible.


There have been several attempts by HUD to implement the restrictions 
of Section 214. Rules, both proposed and final, were published in 1982, 
1986 and 1988. Despite the publication of final rules during the period 
between 1982 and 1988, the restrictions of Section 214 have not been 
made effective. A comprehensive proposed rule was published in October 
1988, which would have provided for implementation of Section 214 as 
last amended in 1987, but this rule was not made final. The August 25, 
1994, proposed rule is modeled on the October 1988 proposed rule, and 
takes into consideration public comments received on the October 1988 
proposed rule.


In addition to the comments received on the 1988 proposed rule, HUD 
held an informal meeting at HUD Headquarters in February 1994 on the 
subject of the restrictions imposed by Section 214. The meeting was 
attended by the Farmers Home Administration and several organizations 
with particular interest in immigration matters, including 
organizations that represent the interests of low-income and minority 
persons. These organizations submitted additional comments at, and 
subsequent to, the February 1994 meeting, and these comments were taken 
into consideration in development of the August 25, 1994 proposed rule. 
The August 25, 1994, proposed rule also reflected close coordination 
with the Department of Justice's Immigration and Naturalization 
Service.


Statement of Need:


This rule is needed to implement the provisions of section 214 which 
limit admission to federally assisted housing to U.S. citizens, 
nationals and certain categories or resident noncitizens. Until a final 
rule on Section 214 is published and made effective, public housing 
agencies (PHA) and assisted housing owners (project owners) may not 
take citizenship or immigration status into consideration in 
determining eligibility for housing assistance. As a result, HUD's 
housing programs in some parts of the country may be serving large 
numbers of noncitizens who are not eligible to receive HUD assistance 
for housing.


Summary of the Legal Basis:


Section 214 of the Housing and Community Development Act of 1980, as 
amended in 1981, 1986 and 1988 prohibits the Secretary from providing 
financial assistance to persons who are not citizens or nationals of 
the United States or who do not meet one of the six categories of 
eligible noncitizens specified in section 214.


Alternatives:


There is no viable alternative to this rulemaking. If HUD were to 
withdraw the rule, either the provisions of section 214 would never be 
implemented or they would be self-implemented by PHAs and project 
owners. In the latter case, the potential for discrimination and 
inconsistent implementation would be certain to spawn protracted and 
destructive litigation.


Anticipated Costs and Benefits:





Costs: HUD estimates that the direct cost to the Federal Government 
will be about $500,000 per year to pay for inquiries to the INS save 
system. Some PHAs may incur additional costs for secondary 
verifications, hearings and evictions.


Benefits: The benefits are mostly in terms of compliance with the law. 
It costs no more to serve an ineligible noncitizen in assisted housing 
than it does an ``eligible'' tenant. The main effect of the rule will 
be a redistribution of housing subsidy transfer payments from 
ineligible noncitizens to eligible tenants.


Risks:


A consequence of not implementing section 214 through rulemaking would 
be that ineligible noncitizens would continue to receive assistance 
ahead of eligible families. There is a risk of protracted litigation.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            53 FR 41038                                    10/19/88
NPRM Comment Per53 FR 41038                                    12/19/88
NPRM            59 FR 43900                                    08/25/94
NPRM Comment Period End                                        10/24/94
Final Action                                                   12/00/94
Small Entities Affected:


None


Government Levels Affected:


State, Local, Tribal, Federal


Additional Information:


ADDITIONAL AGENCY CONTACT: Barbara Hunter, Acting Director, Planning & 
Procedures (Phone: 202-708-3944)


Agency Contact:
Edward Whipple
Director, Rental & Occupancy Branch
Department of Housing and Urban Development
Office of Public and Indian Housing
202 708-0744
RIN: 2501-AA63
_______________________________________________________________________
HUD--Office of Housing (OH)
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
69.  MULTIFAMILY PROPERTY DISPOSITION (FR-3715)
Legal Authority:


 PL 102-233


CFR Citation:


 24 CFR 290; 24 CFR 886


Legal Deadline:


 Other, Statutory.


July 11,1994


Abstract:


The rule amends HUD's multifamily property disposition regulations at 
24 CFR 290 and 886, subpart C, to incorporate statutory amendments 
arising from the Multifamily Property Disposition Reform Act of 1994 
affecting the foreclosure of projects with HUD-held multifamily 
mortgages, the disposition of HUD-owned multifamily properties, and the 
management of HUD-owned multifamily properties and multifamily 
properties with HUD-held mortgages where the Secretary of HUD is 
mortgagee-in-possession.


The new regulations use an innovative user-friendly question and answer 
format, as well as several charts to explain the more complicated 
sections.


Statement of Need:


The regulations at 24 CFR 290 must be conformed to changes enacted in 
Sections 101(b) - (d) of the Multifamily Property Disposition Reform 
Act of 1994 (MPDRA) (Pub. L. 102-233, approved April 11, 1994). The 
legislation was passed in an urgent attempt to speed HUD's sales of 
HUD-owned projects and foreclosure of HUD-held mortgages; to better 
target, and thus potentially reduce, the need for Section 8 assistance 
required by the prior statute; and to provide HUD with more discretion 
in the operation of the multifamily property disposition program. 
Conforming changes must be made to the regulations at 24 CFR 886 
subpart C, which govern section 8 assistance for the disposition of 
multifamily projects.


Summary of the Legal Basis:


MPDRA section 101(f) requires HUD to issue interim regulations 
necessary to implement Section 101(b) - (d) 90 days after enactment 
and, following public comment, a final rule not later than 12 months 
after the issuance of the interim regulations.


Alternatives:


Rather than follow the usual format for a regulation, this regulation 
makes use of tables that lay out--in a more simplified and user-
friendly manner--the complex provisions of the regulation, and then 
provides additional detail to flesh out the information in the tables 
with a question and answer format.


Anticipated Costs and Benefits:


Costs: Because the revised regulations amend existing regulations to 
streamline and speed the process of property disposition, and should 
result in few or no additional monitoring or reporting burdens, 
additional costs to HUD are negligible. Benefits: The 1994 Act, and 
subsequently the revised 290 regulations, are intended to speed 
foreclosure sales of projects with HUD-held mortgages and sales of HUD-
owned projects, and also reduce the need to provide Section 8 rent 
subsidies in those sales. Both actions should significantly reduce 
government costs and transfer payments by reducing the cost involved in 
HUD ownership and the amount of longer term Section 8 subsidies.


Risks:


The lack of a regulation implementing the 1994 Act may result in 
increased government holding costs and unnecessary expenditures of 
Section 8 funds.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Interim Final Rule                                             10/00/94
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Frank Malone
Director, Office of Preservation & Property Disposition
Department of Housing and Urban Development
Office of Housing
202 708-3555
RIN: 2502-AG30
_______________________________________________________________________
HUD--OH
70. PREFERENCE FOR ELDERLY FAMILIES IN CERTAIN SECTION 8 HOUSING; AND 
RESERVATION OF UNITS FOR DISABLED FAMILIES (FR-3465)
Legal Authority:


 42 USC 3535(d); 42 USC 13604 to 13614; 42 USC 1437


CFR Citation:


 24 CFR 886; 24 CFR 880; 24 CFR 881; 24 CFR 883; 24 CFR 884


Legal Deadline:


 Final, Statutory, April 28, 1993.


Abstract:


Subtitle D of title VI of the Housing and Community Development Act of 
1992 (HCD Act of 1992) allows an owner of a covered Section 8 housing 
project to elect to provide preferences to elderly families in 
selecting tenants for available units in the project, subject to 
certain statutory requirements. (The 1992 Act defines elderly families 
to mean families whose heads, spouses or sole members are persons 62 
years of age or older (``seniors'').) An owner of a covered Section 8 
project who elects to provide preferences to elderly families also must 
reserve a percentage of units, not to be less than the percentage 
determined according to a formula set out in the statute, for disabled 
families who are not elderly or near-elderly. Subtitle D provides that 
a covered Section 8 housing project is one that is originally designed 
primarily for occupancy by seniors.


On May 3, l994, HUD published an interim rule that amended HUD's 
Section 8 regulations to provide for the system of occupancy 
preferences authorized by subtitle D. The interim rule adopts the 
statutory requirements without change. The rule supplements the 
statutory provisions by including a provision that describes the types 
of documents that an owner of a covered Section 8 project should 
produce to support a claim that the owner's project was originally 
designed primarily for occupancy by elderly families.


Development of the final rule will have the benefit of insights that 
will be gained at one or more informal consumer forums where staff from 
HUD's Multifamily Division will meet with residents of HUD-assisted 
housing who represent both elderly persons and nonelderly persons with 
disabilities. These forums will be held in early fall 1994.


Statement of Need:


The rule is needed to update HUD's Section 8 regulations to reflect the 
system of occupancy preferences authorized by subtitle D of the HCD Act 
of 1992, and to provide owners with examples of the types of documents 
that would support a claim that a Section 8 project was originally 
designed primarily for occupancy by elderly families.


Summary of the Legal Basis:


Section 686 of the HCD Act of 1992 authorizes the Secretary of HUD to 
issue such regulations as may be necessary to carry out the provisions 
of subtitles B through F of title VI of the HCD Act of 1992.


Alternatives:


Because of the controversial nature of permitting certain HUD-assisted 
assisted housing to give seniors a preference in occupancy, HUD 
determined that publication of a rule that invited public comment was 
necessary. The occupancy preference for elderly families authorized by 
subtitle D is anticipated to reduce, to some extent, housing for 
nonelderly persons with disabilities, which is of concern to persons 
with disabilities. Before enactment of the HCD Act of 1992, the 
definition of ``elderly persons'' in the Section 8 statute included 
persons with disabilities, regardless of age. The HCD Act of 1992 (1) 
amended the definition of ``elderly persons'' to have this term refer 
only to persons who are 62 years of age or older (``seniors''), and (2) 
provided a separate definition for persons with disabilities. Although 
the May 3, 1994, interim rule carefully follows the provisions of 
subtitle D, which are fairly prescriptive, the May 3, 1994, interim 
rule serves the purpose of assisting the public to more clearly 
identify the Section 8 projects that are eligible under subtitle D for 
the election of occupancy preference provided by that subtitle. Many 
projects that have Section 8 assistance are not ``covered'' Section 8 
housing and are not eligible, under subtitle D, for the election of 
preference for elderly families. Additionally, the May 3, 1994, interim 
rule serves the purpose of describing the types of documents that 
owners of covered projects should produce to support a claim that their 
projects were originally designed primarily for occupancy by seniors, 
and public comment may identify additional documents that should be 
considered and included in the rule.


Anticipated Costs and Benefits:


Costs: Before an owner can follow the preferences in the statute, s/he 
will incur costs to determine whether the project was originally 
designed primarily for the elderly. Once the owner has established 
documentation to support this, the owner must perform two surveys to 
determine the number of disabled persons that can be admitted to the 
project. Although the owner does not have to request HUD approval to 
use the statutory preference scheme, the owner may be called upon to 
defend his or her decisions, either by HUD through its monitoring and 
enforcement functions or by an applicant who has filed a complaint 
under the HCD Act of 1992, the Fair Housing Act, or any other 
applicable law.


Benefits: The implementing regulation, by clearly defining eligibility 
requirements, will serve to reduce HUD staff resources needed to 
evaluate claims of discrimination and to reduce owners' legal expenses 
to defend their admissions policies. The implementing regulation will 
establish a base number of units that can be made available to 
nonelderly disabled persons in certain elderly projects. This will 
serve as a distinct resource of much needed housing for the disabled.


Risks:


The failure to proceed with a final rule may leave owners of covered 
Section 8 projects at risk concerning acceptable evidence to support a 
claim that a project was originally designed primarily for occupancy by 
elderly persons (seniors). Although the statute identifies that covered 
Section 8 projects are those originally designed primarily for 
occupancy by seniors, the statute does not explain how an owner can 
prove that the owner's project was originally designed primarily for 
occupancy by seniors.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Interim Final Ru59 FR 22916                                    05/03/94
Interim Final Rule Effective Date                              06/02/94
Interim Final Rule Comment Period End                          07/05/94
Final Action                                                   10/00/94
Small Entities Affected:


None


Government Levels Affected:


None


Additional Information:


Interim Final Rule Effective date: June 2, 1994 through May 3, 1995.


Agency Contact:
Albert Sullivan
Director, Office Housing Management
Department of Housing and Urban Development
Office of Housing
202 708-3730
RIN: 2502-AG05
_______________________________________________________________________
HUD--OH
71. RESPA REVISIONS (FR-3638)
Legal Authority:


 12 USC 2601


CFR Citation:


 24 CFR 3500


Legal Deadline:


None


Abstract:


The requirements of the Real Estate Settlement Procedures Act (RESPA) 
apply to federally related mortgage loans. The Department's regulatory 
authority under the RESPA is directed toward reducing unnecessarily 
high settlement costs for homebuyers. In part, HUD's regulations 
protect homebuyers by requiring advance estimates of settlement costs, 
establishing limits on escrow accounts, and prohibiting referral fees 
and kickbacks. On November 2, 1992, the Department published a final 
rule amending the regulations on RESPA to address new statutory 
provisions. Included in the 1992 rule were provisions that allowed 
employer-employee payments for referrals of customers to entities that 
provided settlement services and, in certain situations, might have 
encouraged steering through the use of a computer loan origination 
(CLO) operation. Serious objections have been raised to both 
provisions. As a result, the Department has reviewed these provisions 
in the 1992 rule and has proposed modifications on both referral fees 
and CLOs. The modifications were contained in a proposed rule published 
on July 21, 1994 (59 FR 37360).


This rule promotes the use of interactive electronic technology. In 
September 1994, the Department sponsored a demonstration of this 
technology for use in computer loan origination. The purposes of this 
demonstration were to provide owners and operators of CLOs with an 
opportunity to demonstrate or discuss the operation and benefits of 
their systems and the impact of the proposed rule on their systems, and 
to provide consumer groups, industry organizations, and members of the 
public with an opportunity to witness such presentations or 
demonstrations. Information gained by the Department from the 
Technology Demonstration may be used in developing a final rule.


In addition, the Department conducted an electronic conference on the 
rule from August 19, 1994, through September 30, 1994. The electronic 
conference, called CLOnet, was another tool for interested persons to 
exchange information and ideas on the CLO aspects of the proposed rule. 
The electronic conference was for discussion only; it was intended to 
provide industry and individual users who accessed the conference an 
opportunity to discuss and debate with one another, through a computer 
network, the CLO aspects of the proposed rule.


The Department used this opportunity as a trial for supplementing its 
existing FHAnet electronic conference with the subject-specific CLOnet. 
Such conferences can provide an interactive method for the public to 
``meet'' on and discuss relevant matters.


Statement of Need:


Because of the controversy associated with the 1992 rule and a 
perception of the rule as an anticonsumer regulation, the Department 
has determined that revisions to the 1992 rule are necessary. The new 
Administration committed to a complete review of the issues and held a 
public hearing and solicited additional comments on provisions of the 
1992 rule relating to employer-employee exempted payments, computer 
loan origination, preemption of State regulations, and controlled 
business arrangements. The Secretary has articulated three principles 
to guide the Department's review of the issues:


1. HUD's responsibility is to protect the consumer;


2. HUD should regulate multibillion dollar industries responsibly; and


3. Technological and business arrangement innovations have the 
potential to provide significant consumer benefits.


Summary of the Legal Basis:


Real Estate Settlement Procedures Act, 12 USC 2601 et seq.


Alternatives:


The Department received considerable negative comment as a result of 
the publication of the 1992 rule. To assure adequate opportunity for 
public comment on the issues, in July 1993 the Department invited 
additional public comment and published notice of a public hearing on 
the issues. Over 1,500 comments were received in response to this 
notice, and over 3 dozen individuals made presentations at the informal 
hearing held on August 6, 1993. The alternatives proposed in the 
comments and public hearing were considered in drafting the July 21, 
1994, proposed rule. The preamble of that proposed rule (59 FR 37360) 
provides detailed summaries of the issues and alternatives proposed.


Anticipated Costs and Benefits:


Costs: Firms engaging in practices prohibited under the new regulation 
will incur costs to implement changes in procedures to bring business 
practices into compliance.


Benefits: The rule will benefit consumers by reducing the cost of 
mortgage financing. Allowing controlled business arrangements has the 
potential to benefit consumers from increased convenience of one-stop 
shopping. Lower prices could also result from increased ease of 
comparison shopping and cost savings, especially lower marketing costs, 
that could be passed to consumers. The elimination of the employer-pay-
employee exception is intended to eliminate referrals tainted by 
conflict of interest. Computerized loan originations could lower the 
search costs involved in shopping for a mortgage loan by putting many 
lenders in front of the consumer at once.


Risks:


The steering of consumers to certain service providers, through either 
personal referrals or a limited computerized list of options, may 
result in higher settlement costs to the consumer (because of a higher 
interest rate or more points charged on a mortgage, higher title 
insurance premiums, etc.) or less advantageous selection of various 
settlement services.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 37360                                    07/21/94
NPRM Comment Period End                                        09/19/94
Final Action                                                   03/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


Federal


Agency Contact:
Sarah Rosen
Special Assistant to the Assistant Secretary for Housing--FHC
Department of Housing and Urban Development
Office of Housing
202 708-3600
RIN: 2502-AG26
_______________________________________________________________________
HUD--Office of Community Planning and Development (CPD)
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
72. EMPOWERMENT ZONES (FR-3580)
Legal Authority:


 26 USC 1391


CFR Citation:


 24 CFR 597


Legal Deadline:


None


Abstract:


In August 1933 a new program was enacted to establish Federal 
empowerment zones and enterprise communities, with the Secretary of HUD 
responsible for designating urban areas and the Secretary of 
Agriculture responsible for rural areas. The purpose of this new 
program (the Empowerment Zones program) is to help distressed 
communities and their residents to implement strategic plans to create 
job opportunities and sustainable community development. The program 
combines tax benefits with substantial investment of Federal resources 
and enhanced coordination among Federal agencies. The program is 
designed to empower people and communities across the nation by having 
them identify their own needs and goals and giving them access to 
government resources at all levels to address their needs and 
revitalize their poorest neighborhoods.


Interim rules implementing this program were published by HUD and 
Agriculture on January 18, 1994, and these rules were used as the basis 
for inviting applications for nominations of Empowerment Zones and 
Enterprise Communities (see Notices of same date in  Federal Register), 
and will be used for making designation decisions in the fall of 1994. 
The two Departments worked together to develop these rules so that 
similar procedures and policies would be used for the designation of 
urban and rural zones and communities. Following publication of the 
rules and the notices inviting applications, both HUD and Agriculture 
held a series of informational sessions throughout the country to 
disseminate information and answer questions about the Empowerment 
Zones Program. The application period to submit nominations for urban 
and rural designations expired on June 30, 1994, and applications 
received are being reviewed by an interagency Federal Task Force.


The urban and rural designations to be made under the Empowerment Zones 
Program are part of a major governmentwide effort to assist distressed 
communities. This unique interagency effort is being carried out under 
the oversight of the Community Enterprise Board, created by the 
President and chaired by the Vice President. This Board is composed of 
seventeen Cabinet Secretaries, Assistants to the President and 
Administrators.


The Empowerment Zones program is a key step in rebuilding communities 
in America's poverty-stricken inner cities and rural heartland. To 
ensure its success, the Federal Government will take steps to 
coordinate Federal Assistance in support of designated areas including 
expedited processing, priority funding, and assisting designated areas 
in overcoming any programmatic regulatory and statutory impediments.


Statement of Need:


This final rule will supersede an interim rule published January 18, 
1994, to implement that portion of Subchapter C, part I, of Title XIII 
of the Omnibus Budget Reconciliation Act of 1993 dealing with the 
designation of urban Empowerment Zones and Enterprise Communities. The 
final rule will be prepared in conjunction with the Department of 
Agriculture and the President's Community Enterprise Board.


Summary of the Legal Basis:


The statute did not explicitly require HUD to issue regulations for the 
designation of Empowerment Zones and Enterprise Communities. However, 
because the designation process involves a national competition and 
will determine which communities will receive significant Federal 
resources and benefits, the Department published an interim rule.


Alternatives:


There has been widespread interest in this program on the part of local 
governments and community organizations throughout the country for many 
years. By the time the legislation was enacted, many cities had plans 
to apply for designation even though the number of designations allowed 
by the statute is limited. Because of the high level of interest and 
the high degree of competitiveness, it was decided that the program 
requirements and procedures should be published for all potentially 
eligible applicants to see.


Anticipated Costs and Benefits:


Those communities selected will reap the benefits of higher employment, 
increased business formation, and accelerated economic revitalization 
engendered by the package of fiscal and regulatory incentives offered 
by the program. For those not selected, HUD believes that the steps 
communities have gone through to develop comprehensive strategic plans 
as part of the nomination process will be extremely useful for 
furthering local revitalization efforts. To the extent jobs and 
economic activity are simply moved among selected and nonselected 
communities, such movements are transfers. Any net new job and business 
creation is, however, a benefit.


Risks:


Without the interim rule, all potential applicants may not have known 
the program requirements and procedures and would not have been able to 
prepare responsive applications.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Interim Final Ru59 FR 2700                                     01/18/94
Interim Final Ru59 FR 2700ve Date                              02/17/94
Interim Final Rule Comment Period End                          02/18/94
Final Action                                                   01/00/95
Small Entities Affected:


None


Government Levels Affected:


State, Local, Federal


Additional Information:


Effective date: Feb. 17, 1994 through Feb. 18, 1995


Agency Contact:
Michael Savage
Deputy Director, Office of Economic Development
Department of Housing and Urban Development
Office of Community Planning and Development
202 708-2290
RIN: 2506-AB65
_______________________________________________________________________
HUD--Government National Mortgage Association (GNMA)
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
73. GNMA MULTICLASS SECURITIES PROGRAM (FR-3554)
Legal Authority:


 42 USC 3535(d)


CFR Citation:


 24 CFR 395


Legal Deadline:


None


Abstract:


This rule will form the basis of the program governing GNMA Multiclass 
Securities. Investors will invest in these new securities, increasing 
demand for federally insured or guaranteed mortgages. This in turn will 
reduce financing costs for these mortgages to home purchasers. Under 
the program, GNMA will guarantee various types of multiclass 
securities, including Real Estate Mortgage Investment Conduits 
(``REMICs'') and grantor trust securities that are not REMICs. The 
purpose of expanding the GNMA program to include the guaranty of 
multiclass securities is to increase demand for FHA-insured, VA- or 
FmHA-guaranteed mortgages in order to reduce financing costs in 
connection with these mortgages and to raise revenues. This program is 
authorized under GNMA's enabling legislation found at 12 USC 1716 et 
seq., as amended by the Omnibus Budget Reconciliation Act of 1993, 107 
Stat. 339.


In order to create a multiclass securities program that is responsive 
to and accepted by the investment community, GNMA has made it a 
priority to consult with the Wall Street professionals who will be 
trading, marketing and structuring the GNMA multiclass securities. 
These meetings were formally held with the initial group of 
participants and informally held with other investment professionals 
active in the multiclass market.


Statement of Need:


The GNMA Multiclass Securities Program will allow participants to pool 
GNMA single class mortgage-backed securities into multiclass securities 
which can be specifically designed to meet various investors' needs. 
The added demand for GNMA securities will help lower interest rates for 
homebuyers with federally-insured or guaranteed mortgages and thus may 
help to further reduce homelessness. These Multiclass Securities, 
REMICs and non-REMIC grantor trust securities, offer a wide variety of 
investment opportunities to investors from institutions such as 
insurance companies and banks to individual investors. The programs to 
be offered to investors will be flexible, allowing investors the option 
of working with investment bankers to seek to fill the investment need 
which the particular investors may have. The overall goal of the 
program is for GNMA to guaranty multiclass securities, which will 
increase investment demand for federally insured or guaranteed 
mortgages and produce guaranty fee income for the Government.


Summary of the Legal Basis:


Section 306(g) of the National Housing Act, 12 USC 1721, as amended by 
the Omnibus Budget Reconciliation Act of 1993.


Alternatives:


The program by its nature has flexibility in the formation of 
securities to allow the securities to be custom tailored to the needs 
of particular investors. The program, in short, has a built-in market 
mechanism to allow flexibility for the investment community. In 
addition, these types of securities have been used as investment 
mechanisms by numerous other secondary market companies including FNMA, 
FHLMC and other private companies.


Anticipated Costs and Benefits:


The program anticipates generating net earnings of $146 million 
annually for GNMA and the Department. First time homebuyers and other 
low- to moderate-income borrowers will likely have lower financing 
costs for their FHA, VA and FMHA loans. This will increase the national 
homeownership rate.


Risks:


If the rule is not timely published, GNMA will not have authority to 
guaranty Multiclass Securities after May 25, 1995. This would be very 
detrimental to GNMA and the secondary market. Investors could not buy 
GNMA-backed Multiclass Securities, thereby reducing investment interest 
in FHA-insured and VA- or FmHA guaranteed loans. This in turn could 
cause an increase in borrowing costs to borrowers in FHA-insured or VA 
and FmHA-guaranteed home loan programs.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Final Action                                                   04/00/95
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Guy S. Wilson
Vice President of Mortgage-Backed Securities
Department of Housing and Urban Development
Government National Mortgage Association
202 401-8970
RIN: 2503-AA10
_______________________________________________________________________
HUD--Office of Fair Housing and Equal Opportunity (FHEO)
            ___________________________________________________________
PRERULE STAGE
            ___________________________________________________________
74.  PROPERTY INSURANCE (FR-3755)
Legal Authority:


 42 USC 3600 to 3619


CFR Citation:


 24 CFR 100


Legal Deadline:


None


Abstract:


Title VIII of the Civil Rights Act of 1968 made it unlawful to 
discriminate in any aspect relating to the sale, rental or financing of 
dwellings or in the provision of brokerage services or facilities in 
connection with the sale or rental of a dwelling because of race, 
color, religion, sex or national origin. The Fair Housing Amendments 
Act of 1988 was enacted to strengthen the administrative enforcement 
provision of Title VIII, to add prohibitions against discrimination in 
housing on the basis of disability and familial status, and to provide 
for the award of monetary damages where discriminatory housing 
practices are found. (Title VIII, as amended by the Fair Housing 
Amendments Act of 1988, is referred to as the Fair Housing Act.)


HUD published its regulations implementing the Fair Housing Act on 
January 23, 1989. In furtherance of its responsibility to enforce the 
nondiscrimination requirements of the Fair Housing Act, this rule will 
address the issue of nondiscrimination in property insurance practices. 
HUD's current Fair Housing Act regulations provide that discriminatory 
practices include ``refusing to provide municipal services or property 
or hazard insurance for dwellings, or providing such services or 
insurance differently because of race, color, religion, sex, handicap, 
familial status, or national origin.'' To assure that protected classes 
have fair access to property insurance, HUD determined that regulations 
specifically directed to the issue or discriminatory property insurance 
practices are necessary. Additionally, Executive Order 12892, entitled 
``Leadership and Coordination of Fair Housing in Federal Programs: 
Affirmatively Furthering Fair Housing'' signed by the President Clinton 
on January 17, 1994 directs the Secretary of HUD to promulgate 
regulations on the subjects of mortgage lending discrimination and 
property insurance discrimination.


To ensure broad public participation in the development of regulations 
on discriminatory property insurance practices, HUD published an 
advance notice of proposed rulemaking on August 16, 1994. The August 
16, 1994, notice announced HUD's intention to publish regulations on 
this subject, and solicited public comment on specific issues outlined 
in the notice and on such other issues as the public sought to be 
addressed by this rule. In the August 16, 1994, notice, HUD also 
announced that it will work closely with insurance companies, trade 
associations, State regulators, civil rights groups and community 
organizations to ensure that HUD hears as many viewpoints as possible 
on the subject of property insurance practices. Additionally, on July 
21, 1994, HUD published a notice announcing a schedule of public 
meetings that would be held across the country to discuss the issue of 
discriminatory and nondiscriminatory property insurance practices. The 
July 21, 1994 notice provides for the following public meetings: August 
18, 1994, Chicago, IL; September 22, 1994, in San Francisco, CA; 
October 18, 1994, in Atlanta, GA; and October 27, 1994, in Boston, MA.


Statement of Need:


Regulations on the subject of nondiscrimination in property insurance 
are needed to provide guidance to the property insurance industry on 
what constitutes discriminatory property insurance practice, and to 
improve the effectiveness of HUD's enforcement through issuance of a 
regulation that sets forth those policies and practices in the 
provision of property insurance that constitute violations of the Fair 
Housing Act. Additionally, this regulation assists the Secretary of HUD 
in carrying out the Secretary's obligation to affirmatively further 
fair housing, as mandated by the Fair Housing Act.


Summary of the Legal Basis:


The Fair Housing Act prohibits discrimination in the provision of 
property insurance on the basis of race, color, national origin, 
religion, sex, familial status and disability.


Alternatives:


Executive Order 12892, entitled ``Leadership and Coordination of Fair 
Housing in Federal Programs: Affirmatively Furthering Fair Housing'' 
signed by President Clinton on January 17, 1994, directs the Secretary 
of HUD to promulgate regulations on property insurance discrimination.


Anticipated Costs and Benefits:


Costs: Additional HUD staffing, travel and consultant costs are 
associated with preparation and administration of the rule. Property 
insurers will be encouraged to eliminate certain practices and adopt 
others which, in some cases, may involve a cost.


Benefits: Regulatory guidance to property insurers and more effective 
enforcement by HUD will provide greater access to property insurance 
for protected classes resulting in greater access to mortgage credit 
and increased homeownership.


Risks:


Failure to issue a regulation establishing nondiscrimination standards 
in property insurance practices will result in less effective 
enforcement by HUD, the rights or protected classes will continue to be 
violated at present levels, and homeownership opportunities will be 
deprived or reduced for protected-class members.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
ANPRM           59 FR 41995                                    08/16/94
ANPRM Comment Period End                                       10/17/94
NPRM                                                           09/00/95
Final Action                                                   07/00/96
Small Entities Affected:


None


Government Levels Affected:


State, Federal


Agency Contact:
Peter Kaplan
Director, Office of Regulatory Initiatives and Federal Coordination
Department of Housing and Urban Development
Office of Fair Housing and Equal Opportunity
202 708-2904
RIN: 2529-AA73
_______________________________________________________________________
HUD--FHEO
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
75. DEFINITION OF ``SIGNIFICANT FACILITIES AND SERVICES'' (FR-3502)
Legal Authority:


 42 USC 5301


CFR Citation:


 24 CFR 100


Legal Deadline:


 NPRM, Statutory, April 28, 1993.


Abstract:


The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as 
amended by the Fair Housing Amendments Act of 1988) exempts ``housing 
for older persons'' from the Fair Housing Act's prohibition against 
discrimination on the basis of familial status. The purpose of the 
prohibition against discrimination on the basis of familial status and 
the ``housing for older persons'' exemption is to protect families with 
children from discrimination in housing without unfairly limiting 
housing choices for elderly persons. In enacting the Fair Housing Act, 
the Congress mandated that, in determining whether housing qualifies as 
housing for older persons 55 years of age or older, the Secretary of 
HUD develop regulations which include the following factor, among 
others: the existence of significant facilities and services 
specifically designed to meet the physical or social needs of older 
persons.


Section 919 of the Housing and Community Development Act of 1992 
instructs the Secretary of HUD to make rules defining what are 
significant facilities and services specifically designed to meet the 
physical and social needs of older persons. On July 7, 1994, HUD 
published a proposed rule that expounds upon the significant facilities 
and services requirements governing ``55 or over housing.'' The July 7, 
1994, proposed rule strives to provide as much certainty as possible 
regarding the determination whether housing qualified as housing for 
older persons, but avoids a single, precise, mathematical-like 
standard, which given the variety of housing facilities and range of 
services is not possible or equitable. The rule attempts to provide a 
flexible standard that reflects regional variations in services and 
facilities which distinguish housing for older persons from other 
housing in the area, and takes into consideration variations determined 
by the geography of the site or by the differences in the nature or 
cost of the housing in question.


To ensure broad public participation and input in this rulemaking 
process, the proposed rule provides for a 90-day public comment period. 
Additionally, the Assistant Secretary for Fair Housing and Equal 
Opportunity scheduled four public meetings across the country to 
solicit additional comment on this rule. The schedule of meetings is as 
follows: August 15, 1994, Fontana, CA; August 25, 1994, Tampa, FL; 
September 29, 1994, Phoenix, AZ; and October 6, 1994, Washington, DC. 
Through this extended opportunity for public comment, the Department 
seeks to identify as many factors as possible that clearly distinguish 
housing for older persons (housing intended for and operated as housing 
for older persons) from other housing, and to allow affected groups to 
voice their concerns and questions on the exemption provided for ``55 
or over'' housing.


Statement of Need:


Housing providers, elderly persons, and families with children need to 
be able to ascertain with confidence whether a housing facility 
qualifies as housing for older persons under the Fair Housing Act. 
Clearly defined standards serve to protect all three groups. Clearly 
defined standards will help prevent housing providers from violating 
Fair Housing Act requirements and will help to avoid the limitation of 
housing options for both elderly persons and families with children.


Summary of the Legal Basis:


The Fair Housing Act prohibits discrimination against families with 
children under 18 but allows an exception for housing for older 
persons.


Alternatives:


Section 919 of the Housing and Community Development Act of 1992 
requires the Secretary of HUD to issue regulations that define 
``significant facilities specifically designed to meet the physical or 
social needs of older persons.''


Anticipated Costs and Benefits:


Costs: Providers of housing for older persons claiming the exemption 
may incur costs in establishing that their property has significant 
facilities and services as set forth in the proposed guidelines


Benefits: The clarification provided by the proposed rule will enable 
housing providers to clearly establish their exemption status. The 
result will be a reduction in inappropriate denials of housing to 
families with children.


Risks:


Without clearly defined standards, housing providers that claim the 
exemption would be at much greater risk of being found in noncompliance 
with Fair Housing Act requirements as a result of a HUD investigation 
of a complaint. There also would be increased risk of intentional or 
inadvertent instances of inappropriate denial of housing opportunities 
to families.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 34902                                    07/07/94
NPRM Comment Period End                                        10/05/94
Final Action                                                   02/00/95
Small Entities Affected:


Businesses, Governmental Jurisdictions, Organizations


Government Levels Affected:


State, Local, Federal


Agency Contact:
Peter Kaplan
Director, Office of Regulatory Initiatives and Federal Coordination
Department of Housing and Urban Development
Office of Fair Housing and Equal Opportunity
202 708-2904
RIN: 2529-AA66
_______________________________________________________________________
HUD--FHEO
76. DISPARATE IMPACT RULE (FR-3534)
Legal Authority:


 42 USC 3600 to 3619


CFR Citation:


 24 CFR 100


Legal Deadline:


None


Abstract:


This rule will describe those policies and practices in real estate-
related transactions which, while neutral on their face, may, in some 
circumstances, violate the Fair Housing Act because they have a 
disparate impact upon protected classes. It will also describe the 
standards required to demonstrate business necessity and the absence of 
alternatives with a less discriminatory impact.


Following the innovation introduced recently with the significant 
facilities and services rule, this rule will have an appendix 
containing extensive examples of fact patterns and the circumstances in 
which there may be violations of the Act.


Statement of Need:


To promote compliance by the real estate industry and assist HUD 
investigators by setting forth the standards to be applied in 
determining whether a violation of the Fair Housing Act has occurred or 
is about to occur as a result of business practices which, while 
neutral on their face, have a disparate impact on protected classes.


Summary of the Legal Basis:


The Fair Housing Act prohibits discrimination on the basis of race, 
color, national origin, sex, religion, familial status or disability.


Alternatives:


Rely on Administrative Law Judge and court decisions on a case-by-case 
basis for providing guidance to the real estate industry and HUD 
investigators.


Anticipated Costs and Benefits:


Costs: Firms in the real estate transactions industry will incur costs 
to develop and implement practices to avoid violating the Act according 
to the guidelines may be higher in the rule. Operating costs under 
these new practices may be higher or lower than previous practices.


Benefits: Clearer and more rapid adjudication cases of discrimination 
in real estate transactions. A reduced incidence of discrimination in 
real estate transactions as firms conform business practices to the new 
guidelines. Better housing and labor market outcomes for protected 
classes.


Risks:


The real estate industry is at risk of substantial penalties for even 
unintentional violations of the Fair Housing Act without being able to 
self-regulate using the guidance this regulation will provide.


Without this regulation, detecting and proving disparate impact will 
continue to be very difficult and victims will continue to suffer 
higher than necessary levels of discrimination.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           10/00/94
Final Action                                                   03/00/95
Small Entities Affected:


None


Government Levels Affected:


State, Local, Federal


Agency Contact:
Peter Kaplan
Director, Office of Regulatory Initiatives and Federal Coordination
Department of Housing and Urban Development
Office of Fair Housing and Equal Opportunity
202 708-2904
RIN: 2529-AA67
_______________________________________________________________________
HUD--FHEO
77.  NONDISCRIMINATION IN MORTGAGE LENDING UNDER THE FAIR 
HOUSING ACT (FR-3732)
Legal Authority:


 42 USC 3600 to 3619


CFR Citation:


 24 CFR 100


Legal Deadline:


None


Abstract:


This rule is similar to HUD's rule on Discrimination in Property 
Insurance under the Fair Housing Act, which is discussed elsewhere in 
Regulatory Plan entry 2529-AA73 but will address the subject of 
discrimination in mortgage lending under the Fair Housing Act. The Fair 
Housing Act makes it unlawful to discriminate, among other things, in 
the financing of dwellings on the basis of race, color, religion, sex, 
national origin, disability, or familial status. (Title VIII of the 
Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act 
of 1988, is referred to as the Fair Housing Act.)


To ensure that the protected classes have fair access to mortgage 
credit, this rule will identify and describe policies and practices in 
the mortgage lending industry which may be violations of the Fair 
Housing Act. It will implement those provisions of the Fair Housing Act 
that prohibit discrimination in the making of real estate-related loans 
and other financial assistance. Additionally, Executive Order 12892, 
entitled ``Leadership and Coordination of Fair Housing in Federal 
Programs: Affirmatively Furthering Fair Housing'' signed by President 
Clinton on January 17, 1994, directs the Secretary of HUD to promulgate 
regulations on the subjects of mortgage lending discrimination and 
property insurance discrimination.


To ensure broad public participation in the development of regulations 
on nondiscrimination in lending practices, HUD intends to conduct four 
public meetings in Federal Fiscal Year 1995 on this subject, and to 
solicit public comment that will be taken into consideration in 
development of the proposed rule.


Statement of Need:


The regulation is needed to implement those provisions of the Fair 
Housing Act that prohibit discrimination in the making of mortgage 
loans and other real estate-related financial assistance. It is also 
needed to provide guidance to the real estate industry on what 
constitutes a lending violation under the Fair Housing Act.


Summary of the Legal Basis:


The Fair Housing Act prohibits discrimination in the making of mortgage 
loans and other real estate-related financing on the basis of race, 
color, national origin, religion, sex, familial status and disability.


Alternatives:


Executive Order 12892, entitled ``Leadership and Coordination of Fair 
Housing in Federal Programs: Affirmatively Furthering Fair Housing'' 
signed by President Clinton on January 17, 1994, directs the Secretary 
of HUD to promulgate regulations on mortgage lending discrimination.


Anticipated Costs and Benefits:


Costs: Additional HUD staffing, travel and consultant costs are 
associated with preparation and administration on this rule. Mortgage 
lenders will be encouraged to eliminate certain practices and adopt 
others which, in some cases, involve a cost.


Regulatory guidance to mortgage lenders and more effective enforcement 
by HUD will result in greater access to mortgage credit for protected 
classes and increased homeownership.


Risks:


Failure to issue a regulation establishing nondiscrimination standards 
in lending practices will result in less effective enforcement by HUD, 
the rights of protected classes will continue to be violated at present 
levels, and homeownership opportunities will be deprived or reduced for 
protected class members.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           07/00/95
Final Action                                                   12/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


State, Local, Federal


Agency Contact:
Peter Kaplan
Director, Office of Regulatory Initiatives and Federal Coordination
Department of Housing and Urban Development
Office of Fair Housing and Equal Opportunity
202 708-2904
RIN: 2529-AA72
_______________________________________________________________________
HUD--FHEO
78. REQUIREMENTS FOR AFFIRMATIVELY FURTHERING FAIR HOUSING IN HUD'S 
HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS (FR-3565)
Legal Authority:


 42 USC 3600 to 3619


CFR Citation:


 24 CFR 150


Legal Deadline:


None


Abstract:


The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as 
amended by the Fair Housing Amendments Act of 1988) provides, within 
constitutional limitations, for fair housing throughout the United 
States and prohibits discrimination in the sale, rental, and financing 
of dwellings based on race, color, religion, sex, handicap, familial 
status or national origin. The Fair Housing Act places the 
responsibility for the administration and enforcement of fair housing 
upon the Secretary of HUD. The Fair Housing Act also places an 
affirmative obligation upon the Secretary of HUD to administer 
departmental programs and activities relating to housing and urban 
development in a manner to affirmatively further fair housing.


This rule (the AFFH rule) will amend HUD's program regulations (except 
community development) to require the recipients of HUD financial 
assistance and participants in HUD-administered mortgage/insurance 
programs (Housing, Public Housing, FHA, etc.) to affirmatively further 
fair housing. The AFFH rule will establish the policies, procedures and 
performance standards for HUD-funded entities to administer their 
housing program in a manner that affirmatively furthers fair housing, 
that is in a manner that ensures that the families that they serve have 
a choice of housing in their income range throughout a metropolitan 
area on a nondiscriminatory basis.


HUD also has under development a Fair Housing Plan rule that is 
discussed elsewhere in HUD's Regulatory Plan. The Fair Housing Plan 
rule covers only community development formula grant programs. In order 
for HUD to carry out its duty under the Fair Housing Act to administer 
HUD's other programs in a manner that affirmatively furthers fair 
housing, HUD proposes this separate stand-alone rule on affirmatively 
furthering fair housing.


The AFFH rule proposes to require that all HUD program participants/
recipients conduct an assessment of their policies, practices, 
procedures, and fair housing impact; determine which are barriers to 
fair housing choice or discriminatory housing practices, or which have 
a discriminatory impact on persons covered by the Fair Housing Act; 
eliminate these policies, practices, and/or procedures and replace them 
with nondiscriminatory alternatives or remove them completely if they 
have no valid business purpose; submit a plan which shows the 
corrective actions taken and a schedule for completion as a part of 
their initial program submission, at renewal of participation, or other 
appropriate point in the program process.


HUD will review the submission of the AFFH plan under the same 
principles set out in the Fair Housing Plan rule. HUD will monitor a 
recipient's performance remotely as well as on-site.


Statement of Need:


The Fair Housing Act specifically directs the Secretary of HUD to 
administer HUD's housing programs in a manner that affirmatively 
furthers fair housing. To date, recipients of HUD financial assistance 
and participants in HUD-administered mortgage/insurance programs have 
been subject to limited HUD requirements to affirmatively further fair 
housing, for example, through affirmative fair housing marketing 
requirements and site and neighborhood standards.


Additionally, several recipients of HUD financial assistance and 
participants in HUD-administered mortgage/insurance programs maintain 
policies, practices, and procedures which, although unintended, have a 
discriminatory result or constitute impediments to fair housing choice. 
These policies, practices and procedures frequently exclude persons 
covered by the Fair Housing Act from receiving the full benefits of 
these programs.


This rule will be a first step in ensuring that HUD's statutory duty to 
affirmatively further fair housing is carried out in an effective and 
enforceable manner by establishing uniform standards and guidelines and 
by requiring recipients to ensure they are complying with this duty by 
identifying policies, practices and procedures which affirmatively 
further or fail to affirmatively further fair housing, or are 
discriminatory housing practices.


Summary of the Legal Basis:


Section 808(e)(5) of the Fair Housing Act requires the Secretary of HUD 
to administer HUD programs in a manner which affirmatively furthers 
fair housing.


Alternatives:


Section 815 of the Fair Housing Act directs the Secretary to issue such 
rules to carry out the Act. Given the Secretary's obligation to 
administer HUD's housing programs in a manner that affirmatively 
furthers fair housing, it was determined that the most effective 
mechanism to ensure that this obligation is met is to amend, by 
rulemaking, HUD's programs to require HUD recipients to comply with 
this statutory duty. Establishing this requirement by regulation (as 
opposed to a notice or handbook) ensures compliance by State, and local 
governments and other HUD recipients. The rule will establish the 
procedures and standards by which HUD recipients can fulfill this duty 
to affirmatively further fair housing, and provide the public with the 
opportunity to comment before issuing this rule for effect.


Anticipated Costs and Benefits:


Costs: Many of the principles of affirmatively furthering fair housing 
are already contained in several HUD program regulations, notices, and 
handbooks, and it is anticipated that where HUD programs are already 
largely adhering to and implementing these principles, the 
administrative burden on recipients to ensure that they are in 
compliance with this Fair Housing Act requirement will be minimal. For 
other recipients, costs will be incurred in evaluating their current 
housing policies to ensure that the consequences of these policies do 
not result in limiting housing choice in a discriminatory manner.


Benefits: This rule is anticipated to expand housing choice for all 
persons, regardless of race, color, religion, sex or national origin, 
and concomitantly to reduce the number of segregated communities in the 
United States.


Risks:


Failure to publish this rule jeopardizes the housing options of persons 
protected by the Fair Housing Act, and weakens the ability of HUD and 
HUD's recipients to carry out the obligation imposed by the Fair 
Housing Act to affirmatively further fair housing in HUD's housing 
programs. This obligation requires clearly defined and enforceable 
standards so that, to the extent possible, all parties are aware of 
their rights and their obligations under the Act. The standards to be 
established by the AFFH rule will benefit housing authorities and 
project owners as much as they protect persons protected by the Fair 
Housing Act. Clearly defined standards will eliminate confusion and 
perhaps unnecessary litigation concerning whether a HUD recipient is in 
violation of its duty to affirmatively further fair housing.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
NPRM Comment Period End                                        03/00/95
Final Action                                                   04/00/95
Final Action Effective                                         07/00/95
Small Entities Affected:


None


Government Levels Affected:


State, Local


Agency Contact:
Laurence D. Pearl
Director, Program Standards & Evaluation
Department of Housing and Urban Development
Office of Fair Housing and Equal Opportunity
202 708-0288
RIN: 2529-AA69
_______________________________________________________________________
HUD--FHEO
79. FAIR HOUSING PLAN: AFFIRMATIVELY FURTHERING FAIR HOUSING IN 
COMMUNITY PLANNING AND DEVELOPMENT PROGRAMS (FR-3118)
Legal Authority:


 42 USC 3601 to 3619; 42 USC 5304(b); 42 USC 3535(d)


CFR Citation:


 24 CFR 570.904(c)


Legal Deadline:


None


Abstract:


This rule amends 24 CFR 570.904(c) to require recipients of HUD 
community development formula grants to develop a Fair Housing Plan 
(FHP). The principal components of the FHP are: an analysis of 
impediments to fair housing choice; a list of actions with measurable 
results to eliminate the identified impediments to fair housing choice 
(fair housing action plan); supporting documentation; and options of 
flexible site selection standards and metropolitan area-wide planning. 
Section 570.940(c) does not currently require a FHP, but it does 
emphasize the need for grantees to conduct an analysis of impediments 
(AI), which about 100 grantees of a universe of 800 have completed. 
Grantees which have not completed an AI on the date the rule is 
published in final form will have 9 months to do so.


The AI is described in the rule in detail. It is the undergirding for 
the fair housing action plan, which sets out the specific action 
required by the grantee to eliminate the discriminatory housing 
practices or impediments to choice identified by the AI. The AI can be 
conducted by the grantee, institutions of higher education, local 
public or private fair housing entities and real estate and lending 
industry groups, contractors, or any combination thereof. States and 
small community grantees are not required to do a full AI, as are 
entitlement communities.


The rule reiterates the availability of HUD community development 
formula grant funds for conducting the AI and formulating the fair 
housing action plan. Activities to eliminate discriminatory practices 
or impediments to choice which are eligible activities under the CDBG 
program and/or HOME can be funded through those programs.


This rule provides that HUD will review the jurisdiction's FHP to 
determine whether the AI is plainly inconsistent with known facts, the 
corrective actions are plainly inadequate given the facts, actions are 
not taken as described, or there is independent evidence indicating a 
violation of the Fair Housing Act. Any assurances given to HUD must 
have been satisfied.


To familiarize the public with this proposed rule, the Department will 
conduct, throughout the country, six symposia titled ``Fair Housing 
Planning in America,'' after the rule is published. The Department has 
already briefed and solicited input from various public interest groups 
(such as the National League of Cities and the Conference of Mayors) 
and participated in conferences sponsored by the Council of State 
Community Development Agencies and the National Community Development 
Association.


Statement of Need:


Many States and cities which receive HUD formula grant funds continue 
to have policies, practices and procedures which result in 
discriminatory housing practices in violation of the below cited laws. 
Some of these grantees are communities which have: illegally segregated 
public housing and/or neighborhoods; biased lending practices; 
restrictive covenants; exclusionary zoning; etc.


CDBG Entitlement/state grantees, HOME, ESG and HOPWA recipients are 
required to affirmatively further fair housing as a prerequisite to 
receiving HUD funds. This proposed rule provides clear guidance for 
fulfilling this mandate.


The rule gives a description of obligations of States and local 
governments for carrying out the mandate to affirmatively further fair 
housing through conducting the AI and implementing a fair housing 
action plan which addresses problems identified through the AI. Taken 
together, the AI and the fair housing action plan constitute the fair 
housing plan.


The fair housing plan is intended to implement the affirmatively 
furthering component of the Consolidated Plan Rule which combines 
application requirements of formula-driven CD programs.


The rule will provide guidance to HUD staff and grantees in connection 
with the requirement to affirmatively further fair housing.


Summary of the Legal Basis:


Fair Housing Act section 808(e)(5), sections 104(b)(2) and 106(d)(5)(B) 
of the Housing and Community Development Act of 1974, and Section 
105(b)(13) of the Cranston-Gonzalez National Affordable Housing Act 
require the HUD Secretary to administer all HUD programs in a manner 
which affirmatively furthers fair housing.


Alternatives:


Do not issue rule. This is unacceptable because grantees have requested 
guidance to clarify their legal obligation to affirmatively furthering 
fair housing in HUD programs, both in response to prior rulemakings 
involving the CDBG program and involving the Comprehensive Housing 
Affordability Strategies.


Issue notice or handbook. We explored this alternative and found the 
requirement will need a rule to assure compliance by State and local 
governments.


Anticipated Costs and Benefits:


Costs: Each recipient of HUD assistance will have to undertake 
different actions affirmatively furthering fair housing on a case-by-
case basis. Such action will result in varying costs.


Benefits: In keeping with the strong commitment by the Department to 
affirmatively furthering fair housing, the following benefits are 
anticipated: Regulatory clarity for entitlement recipients on their 
obligations to affirmatively further fair housing, significantly 
greater housing choice and opportunity for protected classes, and 
customized remedy for locally identified housing and related 
discriminatory practices.


Risks:


If this rule were not published, the requirement for the HUD Secretary 
to affirmatively further fair housing in the Department would not be 
sufficiently implemented. Illegal housing segregation, lack of fair 
housing choice, biased lending practices, restrictive covenants, 
exclusionary zoning, etc., in communities receiving community 
development assistance would be extremely difficult to identify and 
eradicate by the Federal Government alone given current resources.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           12/00/94
Small Entities Affected:


None


Government Levels Affected:


State, Local


Agency Contact:
Dudley Gregorie
Director, Program Standards Division
Department of Housing and Urban Development
Office of Fair Housing and Equal Opportunity
202 708-2288
RIN: 2529-AA54
_______________________________________________________________________
HUD--Office of Public and Indian Housing (PIH)
            ___________________________________________________________
PROPOSED RULE STAGE
            ___________________________________________________________
80. PUBLIC HOUSING DEVELOPMENT REGULATIONS (FR-3569)
Legal Authority:


 42 USC 1437c


CFR Citation:


 24 CFR 941


Legal Deadline:


None


Abstract:


This rule proposes to make comprehensive revisions to the regulations 
in 24 CFR part 941 that govern the public housing development program 
(including acquisition) to reflect HUD's proposal to totally redesign 
this program. The purpose of the program redesign is to simplify the 
public housing development process by giving public housing agencies 
(PHAs) and localities maximum flexibility in developing public housing 
in their communities. The revised procedures proposed by HUD will shift 
responsibilities for decisionmaking from HUD Headquarters to the Field 
Offices and to PHAs wherever possible; reassign responsibility for 
development activities to Field Office Public Housing Divisions, to 
ensure coordination between Headquarters and the field; reduce the 
number and depth of HUD reviews, and in the case of ``high performing'' 
PHAs, eliminate most HUD reviews of development activities; promote the 
development of units in mixed-income communities; and create HUD/PHA/
local government partnerships. HUD anticipates that the changes will 
reduce the public housing development time by 6 to 9 months, on 
average, and result in a concomitant reduction in the costs of 
development.


The proposed redesign of the public housing development process 
involved the participation of public housing agencies, housing industry 
organizations and other groups affected by the public housing 
development program. A series of informal meetings on the public 
housing development process was held by HUD beginning in the spring of 
1993. The comments received at these meetings will be reflected in the 
proposed rule to be published in February 1995.


Statement of Need:


The public housing development regulations in 24 CFR part 241 and 
Handbook (7417.1 REV-1) have not been substantively revised since 
October 1980, and, as a result do not take into consideration many of 
the statutory changes made to the program since 1980. In addition to 
the need to update the program regulations, there is a need to revise 
many of the existing regulations that have resulted in a time-consuming 
and burdensome development process. Under the existing regulations, 
PHAs are required to obtain HUD approval of each step in the 
development process before proceeding the next step. The result of this 
step-by-step approval process is a preconstruction pipeline that is 
estimated at approximately $2 billion and dates back to 1980. The 
failure to issue updated and simplified regulations would result in 
continuing inactivity in the inventory of development projects, leading 
to a deterioration in the housing authorities' ability to bring 
proposals to fruition due to escalations in cost, which in turn leads 
to a lack of sufficient decent, safe and sanitary housing for low-
income persons.


Summary of the Legal Basis:


The U.S. Housing Act of 1937 (USHA of 1937) is the authorizing 
legislation for the public housing development program. The USHA of 
1937 made changes to the public housing development program in 1981, 
1983, 1987, 1990, and 1992, plus incremental amendments were made in 
annual appropriations bills. As a result in particular of the 1987 and 
1990 amendments, there is a need to update processing standards and 
criteria to reflect current statutory requirements and to facilitate 
processing of proposed projects in a stagnated pipeline.


Alternatives:


HUD considered revising handbooks to address the many changes to the 
public housing development program in advance of issuance of revised 
regulations. However, handbook revision is not as open a process 
(involving public participation) as is rulemaking, and the handbook 
revisions would be limited to those that address statutory requirements 
that involved little no discretion for implementation on the part of 
HUD. The type of comprehensive revision contemplated by HUD to this 
program requires notice-and-comment rulemaking.


Anticipated Costs and Benefits:


Costs: Because the revised regulations are a refinement or improvement 
of existing procedures, and should result in few or no additional 
monitoring or reporting burdens, additional costs to PHAs or to HUD are 
negligible.


Benefits: A complete revision of the public housing development 
regulations will provide PHAs and HUD Field Offices with the maximum 
flexibility to develop public housing that is more oriented to the 
needs of the community, and will eliminate much of the ``red tape'' 
currently associated with the development process. The reduction of the 
burdensome requirements associated with the development process should 
result in reduced administrative costs and development costs of PHAs 
and an increase in the supply of affordable public housing units.


Risks:


Failure to change the regulations would result in continuing inactivity 
in the inventory of development projects, and a deterioration in the 
housing authorities' ability to bring proposals to fruition due to 
escalations in cost. Funds appropriated by the Congress to provide 
decent, safe, and sanitary housing for eligible families would continue 
to be underutilized.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           02/00/95
Final Action                                                   10/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


State, Local, Tribal


Agency Contact:
Janice D. Rattley
Director, Office of Construction
Rehabilitation, & Maintenance
Department of Housing and Urban Development
Office of Public and Indian Housing
202 708-1800
RIN: 2577-AB37
_______________________________________________________________________
HUD--PIH
            ___________________________________________________________
FINAL RULE STAGE
            ___________________________________________________________
81. PUBLIC HOUSING MANAGEMENT ASSESSMENT PROGRAM (PHMAP) (FR-2897)
Legal Authority:


 42 USC 3535(d); 42 USC 1437d(j)


CFR Citation:


 24 CFR 901


Legal Deadline:


None


Abstract:


This rule established the Public Housing Management Assessment Program 
(PHMAP) in accordance with Section 502 of the National Affordable 
Housing Act of 1990 (approved Nov. 28, 1990, PL 101-625, 104 Stat. 
4079). Section 502 requires HUD to assess the management performance of 
Public Housing Agencies (PHAs) in all major areas of management 
operations and to designate troubled and mod-troubled PHAs. PHMAP uses 
a maximum of 12 indicators, including seven specifically mandated by 
the statute and five other indicators deemed appropriate by HUD. A PHA 
designated troubled or mod-troubled is required to enter into a 
memorandum of agreement (MOA) with HUD that sets forth targets, 
strategies, incentives and sanctions for improving its management 
performance. In the event of a substantial default on an agreement, HUD 
may petition the appropriate State or Federal court of venue for the 
appointment of a receiver or make other management changes for the 
troubled PHA. HUD is also authorized to commend exemplary PHAs.


PHMAP is intended to foster a uniform, nationwide level of excellence 
in public housing.


Statement of Need:


There is a need to address the following issues concerning the current 
PHMAP regulation: PHMAP reporting and processing are time-consuming; 
information required from PHAs is not always submitted by HUD's 
deadline; PHA appeals of HUD decisions can extend the PHMAP process for 
months; there is a perception that the system tracks ``paper'' 
performance rather than ``actual'' performance; the scoring process 
results in redundant operations and excessive paperwork; and, a 1993 
Inspector General's report stated that the current rule and handbook 
lacked adequate guidelines, procedures and clarification for several 
key performance indicators. Rulemaking to address these issues will 
eliminate redundant and unnecessary procedures and paperwork, minimize 
the volume of PHMAP-related correspondence, and implement the IG's 
recommendation.


Summary of the Legal Basis:


Section 502 of the National Affordable Housing Act of 1990 requires HUD 
to establish procedures, under the rulemaking procedures of 5 U.S.C. 
553, for designating troubled public housing agencies.


Alternatives:


The Department has promised (in the preamble to the interim rule) that 
the PHMAP would be revised on a regular basis, as warranted. Three 
years of experience under existing regulations and procedures make the 
case that a revised rule is warranted at this time. The alternative of 
not publishing a regulatory revision is not viable, for reasons 
discussed in the Statement of Need above.


Anticipated Costs and Benefits:


Costs: Because the revised regulations are a refinement or improvement 
of existing procedures, and should result in few or no additional 
monitoring or reporting burdens, additional costs to PHAs or to HUD are 
negligible.


Benefits: By increasing the objectivity of the assessment program, 
making the assessment program more performance-oriented rather than 
simply compliance-oriented, and reducing certain redundant and 
unnecessary procedures and paperwork requirements, funding of public 
housing services can be better targeted and service better delivered to 
tenants.


Risks:


The revision of the PHMAP reduces the risk of misidentifying housing 
authorities' performance levels, resulting in inefficient or 
ineffective application of program funds and/or technical assistance. 
Refined procedures and clarifications are intended to assure that PHAs 
will be assessed equitably, and because PHAs use the PHMAP to conduct 
self-assessments, that all PHAs would be assessing themselves on the 
same basis.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            56 FR 15712                                    04/17/91
NPRM Comment Period End                                        06/17/91
Interim Final Ru57 FR 2160                                     01/17/92
Interim Final Rule Effective Date                              02/18/92
Interim Final Rule Comment Period End                          05/18/92
Final Action                                                   12/00/94
Small Entities Affected:


None


Government Levels Affected:


State, Local


Agency Contact:
MaryAnn Russ
Director, Office of Assisted Housing
Department of Housing and Urban Development
Office of Public and Indian Housing
202 708-1380
RIN: 2577-AA89
_______________________________________________________________________
HUD--PIH
82. INDIAN HOUSING PROGRAM; PROPOSED AMENDMENTS (FR-3646)
Legal Authority:


 42 USC 1437; 25 USC 450(e)


CFR Citation:


 24 CFR 950


Legal Deadline:


None


Abstract:


On August 1, 1994, HUD published a proposed rule that would make 
comprehensive amendments to the Indian Housing Consolidated Program 
regulations in 24 CFR part 905. The August l, 1994 proposed rule also 
would move the regulations from part 905 to 950. The purpose of the 
amendments is to simplify the Indian Housing Program processes, reduce 
the number of regulatory requirements, and provide more flexibility to 
local tribal officials and Indian housing authorities (IHAs) in their 
administration of Indian housing programs. The proposed amendments also 
would provide greater discretion and responsibility to tribal officials 
and IHAs in carrying out their housing programs, thereby returning them 
to local control.


The August 1, 1994 proposed rule is based on a series of consultation 
meetings with entities and individuals directly affected by the 
regulations in part 905. In September 1993, HUD's six Native American 
Program Field Offices began extensive consultation with IHAs and tribal 
officials about their experience with the administration and operation 
of Indian housing programs, and solicited comments on HUD's 
requirements for the program. In March 1994, a consultation session to 
discuss proposed changes to the Indian Housing Program was held in 
Washington, DC, with the Native American Indian Housing Council, eight 
regional IHA associations, Tribal leaders, as well as a number of 
representatives of the Native American housing community.


The comments received at the March 1994 consultation session, as well 
as the comments received from the September 1993 consultation process, 
constitute the basis of the program revisions contained in the August 
1, 1994, proposed rule. Following consideration of additional comments 
received on this rule, HUD will proceed to publish a final rule 
amending the Indian Housing Consolidated Program regulations. The 
revised Indian Housing Consolidated Program regulations represent a key 
step in revitalizing the Indian Housing Programs.


Statement of Need:


IHAs and Tribal officials have expressed to HUD, both during and before 
the consultation process, the need for significant revision to the 
existing Indian Housing Consolidated Program regulations. These 
officials advised that the existing regulations were overly burdensome, 
and impeded their ability to carry out housing programs for Native 
Americans in an effective manner. The amendments proposed to be made by 
the August 1, 1994, rule will reduce the administrative burden on IHAs 
and tribal officials and provide these officials and authorities with 
greater discretion in administering their housing programs.


Additionally, the revisions to 24 CFR part 905 respond to Executive 
Order 12866 (Regulatory Planning and Review) which directs each agency 
to, among other things, harmonize Federal regulatory actions with 
related State, local and tribal regulatory and other governmental 
functions, minimize regulatory burdens to the extent possible, and 
draft simple and easy-to-understand regulations.


Summary of the Legal Basis:


Title II of the United States Housing Act of 1937 provides for the 
establishment of the Indian Housing Program. The Indian Housing Program 
includes the rental, Mutual Help and Turnkey III Homeownership 
Opportunity Programs.


Alternatives:


In its consultation session with IHAs and Tribal Officials, HUD 
considered alternatives to amending the existing regulations. However, 
the provisions of part 905 constitute a complete statement of HUD 
regulations affecting the development and operation of Indian Housing. 
For part 905 to continue to constitute a complete statement of HUD 
regulations applicable to Indian housing, amendments to part 905 were 
necessary. Additionally, the type of comprehensive revision 
contemplated by HUD to this program require notice and comment 
rulemaking.


Anticipated Costs and Benefits:


Costs: Because the revised regulations are a refinement or improvement 
of existing procedures, and should result in few or no additional 
monitoring or reporting burdens, additional costs to IHAs or to HUD are 
negligible.


Benefits: The rule will provide IHAs with greater discretion and 
responsibility in carrying out their housing programs. IHAs will be 
able to make decisions based on the needs of their community so that 
IHA activity will better suit local needs.


Risks:


If the revised consolidated rule is not published in final, IHAs and 
tribal officials will continue to be subject to the existing 
regulations, and housing assistance to Native Americans could be 
delayed due to existing burdensome regulatory requirements.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            59 FR 39072                                    08/01/94
NPRM Comment Period End                                        09/30/94
Final Action                                                   02/00/95
Small Entities Affected:


Businesses


Government Levels Affected:


Local, Tribal


Agency Contact:
Dominic D. Nessi
Director, Office of Native American Programs
Department of Housing and Urban Development
Office of Public and Indian Housing
202 755-0032
RIN: 2577-AB43
BILLING CODE 4210-01-F