Affordable housing program operation: Program requirements clarification,
[Federal Register: January 4, 2000 (Volume 65, Number 2)]
[Rules and Regulations]
[Page 203-204]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ja00-3]
FEDERAL HOUSING FINANCE BOARD
12 CFR Part 960
[No. 99-68]
RIN 3069-AA82
Amendment of Affordable Housing Program Regulation
AGENCY: Federal Housing Finance Board.
ACTION: Final rule.
SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting as final, with no changes, the May 5, 1999 Interim Final Rule which amended its regulation governing the operation of the Affordable Housing Program (AHP or Program) to make certain technical revisions clarifying Program requirements and improving the operation of the AHP.
EFFECTIVE DATE: The final rule shall be effective on January 4, 2000.
FOR FURTHER INFORMATION CONTACT: Janet M. Fronckowiak, Acting Deputy Director, Program Assistance Division, Office of Policy, Research and Analysis, (202) 408-2575; or Sharon B. Like, Senior Attorney-Advisor, Office of General Counsel, (202) 408-2930, Federal Housing Finance Board, 1777 F Street, N.W., Washington, D.C. 20006.
SUPPLEMENTARY INFORMATION:
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Statutory and Regulatory Background
Section 10(j)(1) of the Federal Home Loan Bank Act (Bank Act) requires each Federal Home Loan Bank (Bank) to establish a Program to subsidize the interest rate on advances to members of the Federal Home Loan Bank System engaged in lending for long-term, low-and moderate- income, owner-occupied and affordable rental housing at subsidized interest rates. See 12 U.S.C. 1430(j)(1) (1994). The Finance Board is required to promulgate regulations governing the operation of the Program. See id.
On August 4, 1997, the Finance Board published a final AHP regulation adopting comprehensive revisions to the Program, see 12 CFR part 960, which, among other changes, authorized the 12 Banks, rather than the Finance Board, to approve applications for AHP subsidies beginning January 1, 1998. See 62 FR 41812 (Aug. 4, 1997). On May 20, 1998, the Finance Board published an Interim Final Rule amending the regulation to make certain technical revisions clarifying Program requirements and improving the operation of the AHP. See 63 FR 27668 (May 20, 1998). The Interim Final Rule was adopted as a final rule, with several changes, and became effective on June 1, 1999.
In the course of implementing the changes to the Program under the recent revisions to the AHP regulation, the Banks and Finance Board staff identified a number of additional technical issues whose resolution would clarify Program requirements and improve the effectiveness of the Program. Accordingly, on May 5, 1999, the Finance Board published another Interim Final Rule amending the AHP regulation, effective June 4, 1999, to address these additional issues. The May 5, 1999 Interim Final Rule provided for a 60-day comment period, which closed on July 6, 1999.
The Finance Board received one comment letter on the May 5, 1999 Interim Final Rule from a financial institutions trade association, which generally supported several provisions in the Interim Final Rule and noted one potential concern which is discussed below.
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Analysis of the Final Rule
Requirement for Independent Appraisals from State Certified or Licensed Appraisers for Member Real Estate Owned (REO) Properties and Properties Upon Which a Member Holds a Mortgage or Lien--Sec. 960.5(b)(2)(ii)(B)
The May 5, 1999 Interim Final Rule amended Sec. 960.5(b)(2)(ii)(B) of the AHP regulation to require that an independent appraisal of the AHP property be obtained within six months prior to the date the Bank disburses AHP subsidy to the project. The Interim
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Final Rule also amended this section to require that the independent appraisal be completed by a State certified or licensed appraiser, as defined in 12 CFR 564.2(j) and (k), in order to ensure a more accurate evaluation of the property value. The commenter generally supported these amendments, but noted that for projects valued at less than $250,000, the cost of such an appraisal may be burdensome in some cases.
The Finance Board believes that the AHP regulatory appraisal requirement generally would not impose an additional cost on AHP projects. First, it is likely that most projects, regardless of the value of the projects, would be required by at least one of their other funding sources to obtain an appraisal completed by a State certified or licensed appraiser. Second, the AHP regulation does not require that the appraisal be in narrative form, which should keep the cost of the appraisal down. Third, if an appraisal of the project by a State certified or licensed appraiser was completed prior to the six-month period preceding AHP funding, only an update or addendum to the original appraisal need be obtained, which should further limit costs to the project. Accordingly, no change has been made to the appraisal requirement in the final rule.
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Regulatory Flexibility Act
Because no notice of proposed rulemaking is required for this final rule, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply. Moreover, the final rule applies only to the Banks, which do not come within the meaning of ``small entities,'' as defined in the Regulatory Flexibility Act. See id. Sec. 601(6).
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Paperwork Reduction Act
This final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et seq. Therefore, the Finance Board has not submitted any information to the Office of Management and Budget for review.
Accordingly, under the authority of 12 U.S.C. 1430(j) (1994), the Interim Final Rule amending 12 CFR part 960, published at 64 FR 24025 (May 5, 1999), is adopted as final without changes.
Dated: December 20, 1999.
By the Board of Directors of the Federal Housing Finance Board. Bruce A. Morrison, Chairman.
[FR Doc. 00-37Filed1-3-00; 8:45 am]
BILLING CODE 6725-01-P
