73298 Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Proposed Rules 

1Long Term Impact Report: The HUD First Time 

Homebuyer Education and Counseling 

Demonstration, June 2021, p. 64, available at: 

https://www.huduser.gov/portal//portal/sites/ 

default/files/pdf/Long-Term-Impact-Report-HUDFirst-Time-Homebuyer-Education-CounselingDemonstration.pdf. 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 214 

[Docket No. FR–6388–P–01] 

RIN 2502–AJ70 

Modernizing the Delivery of Housing 

Counseling Services 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, Department of Housing 

and Urban Development (HUD). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

update HUD’s regulations that require 

participating agencies to provide inperson counseling to clients that prefer 

this format to reflect advances in 

technology, align with client 

engagement preferences, and preserve 

consumer protections. The proposed 

rule would amend HUD’s regulations to 

allow housing counseling agencies to 

use alternative communication 

methods, including virtual meeting 

tools, in lieu of providing in-person 

services. Participating agencies that 

choose not to provide in-person services 

would be required to refer clients to 

local providers that provide such 

services, when requested. 

DATES: Comment Due Date: December 

26, 2023. 

ADDRESSES: There are two methods for 

submitting public comments. All 

submissions must refer to the above 

docket number and title. 

1. Electronic Submission of 

Comments. Comments may be 

submitted electronically through the 

Federal eRulemaking Portal at 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt by HUD, and enables HUD to 

make comments immediately available 

to the public. Comments submitted 

electronically through 

www.regulations.gov can be viewed by 

other commenters and interested 

members of the public. Commenters 

should follow the instructions provided 

on that website to submit comments 

electronically. 

2. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street SW, Room 10276, 

Washington, DC 20410–0500. 

Note: To receive consideration as a public 

comment, comments must be submitted 

through one of the two methods specified 

above. 

Public Inspection of Public 

Comments. HUD will make all properly 

submitted comments and 

communications available for public 

inspection and copying during regular 

business hours at the above address. 

Due to security measures at the HUD 

Headquarters building, you must 

schedule an appointment in advance to 

review the public comments by calling 

the Regulations Division at 202–708– 

3055 (this is not a toll-free number). 

HUD welcomes and is prepared to 

receive calls from individuals who are 

deaf or hard of hearing, as well as 

individuals with speech or 

communication disabilities. To learn 

more about how to make an accessible 

telephone call, please visit https://

www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

Copies of all comments submitted are 

available for inspection and 

downloading at www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

David Valdez, Senior Housing Program 

Specialist, Department of Housing and 

Urban Development, 1331 Lamar St., 

Suite 550, Houston, TX 77002, 

telephone 713–718–3178 (this is not a 

toll-free number). HUD welcomes and is 

prepared to receive calls from 

individuals who are deaf or hard of 

hearing, as well as individuals with 

speech or communication disabilities. 

To learn more about how to make an 

accessible telephone call, please visit 

https://www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 106 of the Housing and Urban 

Development Act of 1968 (12 U.S.C. 

1701x) (Section 106) authorizes HUD’s 

Housing Counseling program. Section 

106(a)(1)(iii) authorizes HUD to provide 

or contract with organizations to 

provide ‘‘counseling and advice to 

tenants and homeowners with respect to 

property maintenance, financial 

management and such other matters as 

may be appropriate to assist them in 

improving their housing conditions and 

in meeting the responsibilities of 

homeownership.’’ Section 106(a)(2) 

authorizes HUD to provide counseling 

directly or to enter into contracts with, 

or make grants to, and provide other 

types of assistance to eligible private or 

public organizations (including 

grassroots, faith-based, and other 

community-based organizations) with 

special competence and knowledge in 

providing housing counseling to lowand moderate-income families. 

On September 28, 2007, HUD 

published a final rule titled, ‘‘Housing 

Counseling Program,’’ at 72 FR 55637, 

which established regulations for HUD’s 

Housing Counseling program, including 

24 CFR 214.103(l), which governs 

requirements for housing counseling 

facilities, and 24 CFR 214.300, which 

governs basic requirements for 

counseling services including the 

setting and format for their provision. 

HUD’s Housing Counseling program 

regulations have not been amended 

since they were established in the 2007 

final rule. 

Section 214.300(a)(3) requires 

agencies that provide housing 

counseling services to provide in-person 

counseling services at one of the 

agency’s facilities or an alternate 

location to clients that prefer that 

format. When this requirement was 

adopted, housing counseling and 

education were primarily conducted 

locally, and the conventional wisdom 

was that in-person service was the most 

effective service delivery method. In 

2020, due to ongoing public health 

concerns around the spread of 

Coronavirus Disease 2019 (COVID–19), 

a Temporary Partial Waiver of 24 CFR 

214.300(a)(3), In-Person Housing 

Counseling Requirement, was issued 

and remains in effect through December 

31, 2023. The waiver allows housing 

counseling agencies to utilize 

alternative methods to conduct housing 

counseling and education with clients 

in lieu of meeting in-person. Based on 

feedback received during meetings with 

stakeholders such as the Housing 

Counseling Federal Advisory 

Committee, HUD has determined that 

these alternative methods are more 

practical, cost-effective, and accessible, 

and have not led to adverse compliance 

issues or negative financial impacts. 

When the waiver expires, absent 

rulemaking to amend HUD’s 

regulations, participating agencies will 

continue to be required to provide inperson counseling services to clients. 

Today, fewer clients choose in-person 

counseling. Consumer preference has 

shifted toward alternative, virtual 

methods of service delivery as clients 

often view in-person delivery as 

inconvenient and more burdensome 

when considering costs like childcare 

and transportation necessary to attend.1


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Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Proposed Rules 73299 

2 Id. at p. 16. 

3 Id. at p. 86, footnote 86. 

4 Id. at p. 66. 

Almost two-thirds of research 

participants in a recent study conducted 

by HUD chose online education and 

telephonic counseling over in-person 

delivery.2 Even when clients express a 

preference for in-person services, they 

initiate those services at a lower rate 

than do people who prefer and 

subsequently take up remote services.3

Increasing virtual methods of delivery 

can increase accessibility for those who 

have difficulty accessing in-person 

services due to linguistic, physical, or 

other logistical barriers.4 Moreover, 

participating agencies that maintain 

multiple facilities incur greater burdens 

and costs even as demand for in-person 

counseling continues to decline. 

This proposed rule aims to modernize 

the current regulations to reflect 

advances in technology, to align with 

client engagement preferences, and to 

preserve consumer protections. The 

existing regulations also contain 

guardrails that will continue to mitigate 

the risk that some participating agencies 

may want to use virtual tools to expand 

their geographic scope but be unfamiliar 

with an area and its resources, thereby 

failing to provide quality counseling 

and services. Regulations will continue 

to require that participating agencies 

must have functioned for at least a year 

in the geographical area set forth in the 

work plan. Further, housing counselors 

must possess a working knowledge of 

state and local housing programs 

available in the community. These 

provisions ensure that participating 

agencies demonstrate knowledge and a 

connection to the community they 

serve, whether they choose to do so by 

providing virtual, in-person, or hybrid 

services. 

II. This Proposed Rule 

Currently, 24 CFR 214.300(a)(3) 

requires, among other things, 

participating agencies to provide inperson counseling to clients that prefer 

this format. HUD’s proposed rule would 

allow housing counseling agencies to 

use alternative communication 

methods, including virtual meeting 

tools, in lieu of providing in-person 

services. Participating agencies that 

choose not to provide in-person services 

will be required to refer clients to local 

providers that provide such services, 

when requested. 

HUD’s existing regulations at 

§ 214.103(l) require participating 

agencies to maintain facilities (i.e., 

physical office space) that have a clearly 

identified office, with space available 

for the provision of housing counseling 

services, and provide privacy for inperson counseling. The proposed rule 

would provide that the participating 

agencies may maintain one facility and 

may not provide in-person housing 

counseling. This would help to reduce 

the costs of providing in-person housing 

counseling, but would not modify the 

existing requirements that participating 

agencies possess knowledge of the local 

housing market, establish working 

relationships with private and public 

community resources, and have 

functioned for at least a year in the 

geographical areas set forth in the 

participating agencies’ work plans, all of 

which serve to demonstrate the agency 

maintains a sufficient community base. 

A paragraph-by-paragraph 

summarized explanation and 

description of the proposed changes to 

24 CFR part 214 are outlined 

immediately below. 

Proposed 24 CFR 214.103(l) 

HUD proposes to revise the language 

of paragraph (l), to modernize the 

requirements for maintaining a facility. 

HUD’s proposed paragraph (l) would 

provide that a participating agency 

maintain one or more facilities. All 

facilities must have an identified, 

private space available for the provision 

of counseling services, whether those 

services are in-person or virtual. 

Proposed 24 CFR 214.300(a)(3) 

HUD proposes to revise the language 

of § 214.300(a)(3) to modernize the way 

housing counseling agencies provide 

housing counseling services. Rather 

than requiring that counseling services 

take place in-person, under this 

proposal, they could take place at a 

facility or at an alternate location or 

could be done via telephone, or via 

collaborative online software. Paragraph 

(3) would specify that all housing 

counseling agencies that do not provide 

in-person counseling services must refer 

clients to agencies that provide inperson counseling services upon a 

client’s request. 

Proposed 24 CFR 214.300(a)(4) 

HUD proposes to add a new 

§ 214.300(a)(4) that provides crossreferences emphasizing that all housing 

counseling agencies must continue to 

meet requirements for approval as a 

counseling agency regardless of the 

setting or format of housing counseling 

services, including having functioned 

for at least one year in the geographical 

area(s) the agency identified in its 

housing counseling work plan, having 

sufficient resources to implement that 

proposed work plan, and being able to 

demonstrate knowledge of local housing 

markets and community resources. 

III. Findings and Certifications 

Regulatory Review—Executive Orders 

12866, 13563, and 14094 

Under Executive Order 12866 

(Regulatory Planning and Review), a 

determination must be made whether a 

regulatory action is significant and, 

therefore, subject to review by the Office 

of Management and Budget (OMB) in 

accordance with the requirements of the 

order. Executive Order 13563 

(Improving Regulations and Regulatory 

Review) directs executive agencies to 

analyze regulations that are ‘‘outmoded, 

ineffective, insufficient, or excessively 

burdensome, and to modify, streamline, 

expand, or repeal them in accordance 

with what has been learned. Executive 

Order 13563 also directs that, where 

relevant, feasible, and consistent with 

regulatory objectives, and to the extent 

permitted by law, agencies are to 

identify and consider regulatory 

approaches that reduce burdens and 

maintain flexibility and freedom of 

choice for the public. Executive Order 

14094 entitled ‘‘Modernizing Regulatory 

Review’’ (hereinafter referred to as the 

‘‘Modernizing E.O.’’) amends section 

3(f) of Executive Order 12866 

(Regulatory Planning and Review), 

among other things. 

The proposed rule allows counseling 

agencies to provide services through 

virtual methods of service delivery and 

to refer clients who prefer in-person 

counseling to other agencies that offer 

that service. HUD is not changing other 

requirements, for example the 

requirement that participating agencies 

demonstrate knowledge and a 

connection to the community they 

serve, and comply with state and local 

laws in each geographic area in which 

the participating agency operates. This 

rule was not subject to OMB review. 

This rule is not a ‘‘significant regulatory 

action’’ as defined in Section 3(f) of 

Executive Order 12866, and is not an 

economically significant regulatory 

action. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601 et seq.) generally requires 

an agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. The changes 

described in this proposed rule would 

modernize the regulations governing 

HUD’s Housing Counseling Program to 


lotter on DSK11XQN23PROD with PROPOSALS1
73300 Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Proposed Rules 

allow housing counseling agencies to 

use alternative communication 

methods, including virtual meeting 

tools, in lieu of providing in-person 

services. Participating agencies that do 

not provide in-person services would be 

required to refer clients to local 

providers that provide such services, 

when requested. The proposed rule 

would help reduce the costs of 

maintaining multiple physical locations, 

instead shifting emphasis to 

demonstrating knowledge of the local 

housing market and community 

resources and whether a housing 

counseling agency has established a 

sufficient community base to operate in 

the area covered by its work plan. These 

revisions impose no significant 

economic impact on a substantial 

number of small entities. Therefore, the 

undersigned certifies that this rule will 

not have a significant impact on a 

substantial number of small entities. 

Notwithstanding HUD’s view that this 

rule will not have a significant effect on 

a substantial number of small entities, 

HUD specifically invites comments 

regarding any less burdensome 

alternatives to this rule that will meet 

HUD’s objectives as described in the 

preamble to this rule. 

Environmental Impact 

This rule does not direct, provide for 

assistance or loan and mortgage 

insurance for, or otherwise govern or 

regulate real property acquisition, 

disposition, leasing, rehabilitation, 

alteration, demolition, or new 

construction; or establish, revise, or 

provide for standards for construction or 

construction materials, manufactured 

housing, or occupancy. Accordingly, 

under 24 CFR 50.19(c)(1), this rule is 

categorically excluded from 

environmental review under the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321). 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule either: (i) 

imposes substantial direct compliance 

costs on State and local governments 

and is not required by statute, or (ii) 

preempts State law, unless the agency 

meets the consultation and funding 

requirements of section 6 of the 

Executive order. This proposed rule 

does not have federalism implications 

and does not impose substantial direct 

compliance costs on State and local 

governments or preempt State law 

within the meaning of the Executive 

order. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531– 

1538) (UMRA) establishes requirements 

for Federal agencies to assess the effects 

of their regulatory actions on State, 

local, and Tribal governments, and on 

the private sector. This proposed rule 

will not impose any Federal mandates 

on any State, local, or Tribal 

Governments, or on the private sector, 

within the meaning of the UMRA. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520), an agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information, 

unless the collection displays a 

currently valid Office of Management 

and Budget (OMB) control number. The 

information collection requirements 

contained in this proposed rule have 

been approved by OMB under the 

Paperwork Reduction Act and assigned 

OMB control numbers 2502–0574 and 

2502–0614. 

List of Subjects in 24 CFR Part 214 

Administrative practice and 

procedure; Grant programs-housing and 

community development; Loan 

program-housing and community 

development; Organization and 

functions (government agencies); 

Reporting and recordkeeping 

requirements. 

For the reasons stated above, HUD 

proposes to amend 24 CFR part 214 as 

follows: 

PART 214—HOUSING COUNSELING 

PROGRAM 

■ 1. The authority citation for part 214 

continues to read as follows: 

Authority: 12 U.S.C. 1701x, 1701x–1; 42 

U.S.C. 3535(d). 

■ 2. Revise § 214.103(l) to read as 

follows: 

§ 214.103 Approval Criteria. 

* * * * * 

(l) Facilities. All participating 

agencies must maintain at least one 

facility. All facilities must meet the 

following criteria: 

(1) Have a clearly identified space 

available for the provision of housing 

counseling services; 

(2) Provide privacy for counseling 

services and confidentiality of client 

records; and 

(3) Provide accessibility features or 

make alternative accommodations for 

persons with disabilities, in accordance 

with section 504 of the Rehabilitation 

Act of 1973 (29 U.S.C. 794), 24 CFR 

parts 8 and 9, and the Americans with 

Disabilities Act (42 U.S.C. 12101 et 

seq.). 

* * * * * 

■ 3. In § 214.300: 

■ a. Revise paragraph (a)(3); 

■ b. Redesignate paragraphs (a)(4) 

through (9) as paragraphs (5) through 

(10); and 

■ c. Add new paragraph (a)(4). 

The additions and revisions to read as 

follows: 

§ 214.300 Counseling Services. 

(a) * * * 

(3) Counseling may take place at the 

housing counseling agency facility or at 

an alternate location, and may be 

conducted by telephone, or via 

collaborative online software. Agencies 

must ensure that any telephonic or 

collaborative online software, or any 

form of counseling, is accessible for 

persons with disabilities, in accordance 

with section 504 of the Rehabilitation 

Act of 1973 (29 U.S.C. 794), 24 CFR 

parts 8 and 9, and the Americans with 

Disabilities Act (42 U.S.C. 12101 et seq.) 

All agencies participating in HUD’s 

Housing Counseling program must, 

upon a client’s request, refer clients to 

participating agencies that provide inperson counseling services in 

accordance with 24 CFR 214.303(e). 

(4) Regardless of setting or format, all 

participating agencies must continue to 

meet the requirements of 24 CFR 

214.103(d), 214.103(g), and 214.103(h). 

* * * * * 

Julia R. Gordon, 

Assistant Secretary for Housing—Federal 

Housing Commissioner. 

[FR Doc. 2023–23332 Filed 10–24–23; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1, 31, and 301 

[REG–122793–19] 

RIN 1545–BP71 

Gross Proceeds and Basis Reporting 

by Brokers and Determination of 

Amount Realized and Basis for Digital 

Asset Transactions 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking; 

extension of comment period. 

SUMMARY: This document extends the 

comment period for a notice of 


lotter on DSK11XQN23PROD with PROPOSALS1