[Federal Register Volume 77, Number 29 (Monday, February 13, 2012)]
[Proposed Rules]
[Page 7558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3289]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 202

[Docket No. FR-5416-N-02]
RIN 2502-AI91


Withdrawal of Proposed Rule on Approval of Farm Credit System 
Lending Institutions in Federal Housing Administration (FHA) Mortgage 
Insurance Programs

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Withdrawal of proposed rule.

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SUMMARY: This notice withdraws HUD's August 2011 rule that proposed to 
amend HUD's regulations to enable the direct lending institutions of 
the Farm Credit System to seek approval to participate in the FHA 
mortgage insurance programs as approved mortgagees and lenders.

DATES: The proposed rule is withdrawn February 13, 2012.

FOR FURTHER INFORMATION CONTACT: Office of Lender Activities and 
Program Compliance, Department of Housing and Urban Development, 451 
7th Street SW., Washington, DC 20410-8000; telephone number 202-708-
1515 (this is not a toll-free number). Persons with hearing or speech 
impairments may access this number through TTY by calling the toll-free 
Federal Information Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    On August 26, 2011, at 76 FR 53362, HUD published a proposed rule 
that would enable the direct lending institutions of the Farm Credit 
System to seek approval to participate in the FHA mortgage insurance 
programs as FHA-approved mortgagees and lenders. In the proposed rule, 
HUD noted that recent difficulties in mortgage finance markets 
indicated reduced availability of housing credit in rural areas. HUD 
therefore proposed to extend FHA mortgagee and lender eligibility to 
the lending institutions of the Farm Credit System to provide an 
additional avenue for mortgage financing in rural areas. The Farm 
Credit System is a federally chartered network of borrower-owned 
lending institutions composed of cooperatives and related service 
organizations. The public comment period for the proposed rule closed 
on October 25, 2011. HUD received approximately 27 substantive public 
comments in response to the August 26, 2011, proposed rule. Certain 
comments were identical in substance, having been submitted as part of 
mailing campaigns. The public comments on this rule can be found at 
http://www.regulations.gov/#!searchResults;rpp=10;po=0;s=FR-5416-P-01.
    The commenters were almost evenly divided in their support of and 
opposition to the rule. Those commenters that supported the rule stated 
that there was indeed a need for available housing credit in rural 
areas and that allowing Farm Credit lending institutions to be FHA-
approved lenders would aid in the necessary extension of credit. The 
commenters stated that the Farm Credit System has been a source of 
consistent and reliable credit for rural homeowners and that the 
ability to provide the option of FHA programs to families in rural 
areas will help ensure that the borrowing needs of rural families are 
met. Those commenters that opposed the rule stated that there was no 
need to expand FHA mortgage availability to Farm Credit member 
institutions; that the banking community was satisfactorily meeting the 
need for credit in rural areas. The commenters opposing the rule also 
stated that it was their view that approval of Farm Credit lending 
institutions to originate FHA insured loans runs afoul of the 
Administration's proposal to reduce government involvement in the 
housing finance market.
    Upon consideration of the issues raised by public comments, HUD is 
withdrawing the August 26, 2011, proposed rule. While HUD seeks to 
ensure the availability of mortgage financing for qualified borrowers 
nationwide--and particularly in underserved areas--HUD and the 
Administration remain committed to reducing FHA's market share and 
facilitating the return of private capital to the housing finance 
market. Therefore, in concert with its network of FHA-approved lending 
partners, FHA will continue to monitor the adequacy of mortgage credit 
in rural areas to ensure that rural residents have access to 
homeownership.
    Accordingly, the proposed rule to amend 24 CFR 202.10, published on 
August 26, 2011, at 76 FR 53362, entitled ``Approval of Farm Credit 
System Lending Institutions in FHA Mortgage Insurance Programs,'' is 
hereby withdrawn.

    Dated: February 7, 2012.
Carol J. Galante,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2012-3289 Filed 2-10-12; 8:45 am]
BILLING CODE 4210-67-P