Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Rules and Regulations 9177 

1The President’s Budget for FY 2012, found at 

http://www.whitehouse.gov/omb/budget/Overview, 

contains identical language to the paragraph cited 

above; see the HUD Appendix to the FY 2012 

Budget on page 591. 

AIRAC Date State City Airport FDC No. FDC Date Subject 

8–Mar–12 ..... OR Portland ................. Portland Intl ........................... 2/5031 1/24/12 ILS RWY 10R (SA CAT I), Amdt 

34 

8–Mar–12 ..... AZ Phoenix ................. Phoenix Sky Harbor Intl ........ 2/5642 1/27/12 RNAV (GPS) Y RWY 7R, Amdt 1 

[FR Doc. 2012–3376 Filed 2–15–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 203 

[Docket No. FR–5461–F–02] 

RIN 2502–AJ01 

Federal Housing Administration (FHA): 

Suspension of Section 238(c) SingleFamily Mortgage Insurance in Military 

Impacted Areas 

AGENCY: Office of the Assistant 

Secretary of Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Final rule. 

SUMMARY: On August 30, 2011, HUD 

published a proposed rule to suspend 

FHA’s mortgage insurance program for 

military impacted areas under section 

238(c) of the National Housing Act. This 

single-family mortgage insurance 

program, established by regulation in 

1977, has been significantly 

underutilized for the past several years. 

Additionally, these mortgage loans are 

insured under comparable terms and 

conditions as loans insured under 

HUD’s primary single-family mortgage 

insurance program under section 203(b) 

of the National Housing Act. 

Accordingly, those borrowers who 

would be served under section 238(c) of 

the National Housing Act are served 

equally well under the section 203(b) 

mortgage insurance program. The 

suspension of this mortgage insurance 

program is consistent with the 

President’s budget requests for Fiscal 

Years (FYs) 2011 and 2012. In this final 

rule, HUD is adopting the proposed rule 

without change. 

DATES: Effective Date: March 19, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Karin Hill, Director, Office of Single 

Family Program Development, Office of 

Housing, Department of Housing and 

Urban Development, 451 7th Street SW., 

Room 9278, Washington, DC 20410– 

8000; telephone number 202–708–4308 

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

with hearing or speech impairments 

may access this number via TTY by 

calling the Federal Relay Service at 

1–800–877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background—The Proposed Rule 

On August 30, 2011, HUD published 

a proposed rule in the Federal Register 

(76 FR 53851) to suspend FHA’s 

mortgage insurance program for military 

impacted areas under section 238(c) of 

the National Housing Act (Act). Section 

238(c) of the Act (12 U.S.C. 1715z–3(c)) 

was added by the Housing and 

Community Development Act of 1977 

(Pub. L. 95–128) to authorize HUD to 

insure mortgages executed in 

connection with the construction, 

repair, rehabilitation, or purchase of 

property located near any installation of 

the Armed Forces of the United States 

in federally impacted areas in which 

conditions are such that one or more of 

the applicable insuring requirements 

under another single-family mortgage 

insurance program cannot be met. 

HUD’s current regulation 

implementing section 238(c) is codified 

at 24 CFR 203.43e. The regulation, 

promulgated in 1977, closely tracks the 

language of section 238(c) of the Act. 

Although established to ensure the 

availability of affordable housing in 

military impacted areas, the program 

has been minimally utilized by eligible 

borrowers. Section 238(c) mortgage 

insurance has been available in only six 

counties throughout the country, three 

in Georgia and three in New York. From 

January 1, 2005, to June 30, 2010, FHA 

insured 4,542 single-family home loans 

in these six counties, and only 2,309 

were endorsed under section 238(c) of 

the Act. The 2,309 loans endorsed since 

2005 represent only .05 percent of all 

FHA-insured loans endorsed during that 

span. 

The President’s budget requests for 

FYs 2011 and 2012 acknowledged the 

underutilization of the section 238(c) 

program and advised that HUD would 

take action to halt the availability of the 

program in light of the significant 

underutilization. The FY 2011 budget 

request found at http:// 

www.gpoaccess.gov/usbudget/fy11/ 

index.html states the following: 

The Budget assumes that HUD will 

administratively suspend the Section 238(c) 

program in 2011. The Section 238(c) program 

provides single family mortgage insurance 

similar to MMI for a small number of families 

in areas affected by military installations. 

The elimination of Section 238(c) will not 

negatively impact the availability of FHA 

insured financing in the six counties 

currently covered under this program. (See 

HUD Appendix to the Budget at page 620 at 

http://www.gpoaccess.gov/usbudget/fy11/ 

appendix.html).1

II. This Final Rule 

This final rule follows publication of 

the August 30, 2011, proposed rule. The 

proposed rule provided for a 60-day 

public comment period, which closed 

on October 31, 2011. HUD did not 

receive any public comments, and HUD 

is adopting as final the proposed August 

30, 2011, rule without change. 

Consistent with the President’s budget 

request and Executive Order (EO) 

13563, entitled ‘‘Improving Regulation 

and Regulatory Review,’’ signed by the 

President on January 18, 2011, and 

published on January 21, 2011, at 76 FR 

3821, this final rule suspends the 

section 238(c) program and removes 

§ 203.43e from HUD’s codified 

regulations. HUD’s removal of the 

regulations at § 203.43e is not 

inconsistent with suspension of the 

section 238(c) mortgage insurance 

program. If HUD subsequently 

determines that there is a demand for 

this program and that military families 

would be better served by this program, 

HUD can reactivate it on the basis of the 

statutory language and does not need a 

regulation to make insurance available 

under this program. If such a situation 

occurs, HUD would notify the public 

through Federal Register notice that the 

program has been activated, so that 

eligible borrowers would be able to 

inquire about the availability of 

insurance under this program from their 

lenders. HUD notes that the removal of 

the regulations at § 203.43e would have 

no impact on loans already endorsed for 

FHA insurance under the section 238(c) 

program. 

III. Findings and Certification 

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 


wreier-aviles on DSK5TPTVN1PROD with RULES
9178 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Rules and Regulations 

economic impact on a substantial 

number of small entities. 

The final rule would not modify or 

add any new regulatory burdens on 

FHA-approved mortgage lenders. 

Rather, the final rule would remove 

§ 203.43e from HUD’s regulations, in 

conformity to HUD’s (and the 

Administration’s) decision to no longer 

exercise its authority to insure 

mortgages under section 238(c) of the 

Act. As more fully discussed above in 

the preamble to this rule, the mortgage 

insurance authority provided by section 

238(c) of the Act has been minimally 

sought by eligible borrowers and 

consequently minimally utilized by 

lenders and other small entities 

participating in the FHA programs. 

Further, as noted above, section 238(c) 

mortgage insurance operated in a 

manner comparable to FHA’s mortgage 

insurance program under section 203(b) 

of the Act, HUD’s primary single-family 

mortgage insurance program. 

Accordingly, for the above reasons, 

the undersigned certifies that this rule 

will not have a significant economic 

impact on a substantial number of small 

entities. 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule either imposes 

substantial direct compliance costs on 

state and local governments and is not 

required by statute, or the rule preempts 

state law, unless the agency meets the 

consultation and funding requirements 

of section 6 of the Executive Order. This 

rule will not have federalism 

implications and would 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 rule does not 

impose any federal mandates on any 

state, local, or tribal governments, or on 

the private sector, within the meaning of 

UMRA. 

Environmental Impact 

This final 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). 

Catalogue of Federal Domestic 

Assistance 

The Catalogue of Federal Domestic 

Assistance Number for the principal 

FHA single-family mortgage insurance 

program is 14.117. 

List of Subjects in 24 CFR Part 203 

Hawaiian Natives, Home 

improvement, Indians—lands, Loan 

programs—housing and community 

development, Mortgage insurance, 

Reporting and recordkeeping 

requirements, Solar energy. 

Accordingly, for the reasons 

discussed in the preamble, 24 CFR part 

203 is amended as follows: 

PART 203—SINGLE FAMILY 

MORTGAGE INSURANCE 

■ 1. The authority citation for part 203 

continues to read as follows: 

Authority: 12 U.S.C. 1709, 1710, 1715b, 

1715z–16, and 1715u; 42 U.S.C. 3535(d). 

■ 2. Remove and reserve § 203.43e. 

Dated: February 10, 2012. 

Carol J. Galante, 

Acting Assistant Secretary for Housing— 

Federal Housing Commissioner. 

[FR Doc. 2012–3667 Filed 2–15–12; 8:45 am] 

BILLING CODE 4210–67–P 


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