21880 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 

Location: Michigan Great Lakes 

Maritime Heritage Center. 

Address: 500 W. Fletcher Street, 

Alpena, MI 49707. 

2. Rogers City, MI 

Date: April 18, 2012. 

Location: Presque Isle District Library. 

Address: 181 East Erie Street, Roger 

City, MI 49779. 

3. Harrisville, MI 

Date: April 19, 2012. 

Location: Alcona County EMS 

Building. 

Address: 2600 E. M–72, Harrisville, 

MI 48740. 

Consultation Under National Historic 

Preservation Act 

This notice confirms that NOAA will 

fulfill its responsibility under section 

106 of the National Historic 

Preservation Act (NHPA, 16 U.S.C. 470) 

through the ongoing NEPA process, 

pursuant to 36 CFR 800.8(a) including 

the use of NEPA documents and public 

and stakeholder meetings to meet the 

section 106 requirements. The NHPA 

specifically applies to any agency 

undertaking that may affect historic 

properties. Pursuant to 36 CFR 

800.16(1)(1), historic properties 

includes: ‘‘Any prehistoric or historic 

district, site, building, structure or 

object included in, or eligible for 

inclusion in, the National Register of 

Historic Places maintained by the 

Secretary of the Interior. The term 

includes artifacts, records, and remains 

that are related to and located within 

such properties. The term includes 

properties of traditional religious and 

cultural importance to an Indian tribe or 

Native Hawaiian organization and that 

meet the National Register criteria.’’ 

In fulfilling its responsibility under 

the NHPA and NEPA, NOAA intends to 

identify consulting parties; identify 

historic properties and assess the effects 

of the undertaking on such properties; 

initiate formal consultation with the 

State Historic Preservation Officer, the 

Advisory Council of Historic 

Preservation, and other consulting 

parties; involve the public in 

accordance with NOAA’s NEPA 

procedures, and develop in consultation 

with identified consulting parties 

alternatives and proposed measures that 

might avoid, minimize or mitigate any 

adverse effects on historic properties 

and describe them in any environmental 

assessment or draft environmental 

impact statement. 

Authority: 16 U.S.C. 1431 et seq.; 16 

U.S.C. 470. 

Dated: April 3, 2012. 

Daniel J. Basta, 

Director for the Office of National Marine 

Sanctuaries. 

[FR Doc. 2012–8831 Filed 4–11–12; 8:45 am] 

BILLING CODE 3510–NK–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 200 

[Docket No. FR–5444–P–01] 

RIN 2502–AJ09 

Federal Housing Administration (FHA): 

Multifamily Accelerated Processing— 

Enhancing and Strengthening 

Multifamily Accelerated Processing 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Proposed rule. 

SUMMARY: Multifamily Accelerated 

Processing (MAP) is a processing system 

introduced in 2000 as a pilot program to 

facilitate the accelerated processing of 

loan applications for FHA multifamily 

mortgage insurance, which generally 

involve the refinance, purchase, new 

construction, or rehabilitation of 

multifamily properties. These 

transactions are costly, complicated, 

and time-consuming to process. Prior to 

MAP, HUD field offices were 

encouraged to develop and test 

individual fast-track processing systems 

for use by qualified FHA-approved 

lenders that were experienced in 

processing loan applications for 

multifamily mortgages. The intent was 

to considerably reduce the processing 

time of applications. These test 

procedures included providing qualified 

lenders with the option of preparing 

FHA forms and undertaking preliminary 

underwriting for certain types of loan 

applications. Fast-track processing 

procedures developed by individual 

HUD offices that facilitated processing 

applications without sacrificing quality 

or increasing risk were consolidated 

into a national test of fast-track style 

processing of multifamily mortgage 

insurance applications under the name 

‘‘MAP.’’ MAP has been administered to 

date through direct instructions to FHAapproved lenders under a MAP Guide. 

Given its experience to date with MAP, 

HUD believes the MAP accelerated 

processing procedures have been 

successful. To ensure the continued 

quality and efficiency of MAP 

procedures, HUD is codifying in 

regulations key provisions of MAP and 

introducing new provisions to 

strengthen MAP, to assure the integrity 

and competency of FHA-approved 

lenders as directed by the Helping 

Families Save Their Homes Act of 2009. 

DATES: Comment Due Date: June 11, 

2012. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule to the Regulations 

Division, Office of General Counsel, 

Department of Housing and Urban 

Development, 451 7th Street SW., Room 

10276, Washington, DC 20410–0500. 

Communications must refer to the above 

docket number and title. There are two 

methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. 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. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments 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 them immediately available to the 

public. Comments submitted 

electronically through the 

www.regulations.gov Web site can be 

viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Note: To receive consideration as public 

comments, comments must be submitted 

through one of the two methods specified 

above. Again, all submissions must refer to 

the docket number and title of the rule. 

No Facsimile Comments. Facsimile 

(FAX) comments are not acceptable. 

Public Inspection of Public 

Comments. All properly submitted 

comments and communications 

submitted to HUD will be available for 

public inspection and copying between 

8 a.m. and 5 p.m. weekdays at the above 

address. Due to security measures at the 

HUD Headquarters building, an 

appointment to review the public 

comments must be scheduled in 

advance by calling the Regulations 

Division at 202–708–3055 (this is not a 

toll-free number). Individuals with 

speech or hearing impairments may 

access this number via TTY by calling 

the Federal Relay Service at 800–877– 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 21881 

8339. Copies of all comments submitted 

are available for inspection and 

downloading at www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Terry W. Clark, Office of Multifamily 

Development, Office of Housing, 

Department of Housing and Urban 

Development, 451 7th Street SW., Room 

6134, Washington, DC 20410; telephone 

number 202–402–2663 (this is not a tollfree number). Persons with hearing or 

speech impairments may access this 

number through TTY by calling the tollfree Federal Relay Service at 800–877– 

8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. MAP 

The purpose of MAP is to have in 

place an accelerated system for 

processing FHA multifamily mortgage 

insurance applications that is consistent 

at each HUD multifamily processing 

office, and that significantly reduces the 

amount of time that HUD staff spends 

reviewing those applications. Under 

MAP, the lender is responsible for 

preparation of most of the application 

exhibits, such as the appraisal, and for 

making a recommendation to HUD 

based upon the lender’s processing and 

underwriting. This results in a 

considerable time savings for the lender. 

For example, under MAP, FHAapproved lenders are provided an 

earlier review of the application for 

insurance on new construction and 

substantial rehabilitation. Therefore, if 

the application is rejected at a preapplication stage, the lender and 

borrower do not spend the time and 

money required to prepare the more 

extensive exhibits and analysis for the 

application for an FHA firm 

commitment. While considerable 

responsibility for preparation of 

documents and initial review is placed 

with the lender, FHA still reviews a 

lender’s exhibits and makes the final 

underwriting decision. 

MAP is not automatically available to 

all FHA-approved lenders. To use MAP, 

an FHA-approved lender must apply for 

approval and be approved as a MAP 

lender by HUD’s Office of Multifamily 

Housing Development, Lender 

Qualification and Monitoring Division 

(LQMD). The appraisers and MAPapproved underwriters of the FHAapproved lender seeking MAP-lender 

designation must also attend a MAP 

training session. Lenders that are 

approved as MAP lenders are 

determined by HUD to be skilled in 

underwriting multifamily housing loans 

and in the preparation of applications 

for FHA multifamily mortgage 

insurance. Approval is on a nationwide 

basis; consequently, the MAP lender 

may submit applications using MAP 

regardless of where the property is 

located or which Multifamily Hub or 

Program Center will be processing the 

loan. As a condition of the opportunity 

to use MAP, a MAP lender’s MAP loans 

are subject to post-endorsement review 

by LQMD. MAP-lender approval will be 

for a defined period, and may be 

renewed, denied renewal, or terminated 

by FHA as provided in this proposed 

rule. For example, if the MAP lender 

fails to meet HUD standards for 

underwriting loans, its MAP designation 

also may be terminated. 

Under the current MAP system, MAP 

may be used for the following FHAinsured multifamily programs: Section 

220 (apartments in urban renewal 

areas), Sections 221(d)(3) and 221(d)(4) 

(apartments), Section 223(a)(7) 

(refinance of existing insured 

properties), Section 223(f) (acquisition 

or refinancing of existing apartments), 

and Section 231 (housing for the 

elderly) new construction or substantial 

rehabilitation. MAP may be used for 

such other FHA-insured multifamily 

programs as may be announced by FHA. 

From the outset, through MAP, FHA 

has strived to strike a careful balance 

between expedited processing and 

ensuring an acceptable level of risk for 

HUD’s multifamily mortgage insurance 

programs. Based on HUD’s experience 

to date with MAP, this proposed rule 

strives not only to maintain that balance 

but to enhance the quality, competency, 

and integrity of FHA-approved lenders 

that are approved as MAP lenders and 

to manage risk to a level that is 

acceptable to FHA. 

B. MAP Today 

The MAP program has changed 

significantly in recent years. Since its 

commencement in 2000, there are now 

more than 100 FHA-approved MAP 

lenders. Multifamily loan volume has 

increased seven-fold, while the number 

of HUD multifamily housing staff has 

declined. Transactions are larger and 

more complex than in the past, and 

mixed-use projects with commercial 

components are more common. Most 

projects have market rents and fewer 

than in the past are supported by rental 

assistance. The insured portfolio is 

growing quickly, but with some 

concentrations in markets that have 

experienced soft or deteriorating 

conditions, and with repeat borrowers 

in some markets. MAP is increasingly 

used for affordable housing construction 

and preservation projects with tax 

credits and other subsidies, and these 

transactions require special expertise to 

process. 

C. Strengthening the Quality of FHAApproved Lenders and Underwriters 

Part of the impetus to review the MAP 

system, particularly the qualifications of 

an FHA-approved lender to engage in 

MAP, and to codify lender 

qualifications and the core requirements 

of MAP, is the Helping Families Save 

Their Homes Act of 2009 (HFSH Act). 

The HFSH Act (Division A of Pub. L. 

111–22, approved May 20, 2009), among 

other things, directs FHA to strengthen 

the existing FHA lender approval 

process, including by ensuring that only 

lenders of integrity are approved by 

FHA as approved mortgagees. 

FHA responded to this statutory 

direction by taking several steps. 

Shortly following enactment of the 

HFSH Act, FHA issued Mortgagee Letter 

2009–31, entitled ‘‘Strengthening 

Counterparty Risk Management,’’ which 

advised FHA-lenders of the additional 

ineligibility criteria established by the 

HFSH Act, and the immediate 

applicability of such criteria. FHA also 

issued Mortgagee Letter 2009–41, which 

addressed Appraisal Performance 

Standards and Sanctions, and that 

reminded FHA-approved lenders of 

their responsibility, along with the 

appraisers, for the quality and accuracy 

of appraisals. By final rule issued on 

April 20, 2010 (75 FR 20718), FHA 

increased the net worth requirements of 

FHA-approved lenders, both single 

family and multifamily lenders. These 

increases were the first since 1993, and 

were adopted to ensure that FHAapproved lenders are sufficiently 

capitalized for the financial transactions 

occurring, and the concomitant risks 

present, in today’s economy. On May 2, 

2011, at 76 FR 24507, FHA announced 

the update of 36 multifamily rental 

project loan-closing documents, the 

majority of which had not been updated 

in more than two decades. The updated 

closing documents reflected the greater 

flexibility provided to lenders to 

address problems that arise in 

management of the property, but also 

greater responsibility to undertake 

increased due diligence to assure sound 

underwriting in insured multifamily 

projects. 

All these steps that have been taken 

are directed to raising the level of 

competency and integrity of 

participating lenders, and ensuring the 

continued viability and availability of 

FHA mortgage insurance programs. This 

proposed rule, which addresses the 

MAP system, is another such step to 

strengthen FHA, its programs, and 

participants, and is consistent with 

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21882 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 

recent Congressional direction for FHA 

to focus on minimize risk in its 

multifamily housing programs. In the 

Senate Committee Report that 

accompanied the Senate bill, S.1596, 

which provides Fiscal Year (FY) 2012 

appropriations for HUD, the Committee 

noted that as a result of the housing 

crisis, the demand for FHA multifamily 

housing loans has increased, and stated: 

‘‘In an effort to respond to this increased 

demand, HUD is streamlining its 

multifamily processes and updating its 

programs to address current market 

conditions. The Committee also expects 

FHA to increase its attention to the 

additional risk this volume brings, and 

expects FHA to dedicate the same level 

of attention to risks in the multifamily 

program as it has to risks in its single 

family program.’’ (See Senate Report 

113–83, issued September 21, 2011, at 

page 135.) The changes proposed by this 

rule, as discussed in the following 

sections of this preamble, will not only 

improve the MAP system, by increasing 

efficiency in the system, but also reduce 

risk to FHA. 

II. This Proposed Rule 

This rule proposes to establish 

codified regulations for lender and 

underwriter eligibility and tier 

qualification criteria for MAP 

participation, and for FHA’s process for 

approving MAP lenders and 

underwriters. Currently, HUD’s MAP 

regulations, codified in 24 CFR part 200, 

subpart Y, address only the enforcement 

actions that FHA may take against a 

MAP lender. As the following 

discussion will highlight, enforcement 

actions remain a key part of the 

regulations, but HUD proposes, through 

this rule, to add new provisions to 24 

CFR part 200, subpart Y, to provide for 

a tiered approval system, the periodic 

expiration of approval, and lender 

application for reapproval under the 

MAP system. 

New regulatory section, § 200.1401, 

entitled ‘‘Purpose of MAP and this 

Subpart,’’ reflects the broader scope of 

the MAP regulations as proposed to be 

revised to this rule, and new section 

§ 200.1403, the definition section, 

defines terms used in the proposed 

revised regulations. New regulatory 

section, § 200.1407, sets out the 

responsibilities of the MAP lender. 

These responsibilities reflect the 

obligation of the MAP lender to not only 

ensure the skill and competency of the 

lender’s principal staff members, but to 

also ensure that the MAP lender is 

operating with the integrity 

contemplated by the HFSH Act. 

A. Tiered MAP Lender and Underwriter 

Approval 

The MAP approval tiers, set out in 

§ 200.1411(b) and § 200.1413(b), are 

based on HUD’s experience in 

administering the MAP program, which 

has shown that the most difficult 

programs to underwrite are those for 

new construction and substantial 

rehabilitation or that involve various 

sources of government assistance. HUD 

recognizes that all MAP lenders and 

underwriters do not necessarily have 

the skills and experience to competently 

handle all the MAP programs. Tiered 

approval will assure that MAP programs 

with greater underwriting demands and 

higher risk will require participants to 

have greater expertise. Both new and 

existing lenders and underwriters must 

comply with tier requirements to submit 

an application under MAP and must be 

approved by tier based upon meeting 

the tier qualifications. Section 200.1413 

of the proposed rule set outs the lender 

eligibility and application process for 

MAP approval. 

Section 200.1415 of the proposed rule 

establishes the MAP eligibility and 

application approval process for 

underwriters. The addition of a separate 

MAP eligibility and approval process for 

underwriters underscores the 

significance of having an experienced 

and skilled underwriter for MAP 

processing. Consistent with § 200.1415 

concerning underwriter eligibility, 

§ 200.1425 provides for post-approval 

training for underwriters, and 

§ 200.1427 provides that HUD may 

terminate the approval of an 

underwriter that has not submitted a 

pre-application or application for Firm 

Commitment for a period of 2 years. 

The tier approval designation for 

which MAP lenders and underwriters 

will be approved will be based on their 

multifamily transaction experience, as 

evidenced by recently closed loans and 

each loan’s performance. As provided in 

§ 200.1411(b), HUD will establish four 

approval tiers: 

Tier 1: Market-rate refinancing under 

Section 223(f) or 223(a)(7); 

Tier 2: Refinancing under Section 

223(f) or Section 223(a)(7) of affordable 

housing properties with government 

subsidies; 

Tier 3: Market-rate new construction 

or substantial rehabilitation under 

Section 220, 221(d), 231 or 241; 

Tier 4: New construction or 

substantial rehabilitation under Sections 

220, 221(d), 231, or 241 of affordable 

housing properties with government 

subsidies. Government subsidies refer to 

such programs as the Low-Income 

Housing Tax Credit (LIHTC) program, 

tax-exempt bond financing, HUD’s 

Section 8 Project-Based Rental 

Assistance program, and HUD’s Section 

236 Interest Reduction Payments and 

similar forms of rental subsidy for 

affordable housing. 

As provided in the accompanying 

notice, published elsewhere in today’s 

Federal Register, HUD will from time to 

time issue the quantity, specific 

characteristics, and recentness of 

transactions that a lender or underwriter 

must have underwritten in order to have 

the adequate recent experience required 

for each tier. Each issuance will be 

preceded by notice and the opportunity 

for public comment. The relevant 

lending experience that HUD will 

recognize need not be exclusively with 

FHA programs, but may also be with 

those of Fannie Mae, Freddie Mac, state 

housing finance agencies, conventional 

lenders, or commercial banks. Non-FHA 

loan program experience must be 

equivalent to the programs offered 

under MAP and to the underwriting 

functions required under MAP, to be 

given credit. For current MAP lenders 

and underwriters, relevant lending 

activity involving MAP programs will 

be given the most weight. Consistent 

with HUD’s commitment to notify MAP 

lenders or prospective MAP lenders of 

changes to the requisite experience 

needed, § 200.1417(a)(1)(iii) provides for 

HUD to limit the size of a loan that an 

approved MAP lender may process, 

with such limitation established either 

by the number of units for which a loan 

can be made or by the dollar amount of 

the loan. Although an applicant may 

meet the criteria for approval as a MAP 

lender at a requested tier or at a lower 

tier, HUD may decide, based on the 

applicant’s MAP application and 

experience to date, or based on the 

conditions of the housing market at the 

time, that limitations should be placed 

on the size of loans processed by a MAP 

lender or lenders. 

With respect to tier approval, 

§ 200.1423 permits an approved MAP 

lender or underwriter to submit an 

application at any time requesting 

approval at a higher tier than originally 

assigned to the MAP lender or 

underwriter. In determining whether the 

MAP lender or underwriter meets the 

criteria for a higher tier, HUD will 

follow the procedures in §§ 200.1413, 

200.1415, and 200.1417. 

B. Periodic Renewal of MAP Lender 

Approval 

A key goal of this proposed rule is to 

assure a high level of quality and 

integrity of FHA-approved lenders that 

are approved to be MAP lenders. As 

provided in § 200.1407, a MAPmstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 21883 

approved lender is given considerable 

authority and responsibility in the 

processing of multifamily mortgage 

transactions. Given the trust and 

responsibility that FHA places in these 

lenders, it is important for FHA to 

ensure that these lenders, not only at the 

time of initial MAP lender approval but 

throughout the lenders’ tenure as MAP 

lenders, remain lenders of competency 

and integrity, and are up-to-date on 

changes in multifamily transactions and 

skilled and experienced in underwriting 

and processing loan applications for 

these transactions. The expiration of 

MAP lender approval and the 

requirement to apply periodically for 

renewal of MAP-approval designation 

will help ensure that MAP lenders 

remain competent to fast-track 

multifamily mortgage insurance 

applications through the MAP system. 

Currently, MAP approval designation 

does not expire unless there is an 

enforcement action that results in 

termination, or there is an eligibility 

requirement that the FHA-approved 

lender no longer meets. As provided in 

§ 200.1417(b), this rule proposes to 

change the existing MAP system by 

requiring MAP approved lenders to 

apply to renew their approval every 4 

years. At such time, the MAP lender’s 

performance will be reviewed and FHA 

will determine whether the MAPapproval designation should be 

renewed. This proposed rule provides 

in § 200.1421, that no later than 90 days 

before the date of the end of the 4-year 

period of a MAP lender’s approval, the 

MAP lender must reapply for approval. 

The requirement to renew MAP-lender 

designation allows FHA to assess the 

lender’s 4-year performance as a MAP 

lender, and determine whether the 

FHA-approved lender’s designation as a 

MAP lender should be renewed or 

disapproved, and if it should be 

renewed at the tier for which the FHAapproved lender was previously 

approved or at a lower tier, if so 

warranted. 

For example, FHA may determine that 

the MAP lender’s experience during the 

preceding 4 years is not sufficient or at 

a level of performance for the FHAapproved MAP lender to maintain its 

current tier approval; however, the 

FHA-approved MAP lender can be 

renewed under a lower tier at which its 

performance has been satisfactory. The 

proposed period for MAP approval is 

based on HUD’s experience that MAP 

lenders’ performance, underwriting 

practices, and business processes 

typically evolve over time as changes in 

personnel, management, and market 

conditions occur. As a result, the 

capacity of the institution may be 

markedly different from when it was 

originally approved and assigned to a 

tier by HUD. HUD has determined that 

a 4 year approval period appropriately 

balances the need to protect the FHA 

insurance fund with HUD’s desire to 

minimize inconvenience to lenders. 

Upon application for renewal, the 

lender’s record, including any sanctions 

or enforcement actions taken against the 

lender, its default and claim rates, and 

the overall performance of its 

underwritten or closed loans will be 

taken into account when determining 

whether MAP approval should be 

renewed or disapproved. Although a 

lender’s initial and ongoing MAP 

approval period will normally be for 4 

years, the term of approval may be 

shorter based upon a review of the 

lender’s application and record. 

C. Conditional MAP Approval and 

Expiration of Existing MAP Approvals 

The proposed rule provides, in 

§ 200.1417(b)(3), that FHA may also 

grant conditional MAP lender or 

underwriter approval if the lender or 

underwriter lacks experience in 

processing or underwriting FHA loan 

applications. If the lender or 

underwriter satisfies the conditions 

imposed by FHA, for example, by 

undertaking additional training within a 

specified period of time or completing 

a predetermined number of acceptably 

underwritten closings, then full 

approval may be granted upon 

completion of the condition. 

Conditional approval, however, will not 

be indefinite. FHA will impose a 

deadline for the completion of the 

conditions for which full approval is 

necessary, usually one year from the 

date on which conditional approval is 

granted. Conditional approval may be 

granted for initial MAP approval, or 

may be granted in cases where a 

currently approved MAP lender 

requests an upgrade in tier approval. 

The proposed rule provides, in 

§ 200.1419, that MAP lender and 

underwriter approvals issued prior to 

the effective date of the final rule under 

this rulemaking will expire 45 days 

following the lender’s or underwriter’s 

receipt of a letter from HUD inviting the 

lender or underwriter to apply for tier 

approval. HUD anticipates that it will 

send such letters to approximately 25 

percent of lenders and underwriters 

with existing approvals per year, for 4 

years, and that this pace may vary 

depending upon HUD’s resources for 

processing applications. If the lender or 

underwriter submits a timely 

application for tier approval, the 

existing approval will continue to be 

valid until HUD notifies the applicant of 

the action it is taking on the application 

for tier approval. A lender or 

underwriter that fails to respond in a 

timely manner to the letter will be 

eligible for approval at Tier 1 for a 

period of time as provided for 

conditional approvals in § 200.1417(b). 

D. Other Provisions of the Proposed 

Rule 

Additional New Regulatory Sections 

In addition to the new sections 

discussed above in this preamble, new 

§ 200.1405 addresses the multifamily 

programs eligible for MAP processing, 

which will be posted on HUD’s Web 

site; such postings will ensure that the 

most up-to-date list of eligible MAP 

multifamily programs is available to the 

public. As noted earlier, § 200.1407 lists 

the responsibilities of a MAP lender. As 

also noted earlier, § 200.1413(b) 

addresses the tier-specific criteria that 

lenders must meet. Paragraph (a) of this 

section, § 200.1413(a), addresses the 

general requirements for MAP-lender 

approval. Section 200.1419 addresses 

appeals, and provides that an applicant 

may submit a written appeal of any 

HUD decision regarding the applicant 

under §§ 200.1411 through 200.1427. 

This section provides that the appeal 

must be submitted to HUD within 30 

days of the date of the applicant’s 

receipt of HUD’s written notification to 

the applicant of its decision. This 

section also provides that HUD will 

respond to the applicant’s appeal within 

60 days of HUD’s receipt of the 

applicant’s appeal, and that if HUD’s 

appeal decision confirms HUD’s original 

decision, no further appeals will be 

accepted. 

Existing Regulatory Sections 

As noted earlier in this preamble, this 

proposed rule builds upon the existing 

regulations in 24 CFR part 200, subpart 

Y, which currently address MAP 

enforcement and sanctions. The 

enforcement provisions remain in place 

with certain organization revisions. For 

example, the proposed rule would 

eliminate provisions vesting existing 

authorities to undertake certain 

enforcement and corrective actions 

against MAP lenders and underwriters 

in a MAP Lender Review Board. HUD 

has found that it is unnecessary to 

create and maintain such a board 

because it is duplicative of other offices 

within HUD, such as the Lender 

Qualifications and Monitoring Division 

that are responsible for monitoring and 

ensuring compliance with MAP 

requirements. This change would not 

alter the existing authorities to take such 

actions, nor the procedural protections, 

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21884 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 

1Currently approved lenders will be required to 

submit an application of renewal, with about onequarter renewing annually over a 4-year period. 

including notice and opportunity to be 

heard, that are provided in § 200.1535. 

Rather, it would merely revise 

provisions that currently specify that it 

is the MAP Lender Review Board that is 

vested with the authorities. 

Accordingly, existing references to the 

MAP Lender Review Board in 24 CFR 

part 200, subpart Y, would be replaced 

simply with references to HUD. HUD 

would specify the office or official that 

would carry out these functions through 

its ordinary delegations process. At the 

final rule stage, HUD will include 

amendatory instructions that will make 

a nomenclature change throughout 

subpart Y to substitute ‘‘HUD’’ wherever 

the terms ‘‘the MAP Lender Review 

Board’’ and ‘‘Board’’ appear. 

E. Proposed MAP Rule—Increasing 

Efficiency and Reducing Burden 

Since its inception, MAP has been 

shown to increase efficiency in 

processing multifamily mortgage 

applications without increasing risk to 

FHA. Under the current structure, an 

approved lender or underwriter can 

originate any qualifying multifamily 

mortgage. This rule proposes to further 

increase efficiency by approving lenders 

and underwriters for one of four tiers 

based on their origination experience. 

The primary benefit of changes 

proposed by this rule is to further 

increase the efficiency and processing of 

multifamily mortgage applications. The 

tiered structure will decrease the 

number of rejected applications, 

reducing time spent by lenders and FHA 

staff in reviewing applications. This 

change will be accomplished by better 

aligning lenders and underwriters with 

the programs with which they are most 

experienced. FHA does not expect a 

change in volume of their multifamily 

originations as a result of the creation of 

tiers within the MAP program or a 

significant shift of business between 

lenders within MAP. Instead, HUD 

expects that the number of unsuccessful 

applications will decrease. 

In FY 2011, approximately 230 

multifamily mortgage applications were 

not approved. FHA staff spent 

approximately 400 hours processing 

MAP mortgage applications. The Bureau 

of Labor Statistics reports almost $40 

per hour as the median wage for 

government employees in financial 

operations. Meanwhile, lenders spent 

about 450 hours of staff time preparing 

applications for new construction or 

substantial rehabilitation and 

approximately 300 hours of staff time on 

mortgage applications for refinance. 

Based on HUD’s knowledge of the 

industry, the hourly rate for staff 

preparing applications is approximately 

$75. If implementation of the changes 

proposed by this rule is successful in 

eliminating 75 percent of these 

unapproved applications, FHA would 

save $2.772 million in staff time and 

lenders would save $5.003 million in 

staff time. In sum, this proposed rule 

can be expected to produce benefits 

totaling $7.775 million. 

TABLE 1—AVOIDED STAFF TIME PREPARING UNSUCCESSFUL MORTGAGE APPLICATIONS

Number of 

applications * 

Hours per 

response Hourly cost Total annual cost 

FHA: 

New Construction/Substantial Rehabilitation ............................................ 98 400 $40 $1,572,000 

Refinance .................................................................................................. 75 400 40 1,200,000 

FHA Subtotal ..................................................................................... ........................ ........................ ........................ 2,772,000 

Lenders: 

New Construction/Substantial Rehabilition ............................................... 98 450 75 3,315,938 

Refinance .................................................................................................. 75 300 75 1,687,500 

Lender Subtotal ................................................................................. ........................ ........................ ........................ 5,003,478 

Total Costs ................................................................................. ........................ ........................ ........................ 7,775,489 

* Number of Applications is approximately 75 percent of the number of unapproved MAP mortgage applications in FY 2011. 

In addition to creating tiers, this rule 

proposes to require renewal as a MAP 

lender every 4 years.1 This new 

requirement will increase costs to 

participating lenders as additional staff 

time will be spent preparing the MAP 

renewal application. There are currently 

92 approved MAP lenders. FHA 

estimates that lenders spend about 40 

hours preparing documents for each 

MAP approval. Following the initial tier 

placement, lenders may subsequently 

decide to apply for adjustment to a 

higher tier (before the 4-year period 

ends). FHA expects about ten 

underwriters and five lenders to apply 

for adjustment to a higher tier, requiring 

about 20 hours per application. Finally, 

although FHA currently receives several 

appeals each year, the number could 

increase slightly as a lender could 

appeal not only a rejection but also the 

tier in which the lender is placed. In FY 

2011, only two appeals were filed for 

denied applications. FHA does not 

expect an increase of more than three 

appeals annually as a result of the 

change to a tiered system. Preparation of 

each appeal by a lender or underwriter 

is expected to require one hour of 

applicant time. 

Based on knowledge of industry 

wages, the estimated hourly wage of 

lenders and underwriters that prepare 

these types of documents is 

approximately $100. The table below 

shows the total cost estimate per 

category. The total cost to lenders and 

underwriters as a result of this rule 

would be $398,300. 

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Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 21885 

TABLE 2—COSTS OF RENEWAL, ADJUSTMENT, AND APPEALS

Type Number Hours per 

response Hourly cost Total annual cost 

Lender renewal ................................................................................................ 92 40 $100 $368,000 

Adjustment to Higher Tier ................................................................................ 15 20 100 30,000 

Appeals ............................................................................................................ 3 1 100 300 

Total Costs ............................................................................................... ........................ ........................ ........................ 398,300 

As a processing system, much of the 

processes of MAP as the above tables 

reflect pertain to information collection 

(that is, submission of documentation to 

HUD and HUD review of the 

documentation) or recordkeeping. The 

MAP information collection 

requirements are subject to the notice 

and comment procedures of the 

Paperwork Reduction Act of 1995 

(PRA). The requirements are currently 

approved under PRA and reflect OMB 

approval numbers. Consistent with the 

requirements of the PRA, these 

requirements must be published for 

notice and comment every 3 years. The 

changes that this rule would make to the 

current information collection 

requirements are set out in the table 

provided in the following section of the 

preamble, Section IV, and the public 

comment that this rule solicits also 

solicits comment on the reporting and 

recordkeeping burden. 

III. Regulatory Review 

Executive Order (EO) 13563, entitled 

‘‘Improving Regulation and Regulatory 

Review,’’ was signed by the President 

on January 18, 2011, and published on 

January 21, 2011 (76 FR 3821). This EO 

requires 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.’’ Section 4 

of the EO, entitled ‘‘Flexible 

Approaches,’’ provides, in relevant part, 

that where relevant, feasible, and 

consistent with regulatory objectives, 

and to the extent permitted by law, each 

agency shall identify and consider 

regulatory approaches that reduce 

burdens and maintain flexibility and 

freedom of choice for the public. HUD 

submits that the changes proposed by 

this rule to the MAP system are 

consistent with the EO’s directions. As 

the preceding section discussed, the 

changes proposed by this rule will 

increase efficiency in the MAP system 

both for HUD and MAP approved 

lenders. 

IV. Findings and Certifications 

Paperwork Reduction Act 

The information collection 

requirements contained in this rule have 

been submitted to the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520). In accordance 

with the Paperwork Reduction Act, 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 

OMB control number. 

The burden of the information 

collections in this rule is estimated as 

follows: 

REPORTING AND RECORDKEEPING BURDEN

Information collection Number of respondents Response frequency 

(average) 

Total annual 

responses 

Burden hours 

per response 

(in hours) 

Total annual 

hours 

§ 200.1413(c) (application for 

approval of tier qualification).

10 new applicants ................. Annually ................................ 10 40 400 

§ 200.1415(b) (underwriter’s 

application for MAP approval).

60 underwriters ..................... Annually ................................ 60 20 1,200 

§ 200.1421 (renewal of MAP 

lender approval).

23 lenders renewing annually Annually ................................ 23 20 460 

§ 200.1421 (adjustment of approval to a higher tier).10 underwriters and 5 lenders applying annually.Annually ................................ 15 20 300 

§ 200.1429 (appeals) ............. 5 appeals .............................. Annually ................................ 5 1 5 

Total ............................... 113 ........................................ ............................................... 113 101 2,365 

In accordance with 5 CFR 

1320.8(d)(1), HUD is soliciting 

comments from members of the public 

and affected agencies concerning this 

collection of information to: 

(1) Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

(2) Evaluate the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information; 

(3) Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

(4) Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated collection 

techniques or other forms of information 

technology; e.g., permitting electronic 

submission of responses. 

Interested persons are invited to 

submit comments regarding the 

information collection requirements in 

this rule. Comments must refer to the 

proposal by name and docket number 

(FR–444–P–01) and must be sent to: 

HUD Desk Officer, Office of 

Management and Budget, New 

Executive Office Building, 

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21886 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 

Washington, DC 20503, Fax: (202) 

395–6947, and 

Reports Liaison Officer, Office of 

Housing, Department of Housing and 

Urban Development, 451 7th Street 

SW., Room 9116, Washington, DC 

20410. 

Interested persons may submit 

comments regarding the information 

collection requirements electronically 

through the Federal eRulemaking Portal 

at http://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 them immediately 

available to the public. Comments 

submitted electronically through the 

http://www.regulations.gov Web site can 

be viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (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. MAP lenders 

consist of both small and large FHAapproved lenders that have the skill and 

experience to take on responsibilities 

that would otherwise be handled by 

FHA staff in the processing of 

applications. The system commenced as 

a demonstration to determine whether 

multifamily mortgage insurance 

applications could be processed on an 

accelerated basis without risking the 

quality of processing and without 

increasing risk to the FHA insurance 

fund. Overall, the MAP system has been 

effective, and HUD is proposing to 

codify, in regulation, key requirements 

of the MAP system. 

Through this rule, HUD is proposing 

improved oversight of the MAP system, 

to meet the statutory directive that HUD 

ensure that only lenders of integrity are 

approved by FHA as FHA-approved 

mortgagees, and remain lenders of 

integrity, competency, and skill after 

FHA approval is granted. HUD is not 

proposing significant changes to 

participation in the MAP system. The 

eligibility requirements essentially 

remain the same, with only minor 

adjustment to ensure that the lenders 

have experience in processing the more 

complex transactions. However, HUD is 

proposing that MAP lenders have their 

MAP approval designation renewed 

every 4 years. This renewal-approval 

process will improve the quality of 

monitoring of MAP lenders by HUD, 

because the renewal process provides 

for a minimum performance review of 

the MAP lender by HUD every 4 years. 

The new requirements introduced by 

HUD through this proposed rule pertain 

to a MAP lender’s performance, 

regardless of whether the MAP lender is 

small or large. 

The codification of the eligibility 

criteria, together with HUD’s oversight 

requirements, which are already 

codified, will provide a convenient 

location for FHA-approved lenders and 

other interested parties to reference the 

key features and requirements of the 

MAP system. For these reasons, the 

undersigned certifies that this rule will 

not have a significant economic impact 

on a substantial number of small 

entities. 

Notwithstanding HUD’s 

determination that this rule would not 

have a significant economic effect on a 

substantial number of small entities, 

HUD specifically invites comments 

regarding less burdensome alternatives 

to this rule that would meet HUD’s 

objectives as described in this preamble. 

Environmental Impact 

This rule does not direct, provide for 

assistance or loan and mortgage 

insurance 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. The rule is, 

therefore, categorically excluded under 

24 CFR 50.19(c)(k1) and a Finding of No 

Significant Impact (FONSI) does not 

need to be prepared for this document. 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits, to the extent 

practicable and permitted by law, an 

agency from promulgating a regulation 

that has federalism implications and 

either imposes substantial direct 

compliance costs on state and local 

governments and is not required by 

statute, or preempts state law, unless the 

relevant requirements of section 6 of the 

executive order are met. This 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 (UMRA) (2 U.S.C. 

1531–1538) establishes requirements for 

federal agencies to assess the effects of 

their regulatory actions on state, local, 

and tribal governments and the private 

sector. This rule does not impose any 

federal mandate on any state, local, or 

tribal government or the private sector 

within the meaning of UMRA. 

List of Subjects in 24 CFR Part 200 

Administrative practice and 

procedure, Claims, Equal employment 

opportunity, Fair housing, Housing 

standards, Lead poisoning, Loan 

programs—housing and community 

development, Mortgage insurance, 

Organization and functions 

(Government agencies), Penalties, 

Reporting and recordkeeping 

requirements, Social Security, 

Unemployment compensation, Wages. 

For the reasons stated in the 

preamble, HUD proposes to amend 24 

CFR part 200, as follows: 

PART 200—INTRODUCTION TO FHA 

PROGRAMS 

1. The authority citation for 24 CFR 

part 200 continues to read as follows: 

Authority: 12 U.S.C. 1702–1715z–21; 42 

U.S.C. 3535(d). 

2. Revise the heading of subpart Y and 

add §§ 200.1401, 200.1403, 200.1405, 

200.1407, 200.1409, 200.1411, 200.1413, 

200.1415, 200.1417, 200.1419, 200.1421, 

200.1423, 200.1425, 200.1427, and 

200.1429, and undesignated headings, 

and revise the subpart table of contents 

to read as follows: 

Subpart Y—Multifamily Accelerated 

Processing (MAP): Eligibility, 

Approval, Quality Assurance, and 

Enforcement for MAP Lenders and 

Underwriters 

General 

Sec. 

200.1401 Purpose of MAP and this subpart. 

200.1403 Definitions. 

200.1405 FHA programs eligible for MAP 

processing. 

200.1407 MAP lender responsibilities. 

Approval of Lenders and Underwriters 

200.1411 Approval required. 

200.1413 Lender eligibility and application 

for MAP approval. 

200.1415 Underwriter eligibility and 

application for MAP approval. 

200.1417 HUD’s review of MAP lender and 

underwriter approval applications. 

200.1419 Expiration of previously granted 

MAP approvals. 

200.1421 Renewal of lender approval. 

200.1423 Adjustment of approval to a 

higher tier. 

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200.1425 Post-approval underwriter 

training requirement. 

200.1427 Inactive underwriters. 

200.1429 Appeals. 

Map Lender Quality Assurance Enforcement 

200.1500 Sanctions against a MAP lender. 

200.1505 Warning letter. 

200.1510 Probation. 

200.1515 Suspension of MAP privileges. 

200.1520 Termination of MAP privileges. 

200.1525 Settlement agreements. 

200.1530 Bases for sanctioning a MAP 

lender. 

200.1535 MAP Lender Review Board. 

200.1540 Imminent harm notice of action. 

200.1545 Appeals of sanction decisions. 

General 

§ 200.1401 Purpose of MAP and this 

subpart. 

(a) MAP is a national accelerated 

processing system for the FHA 

multifamily mortgage insurance 

programs. An FHA-approved lender that 

is approved to process multifamily 

mortgage insurance applications under 

MAP is responsible for preparation of 

the majority of the exhibits involved in 

the processing of a multifamily 

mortgage insured by FHA, such as the 

appraisal required for an application for 

mortgage insurance, and for making a 

recommendation to HUD based upon 

the lender’s processing and 

underwriting. HUD, however, reviews 

the lender’s exhibits and makes the final 

underwriting decision. 

(b) This subpart establishes the 

criteria by which a new or existing 

FHA-approved lender or underwriter 

receives and maintains MAP approval, 

the basic responsibilities of a MAP 

lender, the manner in which FHA will 

monitor a MAP Lender’s performance, 

the enforcement actions that FHA may 

take against a MAP lender for violation 

of requirements, and the due process 

procedures available to a MAP lender. 

Unless superseded by the requirements 

of this part, the MAP processing 

instructions, submission, and reporting 

requirements issued through 

supplemental guidance remain 

applicable to the MAP system. 

§ 200.1403 Definitions. 

The definitions in 24 CFR 200.3 are 

applicable to this subpart. Additionally, 

as used in this subpart: 

Government subsidy means one or 

more of the following: Low-Income 

Housing Tax Credits, Section 8 ProjectBased Rental Assistance, Rent-restricted 

bond financing, Section 236 Interest 

Reduction Payments, and any other 

similar form of affordable housing 

subsidy, as identified by HUD. 

In good standing means being in 

compliance with all applicable FHA and 

MAP requirements, not being in inactive 

status (in accordance with § 200.1427, 

as applicable), not being subject to or 

under consideration for MAP approval, 

suspension, or termination and, in the 

case of a lender, being approved to 

participate in FHA Multifamily 

Mortgage Insurance programs as a 

supervised lender or mortgagee or 

nonsupervised lender or mortgagee. 

Principal means a primary participant 

of the lender entity, who is empowered 

to act as the lender’s representative. 

Principal staff members refer to those 

persons designated by the lender as 

approved MAP underwriter(s), 

construction loan administrator(s), and 

other authorized signatory(s) with 

authority to bind the lender on MAP 

loan applications. 

§ 200.1405 FHA programs eligible for MAP 

processing. 

FHA-insured multifamily programs 

that are eligible for processing under 

MAP are listed on HUD’s Web site at 

www.hud.gov. 

§ 200.1407 MAP lender responsibilities. 

(a) A MAP lender shall comply with 

such processing instructions, 

submission, and reporting requirements 

through the regulations of this subpart 

and as may be otherwise specified by 

HUD through supplemental guidance. 

(b) A MAP lender must submit to the 

HUD office, as designated by HUD, the 

qualifications of the MAP lender’s 

principal staff members or consultants 

who will be reviewing or preparing the 

lender’s application for mortgage loan 

insurance. 

(c) MAP lenders must establish and 

maintain separation between the 

underwriting and origination functions 

to ensure that individuals performing 

underwriting functions do not face any 

incentive to approve a loan that does 

not meet applicable underwriting 

standards. Minimum standards for 

establishing and maintaining such 

separation include, but are not limited 

to, the following: 

(1) An individual may not underwrite 

or participate in underwriting a loan if 

the individual will receive or expects to 

receive either directly or indirectly any 

compensation that is contingent upon 

origination of that loan; 

(2) Underwriting staff are not 

evaluated by origination staff, and 

compensation of underwriting staff shall 

not be tied to loan production levels; 

(3) Underwriters must be full-time, 

salaried employees of the lender and 

may not be independent contractors or 

temporary workers; 

(4) Origination staff shall be 

precluded from hiring contractors, such 

as appraisers or market analysts, on 

behalf of underwriters; and 

(5) MAP lenders shall ensure that 

origination staff does not have 

management authority over or influence 

on the duties or conclusions of 

underwriting staff. 

(d)(1) A MAP lender must submit 

annually to HUD, in accordance with 

procedures specified by HUD, 

including, but not limited to, the 

requirements of 24 CFR 200.62, an 

update of MAP lender status, certified 

by an individual who is authorized to 

bind the MAP lender. The certified 

update must be submitted no later than 

June 30 of each year and must: 

(i) List the names of the following 

individuals: 

(A) The MAP lender’s MAP-approved 

underwriters and the tiers at which they 

are approved; 

(B) The MAP lender’s construction 

loan administrators (if applicable); and 

(C) Individuals who are authorized to 

bind the MAP lender by signing FHA 

mortgage insurance applications; and 

(ii) State that all of the MAP lender’s 

MAP-approved underwriters have 

received tier approval and have 

attended the training required under 

§ 200.1425. 

(2) False claims and statements may 

result in criminal and civil penalties 

pursuant to 12 U.S.C. 1735f–14, 18 

U.S.C. 1001, 1010, 1012, and 31 U.S.C. 

3729, 3802. 

Approval of Lenders and Underwriters 

§ 200.1411 Approval required. 

(a) General. A lender may not process 

and an underwriter may not underwrite 

a loan application utilizing MAP unless: 

(1) The lender is approved by and is 

in good standing with HUD as a MAP 

lender for the loan transaction for which 

the application is submitted; and 

(2) The underwriter who will 

underwrite the loan and sign the 

underwriter’s narrative is approved by 

and is in good standing with HUD as a 

MAP underwriter for that lender and for 

the tier designation and loan program 

under which the application is 

submitted. Approval as a MAP 

underwriter does not entitle an 

underwriter to underwrite loans for a 

lender other than for the MAP-approved 

lender that submitted the underwriter 

application approved by HUD. A MAPapproved lender that employs an 

underwriter previously approved as an 

underwriter for another MAP-approved 

lender must submit an application for 

underwriter approval in accordance 

with § 200.1415(b), and HUD will 

evaluate the application and take action 

in accordance with § 200.1417. 

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(b) Tiered approval. HUD will provide 

approvals and renewals of approvals of 

new and existing MAP lenders and 

underwriters on a tiered basis in 

accordance with a lender’s or 

underwriter’s experience and 

qualifications at the time of application. 

A MAP lender or underwriter may not 

use MAP to process or underwrite loan 

transactions that are not covered by the 

lender’s or underwriter’s approval tier 

(‘‘covered loan transactions’’), which are 

as follows: 

(1) Tier 1: MAP-eligible acquisition 

and refinancing programs without 

government subsidies; 

(2) Tier 2: MAP-eligible acquisition 

and refinancing programs with or 

without government subsidies; 

(3) Tier 3: All MAP-eligible programs 

without government subsidies; and 

(4) Tier 4: All MAP-eligible programs, 

with or without government subsidies. 

(c) Nationwide validity. Approval as a 

MAP lender or underwriter, which 

includes approval at a particular tier, is 

valid for transactions nationwide, 

regardless of where the property that 

will serve as the security for the 

mortgage is located or which HUD office 

will process a transaction. Approved 

lenders and their approval tier will be 

posted on HUD’s Web site, which will 

be regularly updated to reflect any 

change in the lender’s tier or MAPapproval status. 

§ 200.1413 Lender eligibility and 

application for MAP approval. 

To be eligible for designation as a 

MAP lender, a lender must meet the 

general requirements under paragraph 

(a) of this section and the applicable 

tier-specific requirements under 

paragraph (b) of this section. HUD will 

not approve the application of a lender 

that does not meet the Tier 1 

requirements. 

(a) General requirements. The lender: 

(1) Must be approved as an FHAapproved lender under parts 202 of this 

chapter; 

(2) Must not be subject to judgments 

arising from lawsuits or administrative 

proceedings that would adversely 

impact its ability to conduct business as 

a lender, or subject to any of the 

ineligibility criteria specified in 24 CFR 

202.5(j); and 

(3) Must have an employee who is 

approved by HUD as a MAP 

underwriter. Application for the 

qualifying MAP underwriter approval 

may be submitted prior to or 

simultaneously with a lender’s 

application for MAP-lender approval. 

(b) Tier-specific requirements. For a 

lender to obtain approval at a specific 

tier: 

(1) The lender must have adequate 

capacity and experience in processing 

and in underwriting covered loan 

transactions for that tier using FHA 

insurance programs, or non-FHA 

transactions that are equivalent to 

covered transactions for that tier. 

(i) A non-FHA transaction will be 

deemed the equivalent of using FHA 

insurance programs for a covered 

transaction for a tier if HUD determines 

that the quality and scope of 

underwriting and processing required 

and actually performed for the non-FHA 

transaction are equivalent to that 

required using FHA insurance programs 

for the covered transaction. Non-FHA 

transactions that may be used to 

demonstrate tier qualifications include 

those of Fannie Mae, Freddie Mac, state 

housing finance agencies, conventional 

lenders, and commercial banks; 

(ii) HUD will from time to time issue 

the quantity, specific characteristics, 

and recentness of transactions that a 

lender must have processed or 

underwritten in order to have the 

adequate recent experience required for 

each tier. Each issuance will be 

preceded by notice and the opportunity 

for public comment. 

(2) The lender must have a 

satisfactory record processing and 

underwriting covered transactions for 

the tier at which approval is requested. 

In reviewing the lender’s record, HUD 

will consider enforcement actions taken 

against the lender, warning letters 

issued to the lender, the lender’s default 

and claim rates, and the overall 

performance of its previously 

underwritten or closed loans. 

(c) Application. (1) The lender must 

submit an application for MAP approval 

or for tier qualification in such form as 

required by HUD, demonstrating that 

the lender meets the applicable 

eligibility requirements under this 

section. 

(2) HUD may from time to time 

announce its suspension of acceptance 

of applications under this section. The 

announcement shall specify the reasons 

for the suspension of acceptance of 

applications. 

(3) An FHA-approved lender that has 

had its MAP lender designation 

terminated may not submit an 

application for MAP lender designation 

for a period of one year following the 

date of termination of the prior MAP 

lender designation. 

§ 200.1415 Underwriter eligibility and 

application for MAP approval. 

(a) To be eligible for designation as a 

MAP underwriter, an individual must 

be a full-time employee of the lender 

that is seeking or has received approval 

as a MAP Lender, and must have 

adequate experience in underwriting 

covered loan transactions using FHA 

insurance programs for the specific tier 

for which the underwriter seeks 

designation, or non-FHA transactions 

that are equivalent to covered 

transactions for that tier. 

(1) A non-FHA transaction will be 

deemed the equivalent of using FHA 

insurance programs for a covered 

transaction for a tier if HUD determines 

that the quality and scope of 

underwriting and processing required 

and actually performed for the non-FHA 

transaction are equivalent to that 

required using FHA insurance programs 

for the covered transaction. Non-FHA 

transactions that may be used to 

demonstrate tier qualifications include 

those of Fannie Mae, Freddie Mac, state 

housing finance agencies, conventional 

lenders, and commercial banks. 

(2) HUD will from time to time issue 

the quantity, specific characteristics, 

and recentness of transactions that an 

underwriter must have underwritten in 

order to have the adequate recent 

experience required for each tier. Each 

issuance will be preceded by notice and 

the opportunity for public comment. 

(b) A lender must submit an 

underwriter’s application for MAPunderwriter approval or for 

underwriter-tier qualification in such 

form as required by HUD that 

demonstrates that the underwriter meets 

the applicable eligibility requirements 

under this section. 

§ 200.1417 HUD’s review of MAP lender 

and underwriter approval applications. 

(a) HUD will review a MAP lender or 

underwriter approval application, along 

with any information from HUD offices 

where the applicant’s prior loan 

applications or exhibits have been 

submitted within the preceding time 

period specified by HUD. 

(1)(i) If HUD determines that the 

applicant meets the criteria for approval 

in § 200.1413 or § 200.1415, as 

applicable, the applicant is eligible for 

approval for the requested tier and HUD 

will notify the applicant of its decision 

to designate the lender or underwriter as 

a MAP lender or underwriter under the 

tier for which the lender or underwriter 

applied. 

(ii) If HUD determines that the 

applicant does not meet the criteria for 

the requested tier but the applicant 

meets the criteria for approval at a lower 

tier, HUD may approve the application 

at the lower tier. In such a case, HUD 

will notify the applicant of its eligibility 

for approval at a lower tier and advise 

the applicant of the reasons that HUD 

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did not approve the applicant at the 

requested tier. 

(iii) Whether HUD approves an 

applicant at a requested tier under 

paragraph (a)(1)(i) of this section or at a 

lower tier under paragraph (a)(1)(ii) of 

this section, HUD reserves the right to 

limit the number of units or the dollar 

amount per loan application that an 

approved applicant may process, when 

HUD determines that there is a necessity 

to limit the loans being processed to 

such amount or size, as HUD may 

specify by notice. 

(2) If HUD determines that the 

applicant does not meet the criteria for 

approval in § 200.1413 or § 200.1415, as 

applicable, HUD will disapprove the 

application and notify the applicant of 

its decision and of the reason for the 

disapproval. 

(3) If HUD is unable to determine the 

eligibility of an applicant, HUD may, at 

its discretion, disapprove the 

application and notify the applicant of 

the reason for its decision or ask the 

applicant to correct identified 

deficiencies in the application and 

resubmit it. 

(b) Period of approval. Unless an 

approval is affected by an enforcement 

action under this part, an approval 

granted under this section shall be 

valid, as follows: 

(1) Except as provided under 

paragraph (b)(3) of this section and 

under § 200.1427, the approval of an 

underwriter will not expire so long as 

the underwriter remains active and in 

the employment of the lender under 

which approval was granted, and 

without interruption. 

(2) Except as provided in paragraphs 

(b)(3) of this section, or for reasons 

otherwise specified by HUD in writing, 

the approval of a lender as a MAP 

lender is valid for a period of 4 years 

from the date on which HUD notifies 

the lender of the approval; 

(3)(i) A lender or underwriter without 

prior experience in processing or 

underwriting FHA loan applications 

may be eligible for conditional approval. 

Conditional approval will be valid for a 

period of one year from the date on 

which HUD notifies the applicant of the 

approval, unless HUD decides to allow 

an extension of the period of 

conditional approval for an additional 

one-year period. During the conditional 

approval period, HUD may impose 

limits on the number of loan 

applications that may be submitted, or 

the number of units or dollar amount 

per loan application, or any 

combination of these limits. 

(ii) To be eligible for conversion to 

full MAP approval status, the lender or 

underwriter must, during the period of 

conditional approval: 

(A) Underwrite and submit to HUD 

loan applications that result in Firm 

Commitments from HUD, in a minimum 

number as specified by HUD at the time 

conditional approval is granted, in 

accordance with the applicant’s 

experience; 

(B) Satisfy any additional conditions 

that HUD has imposed on the lender or 

underwriter at the time the conditional 

approval was granted; and 

(C) Demonstrate acceptable capacity 

to process and underwrite loan 

applications using FHA insurance 

programs for covered loan transactions 

for the tier for which conditional 

approval has been granted. 

(iii) The approval of a lender or 

underwriter that is converted from 

conditional to full MAP approval status 

is valid, unless otherwise specified by 

HUD, for the remainder of the 4-year 

period beginning on the date that HUD 

notified the applicant of its initial 

conditional approval. 

(iv) If a lender or underwriter does not 

comply with the requirements under 

paragraphs (b)(3)(ii)(A) through (C) of 

this section, HUD may extend the term 

of conditional approval or terminate the 

conditional approval. 

§ 200.1419 Expiration of previously 

granted MAP approvals. 

(a) Expiration. A MAP lender or 

underwriter approval that was granted 

by HUD prior to [effective date of final 

rule to be inserted at the final rule stage] 

shall expire upon the later of the 

following: 

(1) Four years following the date on 

which the approval was granted; 

(2) Forty-five days following the 

lender’s or underwriter’s receipt of a 

letter from HUD inviting the lender or 

underwriter to apply for tier approval, if 

by such date the lender or underwriter 

has not submitted an application in 

accordance with § 200.1413(c) or 

1415(b); or 

(3) Upon HUD’s notification of the 

lender or underwriter of the action HUD 

has taken on the lender or underwriter’s 

application submitted in accordance 

with § 200.1413(c) or § 200.1415(b), 

provided that the lender or underwriter 

submitted the application within 45 

days of the date of the lender or 

underwriter’s receipt of a letter from 

HUD inviting the lender or underwriter 

to apply for tier approval. 

(b) One-time approval at Tier 1 in 

absence of submission. A lender whose 

MAP approval was granted by HUD 

prior to [effective date of final rule to be 

inserted at final rule stage] and that 

does not submit an application in 

accordance with § 200.1413(c) within 45 

days following the lender’s receipt of a 

letter from HUD inviting the lender to 

apply for tier approval, shall be eligible 

for approval at Tier 1 for a period of 

time as provided in § 200.1417(b). 

§ 200.1421 Renewal of lender approval. 

(a) No later than 90 days before the 

date of the expiration of MAP-lender 

approval, the MAP lender may submit 

an application, in such form as required 

by HUD, for renewal of MAP-lender 

approval. The application for renewal 

must demonstrate that the lender 

continues to meet the applicable 

eligibility requirements under 

§ 200.1411 and § 200.1413 of this part. 

(b) HUD will review a lender’s 

application for renewal of MAP 

approval, along with any information 

provided by HUD offices to which the 

applicant’s loan applications or exhibits 

have been submitted within the 

previous approval period or periods, up 

to a maximum of 4 years. HUD may 

determine that the lender’s experience 

or the performance of the lender’s loans 

endorsed during the preceding 4 years 

is not sufficient for the lender to renew 

its approval at the current tier. In 

considering an application for renewal 

of MAP approval, HUD will follow the 

procedures and may take any action 

described in § 200.1417. 

§ 200.1423 Adjustment of approval to a 

higher tier. 

(a) An approved lender or underwriter 

may submit an application, in such form 

as required by HUD, for approval at a 

higher tier. The lender or underwriter 

must demonstrate that it meets the 

applicable eligibility requirements for 

the tier of approval that the lender or 

underwriter is seeking. 

(b) HUD will review a lender or 

underwriter’s application for MAP 

approval at a higher tier, along with any 

information provided by HUD offices 

where the applicant’s loan applications 

or exhibits have been submitted within 

the previous approval period or periods, 

up to a total period of time as published 

by HUD for public comment. In 

considering an application for MAP 

approval at a higher tier, HUD will 

follow the procedures and may take any 

action described in § 200.1417. 

Approval of a MAP lender at a higher 

tier shall be valid as provided in 

§ 200.1417(a)(1). 

§ 200.1425 Post-approval underwriter 

training requirement. 

Newly approved MAP underwriters 

must attend a MAP training session 

provided or approved by HUD in order 

to be eligible to satisfy the underwriter 

requirement at § 200.1411(a)(2). 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

21890 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Proposed Rules 

§ 200.1427 Inactive underwriters. 

An underwriter who at the time of the 

lender’s annual certification to HUD 

pursuant to § 200.1407(d) has not 

submitted a pre-application or 

application for Firm Commitment for a 

period of 2 years will be designated as 

inactive. Inactive underwriters may be 

terminated from the MAP program 

because of inactivity and, if so, must 

reapply for approval to participate in 

MAP programs. 

§ 200.1429 Appeals. 

(a) An applicant may submit a written 

appeal of any HUD decision regarding 

the applicant under §§ 200.1411 through 

200.1427 of this subpart. Any such 

appeal must be submitted to the 

designated HUD appeal official within 

30 days of the date of receipt of HUD’s 

written notification to the applicant of 

HUD’s decision. HUD’s written 

notification will advise who is the 

designated HUD appeal official and 

provide the address for such official. 

The written appeal may set forth the 

reasons why the HUD decision should 

be reconsidered or changed, or may 

request an informal conference, or both. 

(b) HUD will respond to an 

applicant’s appeal within 60 days from 

the date of HUD’s receipt of the written 

appeal. If HUD’s response to the appeal 

is to confirm HUD’s original decision, 

no further appeal will be accepted from 

the applicant. 

3. Immediately before § 200.1500, add 

an undesignated heading, to read as 

follows: 

Map Lender Quality Assurance 

Enforcement 

4. In § 200.1505, revise paragraph (c) 

to read as follows: 

§ 200.1505 Warning letter. 

* * * * * 

(c) Relationship to other sanctions. 

The issuance of a warning letter is not 

subject to the procedures in § 200.1535, 

and is not a prerequisite to the 

probation, or suspension, or termination 

of MAP privileges. 

5. In § 200.1510, revise paragraphs (a) 

and (b)(1) to read as follows: 

§ 200.1510 Probation. 

(a) In general. HUD may place a 

lender on probation, in accordance with 

the procedures of § 200.1535. 

(b) Effect of probation. (1) Probation is 

intended to be corrective in nature and 

not punitive. As a result, release from 

probation is conditioned upon the 

lender meeting a specific requirement or 

requirements, such as replacement of a 

staff member. A lender’s failure to take 

prompt corrective action after being 

placed on probation may be the basis for 

a recommendation of either suspension 

or termination. 

* * * * * 

6. In § 200.1515, revise paragraph (a) 

to read as follows: 

§ 200.1515 Suspension of MAP privileges. 

(a) In general. HUD may suspend a 

lender’s eligibility for MAP, in 

accordance with the procedures of 

§ 200.1535. 

* * * * * 

7. In § 200.1520, revise paragraph (a) 

to read as follows: 

§ 200.1520 Termination of MAP privileges. 

(a) In general. Except as provided in 

paragraph (b) of this section, HUD may 

terminate a lender’s MAP privileges in 

accordance with the procedures of 

§ 200.1535. 

* * * * * 

8. In § 200.1525, revise paragraph (a) 

to read as follows: 

§ 200.1525 Settlement agreements. 

(a) HUD staff, as authorized, may 

negotiate a settlement agreement with a 

MAP lender before or after the issuance 

of a warning letter or referral to HUD. 

* * * * * 

9. In § 200.1535, revise the heading 

and paragraphs (a)(1) and (a)(2), 

paragraph (b) introductory text, and 

(f)(1) to read as follows: 

§ 200.1535 Procedures for imposition of 

sanctions. 

(a) Authority. (1) Sanctions. HUD may 

impose appropriate sanctions on a MAP 

lender after: 

(i) Conducting an impartial review of 

all information and documentation 

submitted to HUD; and 

(ii) Making factual determinations 

that there has been a violation of MAP 

requirements. 

(2) Settlement agreements. HUD is 

authorized to approve settlement 

agreements in accordance with 

§ 200.1525 of any pending matter. 

* * * * * 

(b) Notice of violation. Before HUD 

reviews a matter for consideration of a 

sanction, HUD will issue written notice 

of violation to the MAP lender’s contact 

person as listed on the Multifamily 

MAP Web site. The notice is sent by 

overnight delivery and must be signed 

for by an employee of the MAP lender 

upon receipt. The notice: 

* * * * * 

(f) HUD action. (1) HUD will consider 

the evidence included in the 

administrative record and make a final 

decision concerning the matter. Any 

record of confidential communications 

within HUD at this stage of the 

proceedings is privileged from 

disclosure and will not be regarded as 

a part of the administrative record of 

any matter. 

* * * * * 

10. Revise the heading of § 200.1545 

to read as follows: 

§ 200.1545 Appeals of sanction decisions. 

* * * * * 

Dated: March 16, 2012. 

Carol J. Galante, 

Acting Assistant Secretary for Housing— 

Federal Housing Commissioner. 

[FR Doc. 2012–8705 Filed 4–11–12; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2011–1109] 

RIN 1625–AA09 

Drawbridge Operation Regulation; 

Sturgeon Bay Ship Canal, Sturgeon 

Bay, WI 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes to 

establish a drawbridge operating 

schedule for the Maple-Oregon and 

Michigan Street Bridges across the 

Sturgeon Bay Ship Canal, at miles 4.17 

and 4.3, in Sturgeon Bay, Wisconsin. 

The establishment of this schedule is 

necessary due to the construction of the 

Maple-Oregon Street Bridge and the 

completed rehabilitation of the 

Michigan Street Bridge. The proposed 

regulation also confirms the winter 

drawbridge schedules for all three 

drawbridges over Sturgeon Bay Ship 

Canal, including the two bridges above 

and the Bayview Bridge at mile 3.0. 

DATES: Comments and related material 

must reach the Coast Guard on or 

before: May 14, 2012. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2011–1109 using any one of the 

following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: (202) 493–2251. 

(3) Mail: Docket Management Facility 

(M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue SE., Washington, DC 20590– 

0001. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS