51538 Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Notices 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–4679–N–10; HUD–2005– 

0018] 

Changes in Certain Multifamily 

Mortgage Insurance Premiums 

AGENCY: Office of the Assistant 

Secretary for Housing-Federal Housing 

Commissioner, HUD. 

ACTION: Notice. 

SUMMARY: In accordance with HUD 

regulations, this notice announces the 

changes of the mortgage insurance 

premiums (MIP) for the following 

Federal Housing Administration (FHA) 

multifamily mortgage insurance 

programs whose commitments will be 

issued or reissued in Fiscal Year (FY) 

2006: 

• All sections of the National Housing 

Act where the mortgagor equity is 

produced from the proceeds of the sale 

of low-income housing tax credits 

(LIHTC): The MIP is reduced to 45 basis 

points. 

• Section 207/223(f) refinance or 

purchase of apartments: The MIP is 

reduced to 45 basis points. 

• Section 223(a)(7) refinance of FHA 

insured apartment mortgages: The MIP 

is reduced to 45 basis points. 

Under the Department of Housing and 

Urban Development Reform Act of 1989, 

Pub. L. 101–235 (approved December 

15, 1989) and HUD’s implementing 

instructions, a sponsor is required to 

submit a certification regarding 

governmental assistance, including any 

low-income housing tax credits, with all 

mortgage insurance applications. 

DATES: Comment Due Date: September 

29, 2005. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this notice to the Regulations Division, 

Office of General Counsel, Room 10276, 

Department of Housing and Urban 

Development, 451 Seventh Street, SW., 

Washington, DC 20410–0500. Interested 

persons may also submit comments 

electronically through either: 

• The Federal eRulemaking Portal at: 

www.regulations.gov; or 

• The HUD electronic website at: 

www.epa.gov/feddocket. Follow the link 

entitled ‘‘View Open HUD Dockets.’’ 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Facsimile (FAX) comments are not 

acceptable. In all cases, communications 

must refer to the docket number and 

title. All comments and 

communications submitted will be 

available, without revision, for public 

inspection and copying between 8 a.m. 

and 5 p.m. weekdays at the above 

address. Copies are also available for 

inspection and downloading at 

www.epa.gov/feddocket. 

FOR FURTHER INFORMATION CONTACT: 

Michael McCullough, Director, Office of 

Multifamily Development, Department 

of Housing and Urban Development, 

451 Seventh Street, SW., Washington, 

DC 20410–8000, (202) 708–1142 (this is 

not a toll-free number). Hearing- or 

speech-impaired individuals may access 

these numbers through TTY by calling 

the Federal Information Relay Service at 

(800) 877–8339 (this is a toll-free 

number). 

SUPPLEMENTARY INFORMATION: 

Introduction 

HUD’s regulations at 24 CFR 207.252, 

207.252a, and 207.254 provide that 

instead of setting the MIP at one specific 

rate for all programs, the Secretary is 

permitted to change an MIP program by 

program within the full range of HUD’s 

statutory authority of one fourth of one 

percent to one percent of the 

outstanding mortgage principal per 

annum through a notice, as provided in 

section 203(c)(1) of the National 

Housing Act (the Act) (12 U.S.C. 

1709(c)(1)). The rule states that HUD 

will provide a 30-day period for public 

comment on notices changing MIPs in 

multifamily insured housing programs. 

Pursuant to this comment procedure, 

this notice announces changes from FY 

2005 in the MIP for programs authorized 

under the National Housing Act. The 

effective date for these changes is 

proposed to be October 1, 2005. 

The MIP rate is to be changed to 45 

basis points for the following programs 

where the mortgagor’s equity is being 

produced from the proceeds of the sale 

of Low Income Housing Tax Credits 

(LIHTCs): sections 221(d)(4), 221(d)(3), 

207, 220, 231, 232, 241(a). Section 207/ 

223(f) refinance or purchase of 

apartments will be lowered from 50 to 

45 basis points; and section 223(a)(7) 

refinance of FHA insured apartment 

mortgages has been lowered from 50 to 

45 basis points. The MIP rate for section 

232 new construction or substantial 

rehabilitation of Health Care Facilities 

and section 241(a) Health Care 

Improvements and Additions will 

remain unchanged at 57 basis points. 

The MIP rate for sections 207, 213, 220, 

231 without LIHTC, and 234(d), 242 and 

Title XI of the National Housing Act 

will remain unchanged at 50 basis 

points. The MIP rate for Refinancing of 

Health Care Facilities under section 

232/223(a)(7) and 232/223(f) will 

remain at 50 basis points. The MIP rate 

for the following programs without lowincome housing tax credits will also 

remain at 80 basis points: section 

221(d)(3) for Nonprofit and 

Cooperatives for New Construction or 

Rehabilitation, section 223(d) for 

Operating Loss Loans for apartments 

and health care facilities, and section 

241(a) for improvements and additions 

for apartments. 

Loans under section 221(d)(3) without 

LIHTC, section 241(a) for supplemental 

loans for additions or improvements to 

existing apartments without LIHTC, and 

section 223(d) for operating loss loans 

will require a credit subsidy obligation 

in fiscal year 2006. Only nonprofit and 

nonprofit cooperative mortgagors can 

obtain a 100 percent mortgage under 

section 221(d)(3). The nonprofits cannot 

be under the control or influence of 

profit-motivated entities and continue to 

require a HUD Headquarters approval 

prior to issuance of the firm 

commitment. 

Premiums for risk sharing 

applications under sections 542(b) and 

542(c) of the Housing and Community 

Development Act of 1992 will be 

reduced from 50 basis points to 45 basis 

points for those projects where lowincome housing tax credits are part of 

the project financing. This will require 

a revision to the section 542(c) 

regulations at 24 CFR 266.604 and 

renegotiation of section 542(b) 

agreements. Until the regulation change 

is effective and the section 542(b) 

agreements are modified, risk sharing 

premiums remain at 50 basis points for 

risk sharing projects with or without 

low-income housing tax credits. 

The mortgage insurance premiums to 

be in effect for FHA firm commitments 

issued, amended, or reissued in FY 2006 

are shown in the table below: 

Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Notices 51539 

FISCAL YEAR 2006 MIP RATES

[Multifamily Loan program] 

Loan program Basis 

points 

207 Multifamily Housing NC/SR ................................................................................................................................................................ 50 

207 Multifamily Housing NC/SR with LIHTC ............................................................................................................................................ 45 

207 Manufactured Home Parks ................................................................................................................................................................ 50 

207 Manufactured Home Parks with LIHTC ............................................................................................................................................. 45 

213 Cooperatives ...................................................................................................................................................................................... 50 

221(d)(3) Nonprofit/Cooperative mortgagor .............................................................................................................................................. 80 

221(d)(3) Limited dividend with LIHTC ..................................................................................................................................................... 45 

221(d)(4) NC/SR with or without LIHTC ................................................................................................................................................... 45 

232 NC/SR Health Care Facilities ............................................................................................................................................................ 57 

232 NC/SR—Assisted Living Facilities with LIHTC .................................................................................................................................. 45 

220 Urban Renewal Housing with LIHTC ................................................................................................................................................. 45 

220 Urban Renewal Housing without LIHTC ............................................................................................................................................ 50 

231 Elderly Housing .................................................................................................................................................................................. 50 

231 Elderly Housing with LIHTC ............................................................................................................................................................... 45 

207/223(f) Refinance or Purchase for Apartments with or without LIHTC ............................................................................................... * 45 

232/223(f) Refinance for Health Care Facilities without LIHTC ............................................................................................................... * 50 

232/223(f) Refinance for Health Care Facilities with LIHTC .................................................................................................................... * 45 

223(a)(7) Refinance of Apartments with or without LIHTC ...................................................................................................................... 45 

223(a)(7) Refinance of Health Care Facilities without LIHTC .................................................................................................................. 50 

223(a)(7) Refinance of Health Care Facilities with LIHTC ....................................................................................................................... 45 

223d Operating loss loan for Apartments ................................................................................................................................................. 80 

223d Operating loss loan for Health Care Facilities ................................................................................................................................. 80 

241(a) Improvements/additions for Apartments/coop ............................................................................................................................... 80 

241(a) Improvements/additions for Apartments/coop with LIHTC ............................................................................................................ 45 

241(a) Improvements/additions for Health Care Facilities without LIHTC ............................................................................................... 57 

241(a) Improvements/additions for Health Care Facilities with LIHTC .................................................................................................... 45 

242 Hospitals ............................................................................................................................................................................................. 50 

Title XI—Group Practice .............................................................................................................................................................................. 50 

* The first year MIP for these programs will remain at 100 basis points. 

Applicable Mortgage Insurance 

Premium Procedures 

The MIP regulations are found in 24 

CFR part 207. This notice is published 

in accordance with the procedures 

stated in 24 CFR 207.252, 207.252(a), 

and 207.254. 

Transition Guidelines 

A. General 

If a firm commitment has been issued 

at a higher MIP and FHA has not 

initially endorsed the note, the lender 

may request the field office to reprocess 

the commitment at the lower MIP and 

reissue the commitment on or after the 

October 1, 2005 effective date. 

B. Extension of Outstanding Firm 

Commitments 

FHA may extend outstanding firm 

commitments when the Hub/Program 

Center determines that the underwriting 

conclusions (rents, expenses, 

construction costs, mortgage amount 

and case required to close) are still valid 

in accordance with Mortgagee Letter 03–

21, ‘‘FHA Policies for Controlling 

Multifamily Firm Commitments and 

Credit Subsidy,’’ dated December 3, 

2003. 

C. Reprocessing of Outstanding Firm 

Commitments 

FHA will consider requests from 

mortgagees to reprocess outstanding 

firm commitments at the lower mortgage 

insurance premium once the new 

premiums become effective on October 

1, 2005: 

1. Outstanding commitments with 

initial 60-day expiration dates on or 

after the effective date of this MIP 

notice. 

• FHA Multifamily HUD Hub/ 

Program Center staff will simply 

reprocess these cases to reflect the 

impact of the lower MIP and reissue 

commitments with a new date. 

2. Outstanding commitments with 

initial expiration dates prior to the 

effective date of this MIP notice which 

have pending extension requests or have 

had extensions granted by FHA beyond 

the initial 60-day period of the 

commitment. 

• These cases will require more 

extensive reprocessing by FHA staff. 

Reprocessing will include an updated 

FHA field staff analysis and review of 

rents, expenses and construction/ 

rehabilitation costs, particularly 

considering any changes in Davis-Bacon 

wage rates on new/substantial cases and 

cash required to close. An updated 

appraisal and other exhibits may be 

required from the mortgagee depending 

on the age of the appraisal and the age 

of the commitment (See Mortgagee 

Letter 03–21) . If reprocessing results in 

favorable underwriting conclusions, 

Hub/Program Center staff will reissue 

commitments with a new date at the 

new MIP. 

D. Reopening of Expired Firm 

Commitments 

FHA will consider mortgagee’s 

requests, which may be either updated 

traditional application processing (TAP) 

firm commitment applications or 

updated multifamily accelerated 

processing (MAP) applications with 

updated exhibits, to reopen expired 50 

basis points commitments on or after 

October 1, 2005, provided that the 

reopening requests are received within 

90 days of the expiration of the 

commitments and include the $.50 per 

thousand of requested mortgage 

reopening fee. Reopening requests will 

be reprocessed by FHA field staff under 

the instructions in paragraph C.2 above 

and Mortgagee Letter 03–21. 

After expiration of the 90-day 

reopening period, mortgagees are 

required to submit new applications 

with the $3 per thousand application 

fee. 

51540 Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Notices 

Credit Subsidy 

A credit subsidy obligation is required 

for the three sections of the Act listed 

below. If the mortgagor’s equity is 

produced from LIHTC for sections 

221(d)(3) and 241(a), a credit subsidy 

obligation will not be required. 

• Section 221(d)(3) for new 

construction or substantial 

rehabilitation 

• Section 223(d) for operating loss 

loans for both apartments and health 

care facilities 

• Section 241(a) for supplemental 

loans for additions or improvements for 

apartments only. 

Dated: August 18, 2005. 

Brian D. Montgomery, 

Assistant Secretary for Housing—Federal 

Housing Commissioner. 

[FR Doc. 05–17242 Filed 8–29–05; 8:45 am] 

BILLING CODE 4210–27–P