28632 Federal Register / Vol. 75, No. 98 / Friday, May 21, 2010 / Notices 

report on multiple open grants in each 

APR, thereby improving data quality 

and reducing reporting burden. In 

compliance with requirements of 5 CFR 

1320.13, the agency cannot reasonably 

comply with the normal clearance 

procedures under this part because the 

statutory changes accelerate the 

submission of the IHP starting in fiscal 

year 2011. With implementation of the 

statutory changes, the IHP is due 75 

days prior to the beginning of the 

grantee’s fiscal year. For grantees with a 

fiscal year beginning in October 1, 2010, 

the revised IHP will be due July 16, 

2010. 

Title of Proposed Notice: Indian 

Housing Block Grant Program 

(Combined Indian Housing Plan and 

Annual Performance Reporting 

Requirements). 

Description of Information Collection: 

This is a revision of a previously 

approved information collection. The 

Department of Housing and Urban 

Development is seeking emergency 

review of the Paperwork Reduction Act 

requirements associated with HUD’s 

proposed combined IHP/APR. The 

combined reporting format will simplify 

the reporting process, improve the 

quality of data submitted annually, and 

reduce the annual burden for recipients 

IHBG funds. As a result, HUD will 

receive improved reporting data for 

monitoring a recipient’s performance 

and determining program compliance. 

OMB Control Number: 2577–0218. 

Agency Form Numbers: HUD–52735, 

HUD–52735–AS. (This revision 

modifies and combines both the HUD– 

52735 and 52735–AS and requests that 

the revised combined form be assigned 

a new form number or letter 

designation. Prior editions of the HUD– 

52735 should become obsolete. The 

HUD–52735–AS will need to be used for 

approximately three more years.) 

Members of Affected Public: Tribes 

and tribally designated housing entities. 

Estimation of the total numbers of 

hours needed to prepare the information 

collection including number of 

respondents, frequency of responses, 

and hours of responses: The estimated 

number of respondents is 366; the 

frequency of response is once per year; 

and the total reporting burden will 

reduce significantly from the current 

total reporting time of 93,308 hours to 

52,941 hours. 

Authority: The Paperwork Reduction Act 

of 1995, 44 U.S.C. Chapter 35, as amended. 

Dated: May 17, 2010. 

Leroy McKinney, Jr., 

Departmental Reports Management Officer, 

Office of the Chief Information Officer. 

[FR Doc. 2010–12221 Filed 5–20–10; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5397–N–01] 

RIN 2502–ZA05 

Federal Housing Administration 

(FHA)—Temporary Exemption From 

Compliance With FHA’s Regulation on 

Property Flipping 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Notice. 

SUMMARY: This notice announces that 

FHA has waived its regulation that 

prohibits the use of FHA financing to 

purchase properties that are being 

resold within 90 days of the previous 

acquisition. Prior to the waiver of this 

regulation, which took effect for all sales 

contracts executed on or after February 

1, 2010, a mortgage was not eligible for 

FHA insurance if the contract of sale for 

the purchase of the property that is the 

subject of the mortgage is executed 

within 90 days of the prior acquisition 

by the seller and the seller does not 

come under any of the exemptions to 

this 90-day period that are specified in 

the regulation. During this period of 

high foreclosures, FHA seeks to 

encourage investors that specialize in 

acquiring and renovating properties to 

renovate foreclosed and abandoned 

homes with the objective of increasing 

the availability of affordable homes for 

first-time and other purchasers and 

helping to stabilize real estate prices as 

well as neighborhoods and communities 

where foreclosure activity has been 

high. While the waiver is granted for the 

purpose of stimulating rehabilitation of 

foreclosed and abandoned homes, the 

waiver is applicable to all properties 

being resold within the 90-day period 

after prior acquisition, and is not 

limited to foreclosed properties. 

The waiver, however, has conditions, 

and eligible mortgages must meet the 

conditions specified in this notice. 

Additionally, the waiver is not 

applicable to mortgages insured under 

HUD’s Home Equity Conversion 

Mortgage (HECM) Program. 

Although the waiver is currently in 

effect, HUD seeks comments from 

industry, potential purchasers, and 

other interested members of the public 

on the conditions which must be met for 

the waiver to be provided. Comments 

will be taken into consideration in 

determining whether any modifications 

should be made to the waiver eligibility 

conditions. 

DATES: Effective Date: February 1, 2010 

through February 1, 2011. 

Comment Due Date. June 21, 2010. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this rule to the Regulations Division, 

Office of General Counsel, 451 7th 

Street, SW., Room 10276, Department of 

Housing and Urban Development, 

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 

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. 

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 advance 

appointment to review the public 

comments must be scheduled by calling 

the Regulations Division at 202–708– 

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

Individuals with speech or hearing 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 98 / Friday, May 21, 2010 / Notices 28633 

impairments may access this number 

through TTY by calling the Federal 

Information Relay Service at 800–877– 

8339. Copies of all comments submitted 

are available for inspection and 

downloading at http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Margaret E. Burns, Director, Office of 

Single Family Program Development, 

Office of Housing, Department of 

Housing and Urban Development, 451 

7th Street, SW., Washington, DC 20410– 

8000; telephone number 202–708–2121 

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

with hearing or speech impairments 

may access this number through TTY by 

calling the toll-free Federal Information 

Relay Service at 800–877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 203.37a(b)(2) of HUD’s 

regulations (24 CFR 203.37a(b)(2)) 

establishes FHA’s rule on property 

flipping and this section provides that 

FHA will not insure a mortgage for a 

property if the contract of sale is 

executed within 90 days of the 

acquisition of the property by the seller. 

Section 203.37a(c) lists the sales 

transactions that are exempt from this 

rule. The exempt transactions include, 

for example, sales by HUD of real estateowned (REO) properties under HUD’s 

regulations in 24 CFR part 291, sales by 

another federal agency of REO 

properties, sales of properties by 

nonprofit organizations that have been 

approved to purchase and resell HUD 

REO properties, and sales by state- and 

federally-charted financial institutions 

and government sponsored enterprises, 

to name a few. 

Property ‘‘flipping’’ refers to the 

practice whereby a property recently 

acquired is resold for a considerable 

profit with an artificially inflated value, 

often the result of a lender’s collusion 

with the appraiser. Most property 

flipping occurs within a matter of days 

after acquisition, and usually with only 

minor cosmetic improvements, if any. In 

an effort to preclude this predatory 

lending practice with respect to 

mortgages insured by FHA, HUD issued 

a final rule on May 1, 2003 (68 FR 

23370) that provides in 24 CFR 203.37a 

that FHA will not insure a mortgage if 

the contract of sale for the purchase of 

the property that is the subject of the 

mortgage is executed within 90 days of 

the prior acquisition by the seller and 

the seller does not come under any of 

the exemptions to this 90-day period 

that are specified in § 203.37a(c). In a 

final rule published on June 7, 2006 (71 

FR 33138), HUD expanded the 

exceptions contained in § 203.37a(c) to 

the 90-day time restrictions to include 

such transactions as sales of single 

family properties by governmentsponsored enterprises (GSEs), state- and 

federally-chartered financial 

institutions, nonprofits organizations 

approved to purchase HUD Real EstateOwned (REO) single family properties at 

a discount with resale restrictions, local 

and state governments and their 

instrumentalities, and, upon 

announcement by HUD through 

issuance of a notice, sales of properties 

in areas designated by the President as 

federal disaster areas. 

The downturn in the housing market 

over the last two years has seen a rapid 

rise of homeowners defaulting on 

mortgages and consequently a rise in 

foreclosed homes. A variety of measures 

to avoid foreclosures have been initiated 

at the federal, state and local level, most 

notably the Administration’s Home 

Affordable Modification Program. 

Despite these efforts to keep families in 

their homes, foreclosures remain high 

and not only do foreclosures affect the 

families that lost their homes, but they 

affect neighborhoods and communities. 

While HUD continues its efforts to help 

homeowners remain in their homes, 

through waiver of its regulation on 

property flipping, HUD seeks to help 

stabilize neighborhoods and 

communities. 

HUD undertook similar waiver action 

in a narrower context in 2009, regarding 

HUD’s Neighborhood Stabilization 

Program (NSP). NSP, a temporary 

program authorized by the Housing and 

Economic Recovery Act 2008 (Pub. L. 

110–289, approved July 30, 2008), was 

established for the purpose of stabilizing 

communities that have suffered from 

foreclosures and abandonment, by 

allocating funds through a formula to 

States and units of general local 

government, for the purchase and 

redevelopment of foreclosed and 

abandoned homes and residential 

properties. HUD’s waiver of its 

regulation on property flipping for NSP 

removed an impediment to the purchase 

of affordable homes that had been 

rehabilitated and sold under this 

program. With the home foreclosure rate 

remaining high across the nation, HUD 

has determined that a temporary waiver 

of this regulation on a nationwide basis, 

subject to certain conditions, may 

contribute to stabilizing real estate 

prices and neighborhoods that have 

been heavily impacted by foreclosures. 

The waiver of the regulation may 

facilitate the sale and occupancy of 

foreclosed homes that have been 

rehabilitated by making the mortgages of 

such homes eligible for FHA mortgage 

insurance. Again, however, while the 

waiver is granted for the purpose of 

stimulating rehabilitation of foreclosed 

and abandoned homes, the waiver is 

applicable to all properties being resold 

within the 90-day period after prior 

acquisition. The waiver is not limited to 

the resale of foreclosed properties. 

II. Eligibility for Waiver of 24 CFR 

203.37a(b)(2) 

To be eligible for the waiver of the 

Property Flipping Rule, an FHAapproved mortgagee must meet the 

following conditions: 

1. All transactions must be armslength, with no identity of interest 

between the buyer and seller or other 

parties participating in the sales 

transaction. Some ways that the lender 

can ensure that there is no inappropriate 

collusion or agreement between parties, 

are to assess and determine the 

following: 

a. The seller holds title to the 

property; 

b. Limited liability companies, 

corporations, or trusts that are serving as 

sellers were established and are 

operated in accordance with applicable 

state and federal law; 

c. No pattern of previous flipping 

activity exists for the subject property as 

evidenced by multiple title transfers 

within a 12 month time frame (chain of 

title information for the subject property 

can be found in the appraisal report); 

d. The property was marketed openly 

and fairly, through a multiple listing 

service (MLS), auction, for sale by 

owner offering, or developer marketing 

(any sales contracts that refer to an 

‘‘assignment of contract of sale,’’ which 

represents a special arrangement 

between seller and buyer may be a red 

flag). 

2. In cases in which the sales of the 

property is greater than 20 percent 

above the seller’s acquisition cost, an 

FHA-approved mortgagee is eligible for 

the waiver only if, the mortgagee: 

a. Justifies the increase in value by 

retaining in the loan file supporting 

documentation and/or a second 

appraisal, which verifies that the seller 

has completed sufficient legitimate 

renovation, repair, and rehabilitation 

work on the subject property to 

substantiate the increase in value or, in 

cases where no such work is performed, 

the appraiser provides appropriate 

explanation of the increase in property 

value since the prior title transfer; and 

b. Orders a property inspection and 

provides the inspection report to the 

purchaser before closing. The mortgagee 

may charge the borrower for this 

inspection. The use of FHA-approved 

inspectors or 203(k) consultants is not 


emcdonald on DSK2BSOYB1PROD with NOTICES
28634 Federal Register / Vol. 75, No. 98 / Friday, May 21, 2010 / Notices 

required. The inspector must have no 

interest in the property or relationship 

with the seller, and must not receive 

compensation for the inspection for any 

party other than the mortgagee. 

Additionally, the inspector may not: 

compensate anyone for the referral of 

the inspection; receive any 

compensation for referring or 

recommending contractors to perform 

any repairs recommended by the 

inspection; or be involved with 

performing any repairs recommended 

by the inspection. At a minimum, the 

inspection must include: 

i. The property structure, including 

the foundation, floor, ceiling, walls and 

roof; 

ii. The exterior, including siding, 

doors, windows, appurtenant structures 

such as decks and balconies, walkways 

and driveways. 

iii The roofing, plumbing systems, 

electrical systems, heating and air 

conditioning systems; 

iv. All interiors; and 

v. All insulation and ventilation 

systems, as well as fireplaces and solid 

fuel-burning appliances. 

3. Only forward mortgages are eligible 

for the waiver. Mortgages insured under 

HUD’s HECM program are ineligible for 

the waiver. 

III. Compliance With the Paperwork 

Reduction Act 

The information collection 

requirements applicable to this waiver 

have been submitted to the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520) and assigned 

OMB Control No. 2502–0059. 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. 

IV. Period of Waiver Eligibility 

This waiver announced by this notice 

became effective February 1, 2010, and 

shall expire for all sales contract entered 

into after February 1, 2011, unless 

extended or withdrawn by HUD. By 

notice, HUD shall notify the public of 

any extension or withdrawal of this 

waiver. If as a result of this waiver, there 

is a significant increase in defaults on 

FHA-insured mortgages and an increase 

in mortgage insurance claims that are 

attributable to mortgages insured as a 

result of exercise of this waiver 

authority, HUD may withdraw this 

waiver immediately. 

V. Solicitation of Public Comments 

HUD welcomes comments on the 

conditions specified in this notice for 

eligibility for waiver of its regulation on 

property flipping. As stated in the 

Summary, comments will be taken into 

consideration in determining whether 

any modifications should be made to 

the waiver eligibility conditions. 

Dated: May 12, 2010. 

David H. Stevens, 

Assistant Secretary for Housing— Federal 

Housing Commissioner. 

[FR Doc. 2010-12148 Filed 5-20-10; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5375–N–19] 

Federal Property Suitable as Facilities 

To Assist the Homeless 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, HUD. 

ACTION: Notice. 

SUMMARY: This Notice identifies 

unutilized, underutilized, excess, and 

surplus Federal property reviewed by 

HUD for suitability for possible use to 

assist the homeless. 

FOR FURTHER INFORMATION CONTACT: 

Kathy Ezzell, Department of Housing 

and Urban Development, 451 Seventh 

Street, SW., Room 7266, Washington, 

DC 20410; telephone (202) 708–1234; 

TTY number for the hearing- and 

speech-impaired (202) 708–2565 (these 

telephone numbers are not toll-free), or 

call the toll-free Title V information line 

at 800–927–7588. 

SUPPLEMENTARY INFORMATION: In 

accordance with 24 CFR part 581 and 

section 501 of the Stewart B. McKinney 

Homeless Assistance Act (42 U.S.C. 

11411), as amended, HUD is publishing 

this Notice to identify Federal buildings 

and other real property that HUD has 

reviewed for suitability for use to assist 

the homeless. The properties were 

reviewed using information provided to 

HUD by Federal landholding agencies 

regarding unutilized and underutilized 

buildings and real property controlled 

by such agencies or by GSA regarding 

its inventory of excess or surplus 

Federal property. This Notice is also 

published in order to comply with the 

December 12, 1988 Court Order in 

National Coalition for the Homeless v. 

Veterans Administration, No. 88–2503– 

OG (D.D.C.). 

Properties reviewed are listed in this 

Notice according to the following 

categories: Suitable/available, suitable/ 

unavailable, suitable/to be excess, and 

unsuitable. The properties listed in the 

three suitable categories have been 

reviewed by the landholding agencies, 

and each agency has transmitted to 

HUD: (1) Its intention to make the 

property available for use to assist the 

homeless, (2) its intention to declare the 

property excess to the agency’s needs, or 

(3) a statement of the reasons that the 

property cannot be declared excess or 

made available for use as facilities to 

assist the homeless. 

Properties listed as suitable/available 

will be available exclusively for 

homeless use for a period of 60 days 

from the date of this Notice. Where 

property is described as for ‘‘off-site use 

only’’ recipients of the property will be 

required to relocate the building to their 

own site at their own expense. 

Homeless assistance providers 

interested in any such property should 

send a written expression of interest to 

HHS, addressed to Theresa Rita, 

Division of Property Management, 

Program Support Center, HHS, room 

5B–17, 5600 Fishers Lane, Rockville, 

MD 20857; (301) 443–2265. (This is not 

a toll-free number.) HHS will mail to the 

interested provider an application 

packet, which will include instructions 

for completing the application. In order 

to maximize the opportunity to utilize a 

suitable property, providers should 

submit their written expressions of 

interest as soon as possible. For 

complete details concerning the 

processing of applications, the reader is 

encouraged to refer to the interim rule 

governing this program, 24 CFR part 

581. 

For properties listed as suitable/to be 

excess, that property may, if 

subsequently accepted as excess by 

GSA, be made available for use by the 

homeless in accordance with applicable 

law, subject to screening for other 

Federal use. At the appropriate time, 

HUD will publish the property in a 

Notice showing it as either suitable/ 

available or suitable/unavailable. 

For properties listed as suitable/ 

unavailable, the landholding agency has 

decided that the property cannot be 

declared excess or made available for 

use to assist the homeless, and the 

property will not be available. 

Properties listed as unsuitable will 

not be made available for any other 

purpose for 20 days from the date of this 

Notice. Homeless assistance providers 

interested in a review by HUD of the 

determination of unsuitability should 

call the toll free information line at 1– 

800–927–7588 for detailed instructions 

or write a letter to Mark Johnston at the 

address listed at the beginning of this 

Notice. Included in the request for 


emcdonald on DSK2BSOYB1PROD with NOTICES