[Federal Register Volume 60, Number 245 (Thursday, December 21, 1995)]
[Rules and Regulations]
[Pages 66476-66477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31076]




[[Page 66475]]

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Part IV





Department of Housing and Urban Development





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Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner



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24 CFR Parts 203 and 206



Home Equity Conversion Mortgage Insurance Demonstration: Streamlining 
the Demonstration and Allowing Use of the Direct Endorsement Program; 
Final Rule

Federal Register / Vol. 60, No. 245 / Thursday, December 21, 1995 / 
Rules and Regulations 

[[Page 66476]]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner

24 CFR Parts 203 and 206

[Docket No. FR-2958-F-03]
RIN 2502-AF32


Home Equity Conversion Mortgage Insurance Demonstration: 
Streamlining the Demonstration and Allowing Use of the Direct 
Endorsement Program

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

ACTION: Final rule.

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SUMMARY: This rule makes final, without substantive changes, the 
interim rule that was promulgated by the Department on August 16, 1995, 
to amend HUD's regulations in 24 CFR parts 203 and 206. The interim 
rule simplified the Home Equity Conversion Mortgage (HECM) Insurance 
Demonstration and expedited the processing of HECMs by permitting use 
of the Direct Endorsement program. The interim rule also implemented 
the statutory disclosure amendments in section 334 of the Cranston-
Gonzalez National Affordable Housing Act and made other changes, 
including technical and clarifying changes, to improve and streamline 
the program based on the first five years of the demonstration. This 
final rule does contain a correction to a technical error in the 
interim rule.

EFFECTIVE DATE: January 22, 1996.

FOR FURTHER INFORMATION CONTACT: Richard K. Manuel, Acting Director, 
Single Family Development Division, Office of Insured Single Family 
Housing, Room number 9272, Department of Housing and Urban Development, 
451 Seventh Street, SW, Washington, DC 20410, telephone (202) 708-2700; 
TDD (202) 708-9300. (These are not toll-free telephone numbers.)

SUPPLEMENTARY INFORMATION: The Home Equity Conversion Mortgage (HECM) 
Insurance Demonstration was authorized by Section 417 of the Housing 
and Community Development Act of 1987 (42 U.S.C. 5301), which amended 
Section 255 of the National Housing Act (12 U.S.C. 1715z-20) to permit 
elderly homeowners to borrow against the equity in their homes. HUD 
published final regulations on June 9, 1989, at 54 FR 24823, issued HUD 
Handbook 4235.1 for the program in August 1989, and immediately began 
processing applications for commitments to insure. The regulations were 
codified at 24 CFR part 206. Revision 1 to HUD Handbook 4235.1 was 
issued in November 1994.
    On August 16, 1995, the Department promulgated an interim rule, at 
60 FR 42754, which reflected ideas for improving the program 
regulations based on experience from the first five years of the 
demonstration. It also reflected HUD's implementation of section 334 of 
the Cranston-Gonzalez National Affordable Housing Act (NAHA) (42 U.S.C. 
12701), regarding additional disclosures to the mortgagor before loan 
closing, including projections of future loan balances and information 
that the mortgagor's liability is limited. The public was given 60 days 
in which to submit comments on the interim rule, and no public comments 
were received. Therefore, this rule makes final the interim rule 
without any substantive changes. This final rule does contain a 
correction to a technical error in the interim rule. The second and 
third sentences of 24 CFR 206.45(b) were inadvertently dropped from the 
Code of Federal Register when an amendment was made to the first 
sentence of that section. This final rule restates those two sentences.

Other Matters

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
which implements section 102(2)(C) of the National Environmental Policy 
Act of 1969 (NEPA). This Finding of No Significant Impact is available 
for public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the 
Office of the Rules Docket Clerk, Office of the General Counsel, 
Department of Housing and Urban Development, Room 10276, 451 Seventh 
Street, SW, Washington, DC 20410.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this final rule before publication and by 
approving it certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities. This final 
rule makes final, without changes, an interim rule that was limited to 
revision of the Home Equity Conversion Mortgage Demonstration. 
Specifically, the requirements of the interim rule were directed to 
making the program more efficient for participating mortgagees, 
mortgagors and the Department.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule will not have substantial direct effects on 
States or their political subdivisions, or the relationship between the 
Federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government. As a result, 
the rule is not subject to review under the Order.

Executive Order 12606, The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this final rule will not 
have potential for significant impact on family formation, maintenance, 
and general well-being, and, thus, is not subject to review under the 
order. No significant change in existing HUD policies or programs will 
result from promulgation of this rule, as those policies and programs 
relate to family concerns.

List of Subjects

24 CFR Part 203

    Hawaiian natives, Home improvement, Indians--lands, Loan programs--
housing and community development, Mortgage insurance, Reporting and 
recordkeeping requirements, Solar energy.

24 CFR Part 206

    Aged, Condominiums, Loan programs--housing and community 
development, Mortgage insurance, Reporting and recordkeeping 
requirements.
    Accordingly, the interim rule published on August 16, 1995, at 60 
FR 42754, is adopted as final, with the following amendment:

PART 206--HOME EQUITY CONVERSION MORTGAGE INSURANCE

    1. The authority citation for part 206 continues to read as 
follows:

    Authority: 12 U.S.C. 1715b, 1715z-200; 42 U.S.C. 3535(d).

    2. In Sec. 206.45, paragraph (b) is revised to read as follows:


Sec. 206.45  Eligible properties.

* * * * *
    (b) Type of property. The property shall include a dwelling 
designed principally as a residence for one family 

[[Page 66477]]
or such additional families as the Secretary shall determine. The 
dwelling may be connected with other dwellings by a party wall or 
otherwise. A condominium unit designed for one-family occupancy shall 
also be an eligible property.
* * * * *
    Dated: November 29, 1995.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 95-31076 Filed 12-20-95; 8:45 am]
BILLING CODE 4210-27-P