66476 Federal Register / Vol. 60, No. 245 / Thursday, December 21, 1995 / Rules and Regulations

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.

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 § 206.45, paragraph (b) is revised

to read as follows:

§ 206.45 Eligible properties.

* * * * *

(b) Type of property. The property

shall include a dwelling designed

principally as a residence for one family
Federal Register / Vol. 60, No. 245 / Thursday, December 21, 1995 / Rules and Regulations 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 onefamily 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]

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