16032 Federal Register / Vol. 60, No. 59 / Tuesday, March 28, 1995 / Rules and Regulations

1HUD has avoided reducing mortgage limits in

response to temporary reductions in local market

prices. Therefore, the focus of this rulemaking is

only on increases to mortgage limits.

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Office of the Assistant Secretary for

Housing—Federal Housing

Commissioner

24 CFR Part 203

[Docket No. R–95–1778; FR–3866–F–01]

RIN 2502–AG47

Single Family Mortgage Limits:

Redelegation of Authority; Final Rule

AGENCY: Office of the Assistant

Secretary for Housing—Federal Housing

Commissioner, HUD.

ACTION: Final rule.

SUMMARY: This final rule amends HUD’s

Single Family Mortgage Insurance

regulations to recognize the redelegation

of the authority to increase Federal

Housing Administration (FHA) single

family maximum mortgage limits and

designate high cost areas. The FHA

Commissioner is redelegating this

authority to certain officials in HUD’s

local offices. This redelegation is

consistent with the primary objectives

of the recent reorganization of HUD’s

Office of Housing, which are to provide

local offices with more direct authority

and to enhance the delivery of services

to clients.

EFFECTIVE DATE: April 27, 1995.

FOR FURTHER INFORMATION CONTACT:

Maynard Curry, Office of Insured Single

Family Housing, Room 9276,

Department of Housing and Urban

Development, 451 Seventh Street, SW,

Washington, DC 20410, telephone (202)

708–2121, or (202) 708–4594 (TDD).

(These numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

Background

Section 203(b)(2) of the National

Housing Act and 24 CFR 203.18(a)(1)

prevent insured mortgages for 1-family

residences from exceeding 95 percent of

the median house price for the area, as

determined by the Secretary. To date,

the determination of the median price is

based on actual sales prices for new and

existing homes. The authority to make

this determination has been delegated to

the Assistant Secretary for HousingFederal Housing Commissioner (the

Commissioner). The Commissioner

issues periodic notices in the Federal

Register announcing the mortgage limits

for each area of the country after

determining the median house price for

each area. A local HUD office can

recommend interim changes for specific

areas based on locally-gathered

information on changes in house prices,

but those changes cannot be announced

without approval by the Commissioner.

HUD has recently been reorganized to

provide more direct authority to its local

offices regarding operation of its

programs. Regulations that reserve to

Headquarters functions that are locallybased, such as the determination of

median house prices in an area, are

inconsistent with the new emphasis on

empowerment of local offices.

HUD is taking two actions to

recognize the reorganization and to

facilitate the timely adjustment of area

mortgage limits in response to

increases 1 in median area house prices.

First, HUD is amending two provisions

in the current regulations (24 CFR

203.18(h) and 203.18b(b)(2)) to provide

greater administrative flexibility

regarding the determination and

announcement of mortgage limits based

on median area house prices. Second,

HUD is preparing a formal delegation of

authority to identify specified officials

in the local offices who are authorized

to determine median area house prices

and the resulting maximum mortgage

amounts. HUD is also publishing this

delegation of authority today as a

separate document.

HUD expects that increases in median

house prices can be determined at the

local level more rapidly than at

Headquarters and with comparable

accuracy. Currently Headquarters staff

makes recommendations to the

Commissioner based on two

approaches. Under the first approach, a

comprehensive review is performed of

median house prices in all areas. This

review occurs from time to time, but

normally no more frequently than

annually. Price data comes from two

sources: the Federal Housing Finance

Board (FHFB) and the WEFA Group, a

private consulting firm. A chart is

prepared for approval by the

Commissioner that shows the maximum

mortgage amount for each area based on

95 percent of the median house price in

the area (subject to a statutory floor and

ceiling on these amounts). The last such

chart was published in the Federal

Register on March 15, 1993 (58 FR

13950).

HUD also has a procedure for

receiving and reviewing local appeals

between publication of the charts with

national updates if ‘‘any party believes

that a mortgage limit established by the

Secretary * * * does not accurately

reflect the median house prices in an

area.’’ 24 CFR 203.18b(a). The party

seeking a change in the mortgage limit

(typically a mortgagee or an

organization of mortgagees or real estate

professionals) must collect and submit

data showing the actual sales prices for

all new and existing homes in the area

over a period of time that varies with

the number of sales involved. This data

goes to the local office, which submits

a recommendation based on the data to

the Commissioner for a final

determination. Once the Commissioner

approves a change in the mortgage limit

for an area based on the change in

median house price, the new mortgage

limit can be made effective through an

administrative announcement to

affected mortgagees in advance of being

included in a Federal Register notice.

Under this final rule, the local appeals

approach will serve as the usual method

leading to mortgage limit increases,

except that local offices may also take

the initiative in generating submissions

of actual sales price data to compensate

for the lack of periodic national updates.

The change in regulations and the

delegation of authority do not prevent

the Commissioner from also approving

appropriate mortgage limit increases

when information available to the

Commissioner indicates that increases

are warranted. The Commissioner may

continue to receive periodic information

on median house prices from national

sources such as FHFB and the WEFA

Group to confirm the accuracy of local

office determinations. The

Commissioner will maintain a national

compilation of mortgage limits for all

areas and may choose to continue

periodic publication of a national

compilation in the Federal Register for

information purposes.

HUD will add a new chapter to HUD

Handbook 4000.2 to ensure that local

offices have adequate instructions on

their new role. These instructions will

cover such matters as appropriate

sources of house sales price data, extra

weight that may be given to new home

sales prices in certain circumstances,

and identification of the pertinent

‘‘area’’ in compliance with the statutory

definition of that term. These

instructions should ensure a high degree

of consistency in approach among the

different local offices.

Justification for Final Rulemaking

In general, HUD publishes a rule for

public comment before issuing a rule for

effect, in accordance with its own

regulations on rulemaking in 24 CFR

part 10. However, part 10 provides an

exception from that general rule with

respect to rules governing HUD’s

organization or its own internal

practices or procedures. This final rule
Federal Register / Vol. 60, No. 59 / Tuesday, March 28, 1995 / Rules and Regulations 16033

is limited to a revision of the respective

roles of the Commissioner and the local

offices and therefore qualifies for the

exception.

Other Matters

Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)), has reviewed this rule before

publication and by approving it certifies

that this rule does not have a significant

economic impact on a substantial

number of small entities. The

redelegation of authority implemented

by this rule is a matter of HUD’s internal

practices or procedures, and it will not

have an impact on small entities.

Environmental Impact

In accordance with 40 CFR 1508.4 of

the regulations of the Council on

Environmental Quality and 24 CFR

50.20(k) of the HUD regulations, the

policies and procedures contained in

this rule relate only to delegations of

authority and therefore are categorically

excluded from the requirements of the

National Environmental Policy Act.

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. The

redelegation of authority implemented

by this rule is a matter of HUD’s internal

practices or procedures. 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 rule does 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.

Regulatory Agenda

This rule was not listed in HUD’s

Semiannual Agenda of Regulations

published on November 14, 1994 (59 FR

57632) in accordance with Executive

Order 12866 and the Regulatory

Flexibility Act.

List of Subjects in 24 CFR Part 203

Hawaiian Natives, Home

improvement, Indians—lands, Loan

programs—housing and community

development, Mortgage insurance,

Reporting and recordkeeping

requirements, Solar energy.

Accordingly, HUD amends 24 CFR

part 203 as follows:

PART 203—SINGLE FAMILY

MORTGAGE INSURANCE

1. The authority citation for part 203

is revised to read as follows:

Authority: 12 U.S.C. 1709, 1710, 1715b,

and 1715u; 42 U.S.C. 3535(d).

2. In § 203.18, paragraph (h) is revised

to read as follows:

§ 203.18 Maximum mortgage amounts.

* * * * *

(h) Notice of maximum mortgage

amount. A maximum mortgage amount

based on the 1-family median house

price for an area under paragraph (a)(1)

of this section may be made effective by:

(1) Providing direct notice to affected

mortgagees through an administrative

issuance; or

(2) Publishing a notice in the Federal

Register.

§ 203.18b [Amended]

3. In § 203.18b, paragraph (b)(2) is

amended by removing the second

sentence.

Dated: March 20, 1995.

Nicolas P. Retsinas,

Assistant Secretary for Housing—Federal

Housing Commissioner.

[FR Doc. 95–7552 Filed 3–27–95; 8:45 am]

BILLING CODE 4210–27–P