61660 Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations 

of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681). 

The interim rule should have a 

positive effect on families by clarifying 

the coverage rules for mortgage 

servicing accounts, which contain, for 

some period of time, the mortgage 

payments from borrowers. 

VII. Small Business Regulatory 

Enforcement Fairness Act 

The Office of Management and Budget 

has determined that the interim rule is 

not a ‘‘major rule’’ within the meaning 

of the relevant sections of the Small 

Business Regulatory Enforcement Act of 

l996 (‘‘SBREFA’’) (5 U.S.C. 801 et seq.). 

As required by SBREFA, the FDIC will 

file the appropriate reports with 

Congress and the General Accounting 

Office so that the interim rule may be 

reviewed. 

List of Subjects in 12 CFR Part 330 

Bank deposit insurance, Banks, 

banking, Reporting and recordkeeping 

requirements, Savings and loan 

associations, Trusts and trustees. 

■ For the reasons stated above, the 

Board of Directors of the Federal 

Deposit Insurance Corporation amends 

part 330 of chapter III of title 12 of the 

Code of Federal Regulations as follows: 

PART 330—DEPOSIT INSURANCE 

COVERAGE 

■ 1. The authority citation for part 330 

continues to read as follows: 

Authority: 12 U.S.C. 1813(l), 1813(m), 

1817(i), 1818(q), 1819 (Tenth), 1820(f), 

1821(a), 1822(c). 

■ 2. In § 330.1, paragraph (n) is revised 

to read as follows: 

§ 330.1 Definitions. 

* * * * * 

(n) Standard maximum deposit 

insurance amount, referred to as the 

‘‘SMDIA’’ hereafter, means $250,000 

from October 3, 2008, until December 

31, 2009. Effective January 1, 2010, the 

SMDIA means $100,000 adjusted 

pursuant to subparagraph (F) of section 

11(a)(1) of the FDI Act (12 U.S.C. 

1821(a)(1)(F)). All examples in this part 

use $100,000 as the SMDIA. 

* * * * * 

■ 3. In § 330.7, paragraph (d) is revised 

to read as follows: 

§ 330.7 Account held by an agent, 

nominee, guardian, custodian or 

conservator. 

* * * * * 

(d) Mortgage servicing accounts. 

Accounts maintained by a mortgage 

servicer, in a custodial or other 

fiduciary capacity, which are comprised 

of payments by mortgagors of principal 

and interest, shall be insured for the 

cumulative balance paid into the 

account by the mortgagors, up to a limit 

of the SMDIA per mortgagor. Accounts 

maintained by a mortgage servicer, in a 

custodial or other fiduciary capacity, 

which are comprised of payments by 

mortgagors of taxes and insurance 

premiums shall be added together and 

insured in accordance with paragraph 

(a) of this section for the ownership 

interest of each mortgagor in such 

accounts. This provision is effective as 

of October 10, 2008, for all existing and 

future mortgage servicing account. 

* * * * * 

By order of the Board of Directors. 

Dated at Washington DC., this 10th day of 

October 2008. 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

[FR Doc. E8–24626 Filed 10–16–08; 8:45 am] 

BILLING CODE 6714–01–P 

FEDERAL HOUSING FINANCE BOARD 

12 CFR Part 951 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Part 1291 

RIN 2590–AA04 

Affordable Housing Program 

Amendments: Federal Home Loan 

Bank Mortgage Refinancing Authority 

AGENCY: Federal Housing Finance 

Agency. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: The Federal Housing Finance 

Agency (FHFA) is issuing and seeking 

comment on an interim final rule to 

implement section 1218 of the Housing 

and Economic Recovery Act of 2008 

(Recovery Act), which requires the 

FHFA to allow the Federal Home Loan 

Banks (Banks) until July 30, 2010, to use 

Affordable Housing Program (AHP) 

homeownership set-aside funds to 

refinance low- or moderate-income 

households’ mortgage loans. This 

rulemaking relocates the AHP regulation 

to the FHFA rules, and adds new 

provisions that allow the Banks to use 

AHP set-aside funds to provide direct 

subsidies to low- or moderate-income 

households who qualify for refinancing 

assistance under the HOPE for 

Homeowners Program established by 

the Federal Housing Administration 

(FHA) under Title IV of the Recovery 

Act. 

ADDRESSES: This interim final rule is 

effective October 17, 2008. The FHFA 

will accept written comments on the 

interim final rule on or before December 

16, 2008. 

Comments: Submit comments to the 

FHFA using any one of the following 

methods: 

E-mail: comments@fhfb.gov. Please 

include RIN 2590–AA04 in the subject 

line of the message. 

Fax: 202–408–2580. 

Mail/Hand Delivery: Federal Housing 

Finance Board, 1625 Eye Street, NW., 

Washington, DC 20006, Attention: 

Public Comments/RIN 2590–AA04. 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. If 

you submit your comment to the 

Federal eRulemaking Portal, please also 

send it by e-mail to the FHFA at 

comments@fhfb.gov to ensure timely 

receipt by the agency. Include the 

following information in the subject line 

of your submission: Federal Housing 

Finance Agency. Interim Final Rule: 

Affordable Housing Program 

Amendments: Federal Home Loan Bank 

Mortgage Refinancing Authority. RIN 

2590–AA04. 

We will post all public comments we 

receive without change, including any 

personal information you provide, such 

as your name and address, on the FHFA 

Web site at http://www.fhfb.gov/ 

Default.aspx?Page=93&Top=93. 

FOR FURTHER INFORMATION CONTACT: 

Sylvia Martinez, Senior Policy Analyst, 

202–408–2825, martinezs@fhfb.gov; or 

Amy Bogdon, Senior Advisor, 202–408– 

2546, bogdona@fhfb.gov. For legal 

questions: Sharon B. Like, Senior 

Attorney-Advisor, 202–408–2930, 

likes@fhfb.gov. You can send regular 

mail to the Federal Housing Finance 

Board, 1625 Eye Street, NW., 

Washington, DC 20006. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Federal Housing Finance Regulatory 

Reform Act of 2008 

Effective July 30, 2008, Division A of 

the Housing and Economic Recovery 

Act of 2008, Public Law No. 110–289, 

122 Stat. 2654 (2008), titled the Federal 

Housing Finance Regulatory Reform Act 

of 2008 (Reform Act), created the 

Federal Housing Finance Agency 

(FHFA) as an independent agency of the 

federal government. The Reform Act 


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1 In addition to the discretionary set-aside 

authority, the AHP regulation requires that each 

Bank establish a competitive application program 

under which the Bank’s members may apply for 

AHP subsidies pursuant to eligibility requirements 

and scoring criteria set forth in the regulation and 

implemented through Bank policies. See 12 CFR 

1291.5. 

transferred the supervisory and 

oversight responsibilities over the 

Federal National Mortgage Association 

(Fannie Mae), Federal Home Loan 

Mortgage Corporation (Freddie Mac) 

(collectively, Enterprises), the Federal 

Home Loan Banks (Banks), and the Bank 

System’s Office of Finance, from the 

Office of Federal Housing Enterprise 

Oversight (OFHEO) and the Federal 

Housing Finance Board (FHFB) to the 

FHFA. The Reform Act provides for the 

abolishment of OFHEO and the FHFB 

one year after the date of enactment. 

The FHFA is responsible for ensuring 

that the Enterprises and the Banks 

operate in a safe and sound manner, 

including being capitalized adequately, 

and carry out their public policy 

missions, including fostering liquid, 

efficient, competitive, and resilient 

national housing finance markets. 

The Enterprises and the Banks 

continue to operate under regulations 

promulgated by OFHEO and the FHFB 

until the FHFA issues its own 

regulations. 

B. The Banks’ Affordable Housing 

Program 

Section 10(j) of the Federal Home 

Loan Bank Act (Bank Act) requires each 

Bank to establish an affordable housing 

program, the purpose of which is to 

enable a Bank’s members to finance 

homeownership by households with 

incomes at or below 80 percent of the 

area median income (low- or moderateincome households), and to finance the 

purchase, construction, or rehabilitation 

of rental projects in which at least 20 

percent of the units will be occupied by 

and affordable for households earning 

50 percent or less of the area median 

income (very low-income households). 

See 12 U.S.C. 1430(j)(1) and (2). The 

Bank Act requires each Bank to 

contribute 10 percent of its previous 

year’s net earnings to its AHP annually, 

subject to a minimum annual combined 

contribution by the 12 Banks of $100 

million. See 12 U.S.C. 1430(j)(5)(C). 

Section 1218 of the Reform Act 

amended section 10(j) by adding a new 

paragraph (2)(C) that requires the FHFA 

to allow the Banks until July 30, 2010, 

to use AHP homeownership set-aside 

funds to refinance low- or moderateincome households’ first mortgage loans 

on their primary residences. See 12 

U.S.C. 1430(j)(2)(C). The Director of the 

FHFA must establish the percentage of 

set-aside funds eligible for this use by 

regulation. 

The FHFB regulation implementing 

the AHP provisions of the Bank Act, 

previously codified at 12 CFR part 951, 

is relocated by this rulemaking to part 

1291. The following discussion uses the 

new numbering references. Among 

other things,1 the AHP regulation 

authorizes a Bank, in its discretion, to 

set aside a portion of its annual required 

AHP contribution to establish 

homeownership set-aside programs for 

the purpose of promoting 

homeownership for low- or moderateincome households. See 12 CFR 1291.6. 

Under the homeownership set-aside 

programs, a Bank may provide AHP 

direct subsidy (grants) to members to 

pay for down payment assistance, 

closing costs, and counseling costs in 

connection with a household’s purchase 

of its primary residence, and for 

rehabilitation assistance in connection 

with a household’s rehabilitation of an 

owner-occupied residence. See 12 CFR 

1291.6(c)(4). The AHP regulation does 

not authorize the Banks to use AHP setaside funds for refinancing of mortgages. 

Currently, a Bank may allocate up to the 

greater of $4.5 million or 35 percent of 

its annual required AHP contribution to 

homeownership set-aside programs in 

that year, provided that at least onethird of the Bank’s annual set-aside 

allocation is targeted to first-time 

homebuyers. See 12 CFR 1291.2(b)(2)(i). 

In January 2008, the FHFB waived 

certain provisions of the AHP 

homeownership set-aside program rule 

to allow the Federal Home Loan Bank of 

San Francisco (San Francisco Bank) to 

establish a temporary pilot program to 

provide AHP direct subsidy to enable a 

household with a subprime or 

nontraditional loan held by a San 

Francisco Bank member or its affiliate to 

refinance or restructure the loan into an 

affordable, long-term fixed-rate 

mortgage. See FHFB Resolution 2008–01 

(Jan. 15, 2008). The authority will expire 

on December 31, 2009. In April 2008, 

the FHFB published a proposed rule 

that would have temporarily extended 

the authority to use set-aside funds for 

mortgage refinancing or restructuring to 

all of the Banks. See 73 FR 20552 (Apr. 

16, 2008). The FHFB received 36 

comments on the proposal. Commenters 

who supported use of AHP funds for 

refinancing suggested flexibility in the 

rules governing use of the funds so the 

Banks and their members would be able 

to assist a greater number of borrowers 

in distress, including allowing use of 

AHP set-aside funds in conjunction 

with other federal, state or local 

mortgage refinancing programs. 

Before the FHFB took final action on 

the proposed amendments to the AHP 

rule, the Reform Act added section 

10(j)(2)(C) to the Bank Act. Title IV of 

the Recovery Act also required 

establishment by the FHA of the HOPE 

for Homeowners Program, a temporary 

program expected to be implemented by 

October 1, 2008, and which will expire 

on September 30, 2011. Participation in 

the HOPE for Homeowners Program is 

voluntary on the part of homeowners 

and existing loan holders. Under the 

HOPE for Homeowners Program, FHAapproved lenders may refinance loans 

that will qualify for FHA insurance if 

the amount of the loan is reduced to no 

more than 90 percent of the currently 

appraised value of the owner-occupied 

property. The FHA insurance premium, 

which equals 3 percent of the remaining 

principal, is deducted upfront. The 

borrower will pay an annual premium 

of 1.5 percent of the outstanding 

mortgage amount. 

The purpose of the HOPE for 

Homeowners Program, like that of the 

Banks’ refinancing authority under the 

AHP, is to assist distressed homeowners 

and support long-term affordable 

homeownership. The FHFA believes 

that use of AHP subsidy in conjunction 

with the HOPE for Homeowners 

Program will leverage and enhance the 

effectiveness of each program, ensure 

that the full range of federal assistance 

to affected homeowners is available 

quickly, and provide the flexibility that 

the Banks and their members need to 

make the AHP refinancing program 

successful. In adopting this approach, 

the FHFA has consulted with the FHA. 

Linking the use of the AHP subsidy to 

refinancing under the HOPE for 

Homeowners Program also would be 

consistent with the requirement in 

section 10(j)(9)(G) of the Bank Act that 

the AHP rule coordinate AHP activities 

with other federal or federallysubsidized affordable housing activities 

to the maximum extent possible. See 12 

U.S.C. 1430(j)(9)(G). Accordingly, this 

interim final rule authorizes a Bank, in 

its discretion, to temporarily establish a 

homeownership set-aside program for 

the use of AHP direct subsidy by its 

members to assist in the refinancing of 

a household’s mortgage loan under the 

FHA’s HOPE for Homeowners Program. 

Section 1201 of the Reform Act 

requires the Director of the FHFA to 

consider the differences between the 

Banks and the Enterprises in 

rulemakings that affect the Banks with 

respect to the Banks’ cooperative 

ownership structure, mission of 

providing liquidity to members, 

affordable housing and community 

development mission, capital structure, 


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and joint and several liability. 12 U.S.C. 

4513(f). In preparing the interim final 

rule, the Director considered these 

factors and determined that the rule is 

appropriate, particularly because the 

AHP regulation implements a statutory 

provision of the Bank Act that applies 

only to the Banks. See 12 U.S.C. 1430(j). 

II. Analysis of the Interim Final Rule 

A. Relocation of AHP Rule to Part 1291 

The interim final rule relocates the 

AHP rule from part 951 of the FHFB 

regulations to part 1291 of the FHFA 

regulations, and renames the new part 

to read ‘‘Federal Home Loan Banks’ 

Affordable Housing Program’’. The rule 

also renumbers references within the 

rule to reflect its new part number. 

B. Authority To Establish Mortgage 

Refinancing Program: § 1291.6(f)(1) 

The interim final rule adds a new 

paragraph (f) under the existing AHP 

homeownership set-aside program 

provisions of § 1291.6 of the AHP 

regulation, that authorizes a Bank, in its 

discretion, to temporarily establish a 

homeownership set-aside program for 

the use of AHP direct subsidy by its 

members to assist in the refinancing of 

a household’s mortgage loan under 

FHA’s HOPE for Homeowners Program. 

12 CFR 1291.6(f). As a general 

proposition, any such new refinancing 

program must comply with the existing 

requirements in § 1291.6, except for 

certain specified provisions, as well as 

with the requirements of part 1291. 

Thus, the existing provisions in § 1291.6 

governing eligible member applicants, 

member allocation criteria, household 

income eligibility, maximum subsidy 

per household limit of $15,000, de 

minimis cash backs, application 

approvals, funding procedures, 

reservation of subsidies, and progress 

towards use of the subsidy, all apply to 

a Bank’s mortgage refinancing program. 

See 12 CFR 1291.6(b), (c)(1), (c)(2)(i), 

(c)(3), (c)(9), (d), (e). Similarly, a Bank’s 

mortgage refinancing program must 

otherwise meet the requirements of part 

1291, including the monitoring, 

remedial actions for member 

noncompliance, and agreements 

provisions in §§ 1291.7, 1291.8, and 

1291.9, respectively, other than the 

requirement in § 1291.9(a)(7) for fiveyear retention agreements in connection 

with a household’s subsequent sale or 

refinancing of the unit. 

The interim final rule provides that 

the provisions in § 1291.6 governing 

household completion of a counseling 

program, first-time homebuyer and 

additional discretionary household 

eligibility criteria, eligible uses of AHP 

subsidy, five-year retention agreements, 

lender financial or other concessions, 

loan financing costs, and counseling 

costs requirements, all do not apply to 

the new refinancing programs. See 12 

CFR 1291.6(c)(2)(ii), (c)(2)(iii), (c)(4)– 

(c)(8). 

C. Funding Allocation: § 1291.2(b)(2)(i) 

In order to maximize the Banks’ role 

in responding to the current national 

mortgage crisis, the interim final rule 

allows a Bank to allocate the maximum 

permissible homeownership set-aside 

allocation entirely to a mortgage 

refinancing program established under 

new paragraph (f). See 12 CFR 

1291.2(b)(2)(i). The interim final rule 

further provides that if a Bank sets aside 

funds solely for homeownership setaside programs other than a mortgage 

refinancing program established under 

paragraph (f), at least one-third of the 

Bank’s aggregate annual set-aside 

allocation to such programs shall be to 

assist first-time homebuyers. This is 

consistent with the current one-third 

first-time homebuyers requirement. 

D. Eligible Loans: § 1291.6(f)(2) 

Under the interim final rule, a loan is 

eligible to be refinanced with AHP 

direct subsidy if the loan is secured by 

a first mortgage on an owner-occupied 

unit that is the primary residence of the 

household, and the loan is refinanced 

under the HOPE for Homeowners 

Program. 12 CFR 1291.6(f)(2). In order to 

be refinanced under the HOPE for 

Homeowners Program, the loan must 

meet all applicable underwriting 

requirements and other FHA standards 

for the HOPE for Homeowners Program. 

The FHFA believes that these 

requirements and standards will 

provide both adequate protections to 

borrowers whose loans will be 

refinanced and protect the integrity of 

the AHP. For example, under the HOPE 

for Homeowners Program and FHA 

standards: 

• The borrower must be unable to 

afford its existing mortgage payments; 

the borrower’s mortgage debt-to-income 

ratio, as of March 1, 2008, must have 

been greater than 31 percent, or such 

higher amount as the FHA determines 

appropriate; 

• The principal amount of the 

refinanced loan shall not exceed 90 

percent of the currently appraised value 

of the property; 

• The refinanced loan must be a 

fixed-rate, fully amortizing, 30-year 

loan; 

• Prepayment fees must be waived; 

• All fees and penalties related to 

default or delinquency on the original 

mortgage must be waived or forgiven; 

• Any outstanding mortgage liens on 

the property shall be removed; 

• Investor-owned properties are not 

eligible—the borrower must be an 

owner-occupant; 

• The borrower must have verified 

income based on an IRS tax return or 

other equivalent standards; 

• The borrower may be charged only 

reasonable and customary closing costs 

established by the FHA; 

• Origination fees are subject to 

limitation; and 

• Rates on refinanced mortgages must 

be commensurate with market interest 

rates. 

There are other programs that provide 

refinancing assistance to distressed 

borrowers. The Enterprises offer 

programs that allow for loan 

modifications targeted at subprime 

mortgage borrowers but which do not 

require that lenders take an initial writedown based on the current appraised 

value. The FHA offers a refinancing 

option in addition to the HOPE for 

Homeowners Program called FHA 

Secure. Under FHA Secure, any 

mortgage payment arrearage on the first 

loan can be rolled into a new FHAinsured loan. Further, lenders have the 

option of placing a second lien on the 

property if the borrower owes more than 

the property is worth or exceeds the 

FHA loan limit or to cover prepayment 

penalties and arrearages. In addition, 

state housing finance agencies are 

developing their own refinancing 

programs to assist distressed 

homeowners. Because these programs 

are diverse and emerging, the FHFA has 

not analyzed their specific merits. 

The FHFA requests comment on 

whether the rule should authorize the 

Banks to use AHP set-aside funds to 

assist homeowners refinancing under 

other programs intended to aid 

distressed homeowners, such as those 

offered by the Enterprises, FHA Secure, 

or any state housing finance agency 

programs. In addition, the FHFA 

requests comment on how the standards 

for these programs will assure the 

affordability of the housing costs to the 

borrower and the sustainability of the 

refinanced loan. 

E. Eligible Uses of AHP Subsidy: 

§ 1291.6(f)(3) 

The interim final rule allows members 

to provide AHP direct subsidy for two 

uses. 12 CFR 1291.6(f)(3). A member 

may use the subsidy to reduce the 

outstanding principal balance of the 

household’s loan below the maximum 

loan-to-value ratio required under the 

HOPE for Homeowners Program in 

order to enable the household to meet 

the applicable mortgage debt-to-income 


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ratio requirements under such Program, 

i.e., to make the refinanced loan 

affordable to the household. This use of 

the AHP subsidy is consistent with the 

current AHP rule, which permits use of 

the AHP subsidy to pay for down 

payment assistance in connection with 

the purchase of a home under the 

homeownership set-aside program. See 

12 CFR 1291.6(c)(4). In addition, under 

the new AHP refinancing authority, a 

member may use the AHP subsidy to 

pay FHA-approved loan closing costs. 

This use of AHP subsidy also is 

consistent with the current AHP rule, 

which permits use of the AHP subsidy 

to pay for closing costs in connection 

with the purchase of a home under the 

homeownership set-aside program. See 

12 CFR 1291.6(c)(4) and (8). 

F. Eligible Lender Participants: 

§ 1291.6(f)(4) 

Under the interim final rule, a Bank 

may provide the AHP direct subsidy to 

members that are FHA-approved lenders 

for the purpose of refinancing an 

eligible loan with an FHA-insured loan 

by the member. A Bank may also, in its 

discretion, provide the AHP subsidy to 

members that will provide the subsidy 

to FHA-approved lenders that are not 

members of the Bank for the purpose of 

refinancing an eligible loan if, after 

consulting with the Bank’s Advisory 

Council, the Bank determines that such 

action would be in the best interests of 

borrowers in the Bank’s district. 12 CFR 

1291.6(f)(4). Providing the subsidy to 

members, or to members who provide it 

to nonmembers, is consistent with the 

current AHP homeownership set-aside 

process under which a Bank provides 

the AHP subsidy to a member for use in 

conjunction with making a loan to a 

borrower, or to a member that provides 

the subsidy to another member or 

nonmember lender to make an AHPassisted loan to a borrower. 

G. AHP Retention Agreements 

The interim final rule does not require 

five-year retention agreements as 

required under the current AHP 

regulation and, therefore, does not 

require repayment of AHP subsidy by a 

household in the event of a subsequent 

sale or refinancing of the unit during the 

five-year retention period. See 12 CFR 

1291.6(c)(5) and 1291.9(a)(7). The FHFA 

has decided not to include this 

requirement because the HOPE for 

Homeowners Program includes a 

requirement generally that any 

appreciation or equity created as a result 

of a sale or refinancing during the fiveyear period must be shared between the 

FHA, the borrower, and any subordinate 

mortgage holder whose lien was 

extinguished as part of the refinancing 

under the Program. See Reform Act at 

sec. 1402(a) (National Housing Act sec. 

257(e)(4)(B), and (k)). 

H. Monitoring: § 1291.7(b) 

The interim final rule amends existing 

§ 1291.7(b), which sets forth the 

monitoring requirements for 

homeownership set-aside programs 

generally, to make a Bank’s mortgage 

refinancing program subject to those 

monitoring requirements. Thus, a 

Bank’s written monitoring policies for 

its homeownership set-aside programs 

must include requirements for: (i) 

Determining whether AHP subsidy was 

provided to households with incomes at 

or below 80 percent of the area median 

income as required in § 1291.6(c)(2)(i), 

and all other applicable eligibility 

requirements in § 1291.6(c) and (f); (ii) 

Bank review of member certifications, 

prior to disbursement of the AHP 

subsidy, that the subsidy will be 

provided in compliance with all 

applicable eligibility requirements in 

§ 1291.6(c) and (f); and (iii) Bank review 

of back-up documentation regarding 

household incomes maintained by the 

member, and maintenance and Bank 

review of other documentation in the 

Bank’s discretion. 

I. Sunset Date: § 1291.6(f)(5) 

The interim final rule includes a 

provision terminating the Banks’ 

authority to commit AHP subsidy for 

refinancing after July 30, 2010, which is 

the expiration date of the two-year 

period in section 1218 of the Reform 

Act. 12 CFR 1291.6(f)(5). The rule 

allows lenders to use AHP subsidy 

committed by that date to refinance 

loans that are in the pipeline. This 

means that a lender may use the AHP 

subsidy for a loan that was submitted to 

the FHA for approval on or before July 

30, 2010 that is approved for refinancing 

under the HOPE for Homeowners 

Program after that date. Title IV of the 

Reform Act provides that the sunset 

date for the HOPE for Homeowners 

Program is September 30, 2011. See 

Reform Act at sec. 1402(a) (National 

Housing Act sec. 257(r)). In light of our 

view that prior to its amendment by the 

Reform Act, section 10(j) of the Bank 

Act provided the legal authority for the 

FHFA to permit the Banks to use AHP 

subsidy to pay costs associated with 

refinancing existing mortgage loans, see 

73 FR at 20553–55, the FHFA requests 

comment on whether it should extend 

the sunset date to be co-extensive with 

that of the HOPE for Homeowners 

Program. 

The FHFA invites comments on all 

aspects of the interim final rule. 

III. Notice and Public Participation 

The FHFA for good cause finds that 

the notice and comment procedure 

required by the Administrative 

Procedure Act is impracticable or 

contrary to the public interest in this 

instance. See 5 U.S.C. 553(b)(3)(B). 

Section 1218 of the Reform Act requires 

that the FHFA’s regulations authorize 

the use of AHP subsidy for mortgage 

refinancing for a two-year period 

commencing on July 30, 2008. Issuance 

of an interim final rule will enable the 

Banks to expedite implementation of 

AHP mortgage refinancing programs 

pursuant to section 1218. The delay that 

would ensue during a proposed notice 

and comment rulemaking would 

significantly curtail the available period 

of time for implementation and 

operation of AHP mortgage refinancing 

programs by the Banks. However, 

because the FHFA believes that public 

comments are valuable, it encourages 

comments on this interim final rule, and 

will consider all comments received on 

or before December 16, 2008 in 

promulgating a final rule. 

IV. Effective Date 

For the reasons stated in part III 

above, the FHFA for good cause finds 

that the interim final rule should 

become effective on October 17, 2008. 

See 5 U.S.C. 553(d)(3). 

V. Paperwork Reduction Act 

The information collection contained 

in the current AHP regulation, entitled 

‘‘Affordable Housing Program (AHP),’’ 

has been assigned control number 3069– 

0006 by the Office of Management and 

Budget (OMB). The interim final rule 

does not substantively or materially 

modify the approved information 

collection. Consequently, the FHFA has 

not submitted any information to OMB 

for review under the Paperwork 

Reduction Act of 1995 (PRA). See 44 

U.S.C. 3501 et seq. 

VI. Regulatory Flexibility Act 

The FHFA is adopting this regulation 

in the form of an interim final rule and 

not as a proposed rule. Therefore, the 

provisions of the Regulatory Flexibility 

Act do not apply. See 5 U.S.C. 601(2) 

and 603(a). 

List of Subjects in 12 CFR Parts 951 and 

1291 

Community development, Credit, 

Federal home loan banks, Housing, 

Reporting and recordkeeping 

requirements. 

■ For the reasons stated in the preamble, 

the FHFA hereby amends chapters IX 


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61664 Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations 

and XII of title 12 of the Code of Federal 

Regulations as follows: 

CHAPTER XII—FEDERAL HOUSING 

FINANCE AGENCY 

■ 1. Amend title 12 CFR chapter XII by 

establishing subchapter E, consisting of 

parts 1280 through 1299, to read as 

follows: 

Subchapter E—Housing Goals and Mission 

CHAPTER IX—FEDERAL HOUSING 

FINANCE BOARD 

PART 951—AFFORDABLE HOUSING 

PROGRAM 

■ 2. Transfer 12 CFR part 951 from 

chapter IX, subchapter G, to chapter XII, 

subchapter E and redesignate as 12 CFR 

part 1291. 

PART 1291—FEDERAL HOME LOAN 

BANKS’ AFFORDABLE HOUSING 

PROGRAM 

■ 3. The authority citation for the newly 

redesignated part 1291 continues to read 

as follows: 

Authority: 12 U.S.C. 1430(j). 

■ 3A. Revise the heading of newly 

redesignated part 1291 to read as set 

forth above. 

■ 4. Amend the newly redesignated part 

1291 as follows: 

Amend: By removing the reference to: And adding in its place: 

§ 1291.1, definition of ‘‘Affordable’’ ........................... § 951.1 of this part ................................................... § 1291.1. 

§ 1291.1, definition of ‘‘Competitive application program’’.§ 951.5 of this part ................................................... § 1291.5. 

§ 1291.1, definition of ‘‘Homeownership set-aside 

program’’.

§ 951.6 of this part ................................................... § 1291.6. 

§ 1291.3(a)(1) ............................................................ § 951.1 of this part ................................................... § 1291.1. 

§ 1291.3(a)(2) ............................................................ § 951.5 of this part ................................................... § 1291.5. 

§ 1291.3(a)(3) ............................................................ § 951.6 of this part ................................................... § 1291.6. 

§ 1291.3(a)(4) ............................................................ § 951.5(c)(13) of this part ......................................... § 1291.5(c)(13). 

§ 1291.3(a)(5) ............................................................ § 951.5(c)(14) of this part ......................................... § 1291.5(c)(14). 

§ 1291.3(a)(6) ............................................................ § 951.7 of this part ................................................... § 1291.7. 

§ 1291.3(a)(7) ............................................................ § 951.8(f)(2) of this part ........................................... § 1291.8(f)(2). 

§ 1291.3(a)(8) ............................................................ § 951.9(a)(7) and (a)(8) of this part ......................... § 1291.9(a)(7) and (8). 

§ 1291.5(c)(9)(i) ......................................................... § 951.9(a)(7) of this part .......................................... § 1291.9(a)(7). 

§ 1291.5(c)(9)(ii) ........................................................ § 951.9(a)(8) of this part .......................................... § 1291.9(a)(8). 

§ 1291.5(c)(10)(ii) ...................................................... § 951.5(c)(13) of this part ......................................... paragraph (c)(13) of this section. 

§ 1291.5(c)(10)(iii) ..................................................... § 951.5(c)(14) of this part ......................................... paragraph (c)(14) of this section. 

§ 1291.5(c)(13)(iii)(A) ................................................ §§ 951.7(a) and 951.9 of this part ........................... §§ 1291.7(a) and 1291.9. 

§ 1291.5(c)(13)(iii)(B) ................................................ §§ 951.8 and 951.9 of this part ................................ §§ 1291.8 and 1291.9. 

§ 1291.5(c)(14)(iii) ..................................................... § 951.7(a), 951.8, and 951.9, respectively, of this 

part.

§§ 1291.7(a), 1291.8, and 1291.9. 

§ 1291.5(c)(16)(i)(A) .................................................. § 951.5(f) of this part ................................................ paragraph (f) of this section. 

§ 1291.5(g)(6) ............................................................ § 951.8(f)(2) of this part ........................................... § 1291.8(f)(2). 

§ 1291.5(h)(1)(i) ........................................................ § 951.3 of this part ................................................... § 1291.3. 

§ 1291.5(h)(1)(ii) ........................................................ § 951.5(e) of this part ............................................... paragraph (e) of this section. 

§ 1291.6(c)(2)(iii) ....................................................... § 951.2(b)(2) of this part .......................................... § 1291.2(b)(2). 

§ 1291.6(c)(5) ............................................................ § 951.9(a)(7) of this part .......................................... § 1291.9(a)(7). 

§ 1291.7(a)(1)(i)(C)(4) ............................................... § 951.9(a)(7) or (a)(8), respectively, of this part ...... § 1291.9(a)(7) or (8). 

§ 1291.7(a)(5) ............................................................ § 951.1 of this part ................................................... § 1291.1. 

§ 1291.7(b)(1)(i) ........................................................ § 951.6(c)(2) of this part ........................................... § 1291.6(c)(2). 

§ 1291.7(b)(1)(ii) ........................................................ § 951.6(c) of this part ............................................... § 1291.6(c). 

§ 1291.7(b)(1)(ii) ........................................................ § 951.6(c)(5) of this part ........................................... § 1291.6(c)(5). 

§ 1291.7(b)(2)(i) ........................................................ § 951.6(c) of this part ............................................... § 1291.6(c). 

§ 1291.8(c)(2) ............................................................ § 951.5(f) of this part ................................................ § 1291.5(f). 

§ 1291.8(i) ................................................................. § 907.9 of this chapter ............................................. 12 CFR 907.9. 

§ 1291.9(a)(4)(i) ........................................................ § 951.8(b)(1) of this part .......................................... § 1291.8(b)(1). 

§ 1291.9(a)(4)(ii)(A) ................................................... § 951.8(b)(2)(i) or (b)(2)(ii) of this part ..................... § 1291.8(b)(2)(i) or (ii). 

§ 1291.9(a)(4)(ii)(B) ................................................... § 951.8(b)(2)(i) of this part ....................................... § 1291.8(b)(2)(i). 

§ 1291.9(a)(5)(i) ........................................................ § 951.7 of this part ................................................... § 1291.7. 

§ 1291.9(a)(5)(ii) ........................................................ § 951.7 of this part ................................................... § 1291.7. 

§ 1291.9(a)(7)(iii)(A) .................................................. § 951.8(f)(2) of this part ........................................... § 1291.8(f)(2). 

§ 1291.9(a)(7)(iii)(B) .................................................. § 951.8(f)(2) .............................................................. § 1291.8(f)(2). 

§ 1291.9(a)(9) ............................................................ § 951.5(c)(13) of this part ......................................... § 1291.5(c)(13). 

§ 1291.9(b) ................................................................ § 951.8(b)(2)(ii) of this part ...................................... § 1291.8(b)(2)(ii). 

§ 1291.11(a) .............................................................. § 951.2(a) of this part ............................................... § 1291.2(a). 

§ 1291.12(a) .............................................................. § 951.2(a) of this part ............................................... § 1291.2(a). 

§ 1291.12(b) .............................................................. § 951.2(a) of this part ............................................... § 1291.2(a). 

■ 5. In newly redesignated part 1291, 

revise all references to ‘‘Finance Board’’ 

to read ‘‘FHFA’’. 

■ 6. In newly redesignated § 1291.1, add 

the following definitions in alphabetical 

order: 

§ 1291.1 Definitions. 

* * * * * 

Director means the Director of the 

Federal Housing Finance Agency, or his 

or her designate. 

* * * * * 

FHFA means the Federal Housing 

Finance Agency. 

* * * * * 

■ 7. Amend § 1291.2(b)(2)(i) to read as 

follows: 


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Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations 61665 

§ 1291.2 Required annual AHP 

contributions; allocation of contributions. 

* * * * * 

(b) * * * 

(2) Homeownership set-aside 

programs—(i) Allocation amount; firsttime homebuyers. (A) A Bank, in its 

discretion, may set aside annually, in 

the aggregate, up to the greater of $4.5 

million or 35 percent of the Bank’s 

annual required AHP contribution to 

provide funds to members participating 

in homeownership set-aside programs, 

including a mortgage refinancing setaside program established under 

paragraph (f) of this section, pursuant to 

the requirements of this part. 

(B) If a Bank sets aside funds solely 

for homeownership set-aside programs 

other than a mortgage refinancing 

program established under paragraph (f) 

of this section, at least one-third of the 

Bank’s aggregate annual set-aside 

allocation to such programs shall be to 

assist first-time homebuyers. 

* * * * * 

■ 8. Amend § 1291.6 by adding 

paragraph (f) to read as follows: 

§ 1291.6 Homeownership set-aside 

programs. 

* * * * * 

(f) Mortgage refinancing program—(1) 

General. A Bank may establish a 

homeownership set-aside program for 

the use of AHP direct subsidy by its 

members to assist in the refinancing of 

a household’s mortgage loan, provided 

such program meets the requirements of 

this paragraph (f) and otherwise meets 

the requirements of part 1291. The 

provisions of paragraphs (c)(2)(ii), 

(c)(2)(iii), and (c)(4) through (c)(8) of 

this section, shall not apply to such 

program. 

(2) Eligible loans. A loan is eligible to 

be refinanced with AHP direct subsidy 

if the loan is secured by a first mortgage 

on an owner-occupied unit that is the 

primary residence of the household, and 

the loan is refinanced under the Federal 

Housing Administration’s (FHA) HOPE 

for Homeowners Program established 

pursuant to Title IV of the Housing and 

Economic Recovery Act of 2008 and 

thereby meets all applicable 

underwriting requirements and other 

standards under Title II of the National 

Housing Act, as amended by Title IV (12 

U.S.C. 1707 et seq.). 

(3) Eligible uses of AHP direct 

subsidy. Members may provide the AHP 

direct subsidy to: 

(i) Reduce the outstanding principal 

balance of the loan below the maximum 

loan-to-value ratio required under the 

HOPE for Homeowners Program in 

order to make the refinanced loan 

affordable to the household by enabling 

the household to meet the HOPE for 

Homeowners Program’s debt-to-income 

standards for a low-or moderate-income 

household; or 

(ii) Pay FHA-approved loan closing 

costs. 

(4) Eligible lender participants. A 

Bank may provide the AHP direct 

subsidy to members that are FHAapproved lenders for the purpose of 

refinancing an eligible loan with an 

FHA-insured loan by the member, or, in 

the Bank’s discretion, to members that 

provide the subsidy to FHA-approved 

lenders that are not members of the 

Bank for the purpose of refinancing an 

eligible loan if, after consulting with the 

Bank’s Advisory Council, the Bank 

determines that such action would be in 

the best interests of borrowers in the 

Bank’s district. 

(5) Sunset. (i) This paragraph (f) shall 

expire on July 30, 2010, and a Bank may 

not commit AHP subsidy to households 

under its refinancing program after such 

date. 

(ii) A lender may use the AHP subsidy 

committed by such date for a loan 

submitted to the FHA for approval on or 

before July 30, 2010 that is approved for 

refinancing under the HOPE for 

Homeowners Program after such date. 

■ 9. Amend § 1291.7 by: 

■ a. In paragraph (b)(1)(ii), adding ‘‘and 

§ 1291.6(f)’’ after ‘‘§ 1291.6(c)’’; and 

■ b. In paragraph (b)(2)(i), adding ‘‘and 

§ 1291.6(f)’’ after ‘‘§ 1291.6(c)’’. 

■ 10. In newly redesignated § 1291.11, 

revise all references to ‘‘Board of 

Directors’’ to read ‘‘Director’’. 

Dated: October 7, 2008. 

James B. Lockhart III, 

Director, Federal Housing Finance Agency. 

[FR Doc. E8–24320 Filed 10–16–08; 8:45 am] 

BILLING CODE 8070–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 101 

RIN 3245–AF75 

Small Business Energy Efficiency 

Program 

AGENCY: Small Business Administration. 

ACTION: Direct final rule; comment 

request. 

SUMMARY: The U.S. Small Business 

Administration (SBA or Administration) 

is establishing a government-wide 

program that builds on the Energy Star 

for Small Business Program, and is 

located at http://www.sba.gov/energy. 

This rule is promulgated to comply with 

a provision of the Energy Independence 

and Security Act of 2007. 

DATES: This rule is effective December 1, 

2008, without further action, unless 

SBA receives a significant adverse 

comment by November 17, 2008. If SBA 

receives any significant adverse 

comments, SBA will publish a timely 

withdrawal of this rule in the Federal 

Register. 

ADDRESSES: You may submit comments, 

identified by RIN: 3245–AF75, by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting documents. 

• Mail, for paper, disk, or CD–ROM 

submissions: Kathryn Holt, Analyst, 

Office of Policy and Strategic Planning, 

Office of the Administrator, 409 Third 

Street, SW., Mail Code 2150, 

Washington, DC 20416. 

• Hand Delivery/Courier: Kathryn 

Holt, Analyst, Office of Policy and 

Strategic Planning, Office of the 

Administrator, 409 Third Street, SW., 

Mail Stop 2150, Washington, DC 20416. 

SBA will post all comments on 

http://www.regulations.gov. If you wish 

to submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.regulations.gov, 

please submit the information to 

Kathryn Holt, Analyst, Office of Policy 

and Strategic Planning, Office of the 

Administrator, 409 Third Street, SW., 

Mail Stop 2150, Washington, DC 20416, 

or send an e-mail to 

kathryn.holt@sba.gov. Highlight the 

information that you consider to be CBI 

and explain why you believe SBA 

should hold this information as 

confidential. SBA will review the 

information and make its final 

determination of whether it will publish 

the information or not. 

FOR FURTHER INFORMATION CONTACT: 

Kathryn Holt, Analyst, Office of Policy 

and Strategic Planning, Office of the 

Administrator, 409 Third Street, SW., 

Mail Stop 2150, Washington, DC 20416 

or kathryn.holt@sba.gov. 

SUPPLEMENTARY INFORMATION: The 

Administration has developed and 

coordinated a Government-wide 

program, building on the Energy Star for 

Small Business Program, to assist small 

business concerns in: Becoming more 

energy efficient, understanding the cost 

savings from improved energy 

efficiency, and identifying financing 

options for energy efficiency upgrades. 

This rule is promulgated to comply with 

the Energy Independence and Security 

Act of 2007, § 1203(b). (15 U.S.C. 657h). 

The program was developed and 

coordinated in consultation with the 

Secretary of the Department of Energy 

and the Administrator of the 

Environmental Protection Agency, and 


jlentini on PROD1PC65 with RULES