69112 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 

1Section 470 of the Housing and Urban-Rural 

Recovery Act of 1983 (42 U.S.C. 3542) provides 

that: ‘‘No demonstration program not expressly 

authorized in law may be commenced by the 

Secretary of Housing and Urban Development until 

(1) a description of such demonstration program is 

published in the Federal Register, which 

description may be included in a notice of funding 

availability; and (2) there expires a period of sixty 

calendar days following the date of such 

publication, during which period the Secretary 

shall fully consider any public comments submitted 

with respect to such demonstration program.’’ The 

Retrofit Pilot Program is specifically authorized by 

the Consolidated Appropriations Act, 2010. 

Accordingly, HUD is not required to solicit 

comment on this demonstration. Nevertheless, HUD 

welcomes public comment on the proposed pilot 

program. 

Calculating Economic Revitalization Needs 

Based on SBA disaster loans to businesses, 

HUD used the sum of real property and real 

content loss of small businesses not receiving 

an SBA disaster loan. This was adjusted 

upward by the proportion of applications 

that were received for a disaster that content 

and real property loss were not calculated 

because the applicant had inadequate credit 

or income. For example, if a State had 160 

applications for assistance, 150 had 

calculated needs and 10 were denied in the 

pre-processing stage for not enough income 

or poor credit, the estimated unmet need 

calculation would be increased as (1 + 10/ 

160) * calculated unmet real content loss. 

Because applications denied for poor credit 

or income are the most likely measure of 

requiring the type of assistance available 

with CDBG recovery funds, the calculated 

unmet business needs for each State were 

adjusted upwards by the proportion of total 

application that were denied at the preprocess stage because of poor credit or 

inability to show repayment ability. 

Dated: November 3, 2010. 

Mercedes M. Ma ́ rquez, 

Assistant Secretary for Community Planning 

and Development. 

[FR Doc. 2010–28421 Filed 11–9–10; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5450–N–01] 

Federal Housing Administration (FHA): 

Notice of FHA PowerSaver Home 

Energy Retrofit Loan Pilot Program: 

Request for Comments and 

Expressions of Interest 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Notice. 

SUMMARY: This notice announces HUD’s 

proposal to conduct an FHA Home 

Energy Retrofit Loan Pilot Program 

(Retrofit Pilot Program or Pilot Program) 

known as FHA PowerSaver. The 

Consolidated Appropriations Act, 2010 

directs HUD to conduct an Energy 

Efficient Mortgage Innovation pilot 

program targeted to the single family 

housing market. The Retrofit Pilot 

Program is designed by HUD to meet 

this statutory directive and provides 

funding to support that effort. 

Under the Retrofit Pilot Program, 

HUD, through FHA-approved lenders, 

will insure loans for homeowners who 

are seeking to make energy 

improvements to their homes. HUD 

intends to select a limited number of 

lenders to participate in the Retrofit 

Pilot Program. The Pilot Program will be 

for loans originated during a 2-year 

period, will be restricted to lenders 

approved by HUD to participate in the 

Pilot Program, and will be conducted in 

geographic areas identified by HUD as 

optimum locations to conduct the Pilot 

Program. In making these 

determinations, HUD will consider the 

factors and criteria that are proposed in 

this notice to establish the framework 

for the Pilot Program, and for which 

HUD specifically solicits public 

comment.1

For this Pilot Program, HUD will 

deploy up to $25 million appropriated 

by the Act for an Energy Efficient 

Mortgage Innovation Fund pilot 

program directed at the single family 

housing market. HUD will utilize those 

funds primarily to provide incentive 

payments with grant funds to 

participating lenders to support 

approved activities that deliver bona 

fide benefits to borrowers, with 

remaining funds available to support the 

evaluation of the Pilot Program. 

Following the public comment 

period, HUD will announce the lenders 

that have been selected to participate in 

the Pilot Program, the geographic areas 

in which the Pilot Program will be 

conducted, and any modifications to the 

Retrofit Pilot Program made in response 

to public comment and/or in response 

to HUD’s further consideration of how 

the pilot program should be structured. 

At the conclusion of the Pilot Program, 

HUD will assess the results of the 

Retrofit Pilot Program, and determine 

any additional action based on that 

assessment. HUD will assess the extent 

to which energy retrofits under the Pilot 

Program delivered expected benefits in 

terms of energy reductions, cost savings, 

and property value improvement, 

among other results. 

In addition to seeking comments on 

the proposed Pilot Program, HUD 

invites lenders interested in 

participating in this Pilot Program to 

notify HUD of such interest as provided 

in Appendix A to this notice. 

DATES: Comment Due Date: December 

27, 2010. 

ADDRESSES: Note: The following 

procedures pertain to the submission of 

general comments on this notice. 

Lenders interested in participating in 

this Pilot Program must e-mail their 

Expressions of Interest to 

FHAPowerSaver@hud.gov in accordance 

with Appendix A of this notice. 

Interested persons are invited to 

submit comments regarding this notice 

to the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street, SW., Room 10276, 

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 notice. 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 

impairments may access this number 

via TTY by calling the Federal 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 69113 

2Middle Class Task Force and Council on 

Environmental Quality, Recovery through Retrofit 

(2009). http://www.whitehouse.gov/assets/

documents/Recovery_Through_Retrofit_Final_

Report.pdf. 

3U.S. Census Bureau, American Housing Survey 

National Tables: 2007, All Housing. http:// 

www.census.gov/hhes/www/housing/ahs/ahs07/ 

ahs07.html. 

4U.S. Energy Information Agency, ‘‘U.S. Carbon 

Dioxide Emissions from Energy Sources: 2008 Flash 

Estimate.’’ http://www.eia.doe.gov/oiaf/1605/flash/ 

pdf/flash.pdf. 

5Choi Granade, H; J Creyts; A Derkach; Ph Farese; 

and S. Nyquist, K. Ostrowski, ‘‘Unlocking Energy 

Efficiency in the U.S. Economy,’’ July 2009. 

6 Id. 

7Middle Class Task Force and Council on 

Environmental Quality, Id. 

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: 

Patricia McBarron, Office of Single 

Family Housing 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 

A. Energy Efficient Mortgage Innovation 

Pilot Program 

The Consolidated Appropriations Act, 

2010 (Pub. L. 111–117, approved 

December 16, 2009, 123 Stat. 3034) 

(2010 Appropriations Act), which 

appropriated Fiscal Year (FY) 2010 

funds for HUD, among other agencies, 

appropriated $50 million for an Energy 

Innovation Fund to enable HUD to 

catalyze innovations in the residential 

energy efficiency sector that have the 

promise of replicability and help create 

a standardized home energy efficient 

retrofit market. Of the $50 million 

appropriated for the Energy Innovation 

Fund, the 2010 Appropriations Act 

stated that ‘‘$25,000,000 shall be for the 

Energy Efficient Mortgage Innovation 

pilot program directed at the single 

family housing market.’’ (See Pub. L. 

111–117, at 123 Stat. 3089.) 

In considering how to structure the 

pilot program directed by the 2010 

Appropriations Act, HUD looked to the 

findings of the Administration’s 

Recovery through Retrofit Report, which 

specifically addressed retrofitting homes 

for energy efficiency, and the suitability 

of building the pilot program by 

supplementing FHA’s Title I Property 

Improvement Loan Insurance program. 

B. Recovery Through Retrofit 

On October 19, 2009, the Vice 

President and the White House Middle 

Class Task Force released the Recovery 

through Retrofit Report (RTR Report), 

which builds on the foundation laid out 

in the American Recovery and 

Reinvestment Act (Pub. L. 111–5, 

approved February 17, 2009) to expand 

green job opportunities in the United 

States and boost energy savings for 

middle class Americans by retrofitting 

homes for energy efficiency.2 The White 

House Council on Environmental 

Quality developed the Report through 

an interagency process, involving eleven 

Departments and Agencies (including 

HUD) and 6 White House offices. 

The RTR Report recognizes that 

making American homes and buildings 

more energy efficient presents an 

unprecedented opportunity for 

communities throughout the country. 

The funding of home retrofit projects 

can potentially help people earn money 

as home retrofit workers, while also 

helping them save money by lowering 

their utility bills. By encouraging 

nationwide home energy efficiency 

improvements, workers of all skill levels 

can be trained, engaged, and have the 

opportunity to participate in expanding 

a national home retrofit market. 

According to the RTR Report, there are 

almost 130 million homes in this 

country,3 generating more than 20 

percent of our Nation’s carbon dioxide 

emissions.4 The RTR Report indicates 

that existing home energy retrofit 

techniques and technologies can reduce 

home energy use by up to 40 percent per 

home and lower associated greenhouse 

gas emissions by up to 160 million 

metric tons annually by the year 2020.5

The RTR Report also stated that home 

energy efficiency retrofits have the 

potential to reduce home energy bills by 

$21 billion annually.6

The RTR Report identified several 

barriers that have prevented a selfsustaining retrofit market from forming. 

Among other barriers, the RTR Report 

found that homeowners face high 

upfront costs and many are concerned 

that they will be prevented from 

recouping the value of their investment 

if they choose to sell their home. The 

upfront costs of home retrofit projects 

are often beyond the average 

homeowner’s budget.7

C. Title I Property Improvement Loan 

Insurance Program 

Through the Title I Property 

Improvement Loan Insurance program 

(Title I program), FHA offers consumers 

the opportunity to obtain affordable 

home improvement loans by insuring 

loans made by private lenders to 

improve properties that meet certain 

requirements. Lending institutions make 

loans from their own funds to eligible 

borrowers to finance these 

improvements. The program is 

authorized by section 2 of Title I of the 

National Housing Act (12 U.S.C. 1703). 

Specifically, under section 2(a) of the 

National Housing Act, HUD is 

authorized to help homeowners finance 

alterations, repairs, and improvements 

in connection with existing structures or 

manufactured homes. The Title I 

program regulations are codified in 24 

CFR part 201. 

Eligible borrowers include owners of 

the properties to be improved, the 

person leasing the property (provided 

that the lease will extend at least 6 

months beyond the date when the loan 

must be repaid), or someone purchasing 

the property under a land installment 

contract. Only lenders approved by 

HUD specifically for the Title I program 

can make loans covered by Title I loan 

insurance. Title I loans can be disbursed 

directly to the borrower or, if the loan 

is made through a dealer, the 

disbursement will be made jointly to the 

dealer and the borrower. 

Title I program loans may be used to 

finance permanent property 

improvements that protect or improve 

the basic livability or utility of the 

property—including manufactured 

homes, single family and multifamily 

homes, nonresidential structures, and 

the preservation of historic homes. The 

loans can also be used for fire safety 

equipment. The Title I program may be 

used to insure such loans for up to 20 

years on either single family or 

multifamily properties. The maximum 

loan amount is $25,000 for improving a 

single family home or a nonresidential 

structure. Funds can also be used for the 

construction of a nonresidential 

structure. FHA insures private lenders 

against the risk of default for up to 90 

percent of any single loan, although 

FHA liability is capped at the lender’s 

reserve pool—10 percent of the amount 

of all insured Title I loans in the 

financial institution’s portfolio. 

D. Goals of the Home Energy Retrofit 

Loan Pilot Program 

FHA’s goals for the Pilot Program are: 

(1) To facilitate the testing and scaling 

of a mainstream mortgage product for 


emcdonald on DSK2BSOYB1PROD with NOTICES
69114 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 

8Choi Granade, H; J Creyts; A. Derkach; Ph. 

Farese; and S.Nyquist, K. Ostrowski, Unlocking 

Energy Efficiency in the U.S. Economy, July 2009. 

home energy retrofit loans that includes 

liquidity options for lenders, resulting 

in more affordable and widely available 

loans than are currently available for 

home energy retrofits; and (2) to 

establish a robust set of data on home 

energy improvements and their 

impact—on energy savings, borrower 

income, property value, and other 

metrics—for the purpose of driving 

development and expansion of 

mainstream mortgage products to 

support home energy retrofits. More 

broadly, FHA recognizes that affordable 

and available financing in and of itself 

may not drive widespread adoption of 

home energy retrofits in every market; 

however, research suggests that lack of 

financing is a primary barrier.8 Thus, 

FHA intends for the Pilot Program to 

help determine the extent to which 

affordable and available financing, along 

with other strategies and tactics, can 

increase retrofit activity among 

homeowners. 

As a result of discussions with 

national experts in housing finance and 

home energy efficiency, HUD 

determined that utilizing the existing 

FHA Title I program, with additional 

incentives and requirements, is the most 

efficient and effective opportunity it 

could deploy to deliver federally 

insured financing to homeowners in 

markets that are ready and able to 

utilize it. After analyzing the viability of 

the Title I program to achieve these 

goals, FHA determined that several 

changes to the program are necessary for 

the purposes of the Pilot Program. These 

changes are described in detail in 

Section II.D. of this notice. Broadly, the 

changes are intended to protect 

consumers, provide low-cost financing, 

and generate lender and secondary 

market participation in home energy 

retrofit loans. 

Section II of this notice, which 

immediately follows, presents the 

structure, requirements, and criteria that 

will govern HUD’s proposed Retrofit 

Pilot Program, and HUD welcomes 

comment on all aspects of the proposed 

pilot program. HUD invites interested 

lenders to advise HUD of their interest, 

as described in Appendix A of this 

notice, so that HUD may contact them 

and explore their interest and the 

possibility of their participation in the 

pilot program. No proprietary 

information should be submitted by any 

interested lender, only expressions of 

interest in participating. 

After reviewing public comments 

submitted in response to HUD’s 

solicitation of comment, HUD will issue 

a second Federal Register notice that 

will formally announce the 

establishment of the Retrofit Pilot 

Program, and the commencement date. 

II. The Home Energy Retrofit Loan Pilot 

Program 

A. Authority 

The Retrofit Pilot Program is 

authorized by the provisions of the 

Energy Innovation Fund of the 2010 

Appropriations Act, which directs HUD 

to conduct an Energy Efficient Mortgage 

Innovation pilot program targeted to the 

single family housing market (Pub. L. 

111–117, at 123 Stat. 3089). The Pilot 

Program is based on the requirements of 

Title I, section 2 of the National Housing 

Act (12 U.S.C. 1703). Under section 2(a) 

of the National Housing Act, HUD is 

authorized to provide loan insurance in 

order to help homeowners finance 

alterations, repairs, and improvements 

in connection with existing structures or 

manufactured homes. HUD’s 

implementing regulations are codified at 

24 CFR part 201. 

B. Duration and Geographic Scope 

1. Duration. The Retrofit Pilot 

Program will be conducted for loans 

originated during a period of 2 years 

commencing on the effective date 

specified by the final notice that 

announces and establishes the Pilot 

Program. HUD, however, may extend 

the duration of the Pilot Program, after 

its commencement, beyond the 2-year 

period to accurately assess the Pilot’s 

effectiveness. HUD will announce any 

such extension through Federal Register 

notice. 

2. Geographic scope. The success of 

the Retrofit Pilot Program and its 

potential to inform further efforts to 

expand financing for energy-efficient 

home retrofits will be advanced by 

focusing on properties located in 

communities that have already taken 

affirmative steps to address energy 

efficiency retrofits. HUD is aware that a 

number of communities have already 

developed the programmatic 

infrastructure to help ensure that the 

critical non-financial components of a 

holistic retrofit initiative are in place. In 

selecting communities in which to 

conduct the Pilot Program, HUD will 

target communities that have already 

developed a robust home energy 

efficiency retrofit infrastructure. 

The Department of Energy’s (DOE’s) 

Energy Efficiency and Conservation 

Block Grants (EECBG) program is 

authorized under Title V, Subtitle E of 

the Energy Independence and Security 

Act (EISA), signed into law on 

December 19, 2007. Through formula 

and competitive grants administered by 

DOE, this program empowers local 

communities to make strategic 

investments to meet the nation’s longterm goals for energy independence and 

leadership on climate change. 

With funding for the EECBG program 

provided by the American Recovery and 

Reinvestment Act, DOE initiated the 

Retrofit Ramp-up Program, now known 

as the Better Buildings program, a 

demonstration program directed to 

stimulating activities and investments 

that can: (1) Deliver verified energy 

savings from a variety of projects in the 

local jurisdiction of the applicant, with 

a particular emphasis on efficiency 

improvements in residential, 

commercial, industrial, and public 

buildings; (2) achieve broader market 

participation and greater efficiency 

savings from building retrofits; (3) 

highly leverage grant funding in order to 

significantly enhance the resources 

available for supporting the program; (4) 

sustain themselves beyond the grant 

monies and the grant period by 

designing a viable strategy for program 

sustainability; (5) serve as pilot building 

retrofit programs that demonstrate the 

benefits of gaining economy of scale; 

and (6) serve as examples of 

comprehensive community-scale 

energy-efficiency approaches that could 

be replicated in other communities 

across the country. 

Under the Better Buildings Program, 

approximately $485 million was 

allocated by DOE through competitive 

grants to initiatives in the following 

locations: Austin, TX; 16 towns in 

Maryland: Berlin, Cambridge, 

Chestertown, Cumberland, Denton, 

Easton, Elkton, Frostburg, Oakland, 

Princess Anne, Dundalk, Westminster, 

Havre de Grace, Salisbury, Takoma 

Park, and University Park, MD; Fayette 

County, PA; Bedford, NY; Berlin, 

Nashua, and Plymouth, NH; Boulder 

County, City and County of Denver, 

Garfield County, and Eagle County, CO; 

Camden, NJ; Chicago region, IL; 

Cincinnati, Ohio and northeast 

Kentucky; Consortium of 14 

Connecticut Towns: Bethany, Cheshire, 

East Haddam, East Hampton, 

Glastonbury, Lebanon, Mansfield, 

Portland, Ridgefield, Weston, Westport, 

Wethersfield, Wilton and Windom; 

Detroit, Grand Rapids, and southeast 

MI; Greensboro, NC; Indianapolis and 

Lafayette, IN; Kansas City, MO; Los 

Angeles, San Francisco Bay Area, 

Sacramento, San Diego, and Santa 

Barbara County, CA; Lowell, MA; 

Madison, Milwaukee, and Racine, WI; 

Maine statewide; Missouri statewide; 

New York statewide; Omaha and 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 69115 

Lincoln, NE; Oregon statewide; 

Philadelphia, PA; Phoenix, AZ; Riley 

County, KS; San Antonio, TX; Seattle, 

and Bainbridge Island, WA; Select 

Southeastern cities: Atlanta GA, 

Carrboro NC, Chapel Hill, NC, Charlotte, 

NC, Charleston, SC, Charlottesville, VA, 

Decatur GA, Hampton Roads/Virginia 

Beach, VA, Huntsville, AL, Jacksonville 

FL and New Orleans, LA; Toledo, OH; 

and U.S. Virgin Islands. 

The locations listed above are all 

eligible markets for lenders to serve in 

the Pilot. In addition, FHA will consider 

lenders’ interest in other communities, 

subject to an assessment of such 

communities’ infrastructure for 

implementing residential retrofit 

programs. HUD expects to consult with 

DOE in such cases. In providing HUD 

with Expressions of Interest to 

Participate, lenders must specify the 

market(s) they intend to target. 

FHA considered targeting the pilot to 

a smaller number of markets, which 

may have increased the likelihood of 

lender competition within some 

markets, potentially benefitting 

consumers. FHA determined that such 

an approach could limit the number and 

diversity of lenders that could 

participate in the program overall, 

however. FHA determined it was 

important for the Pilot to be open to a 

reasonably wide range of lenders—by 

size and type, as well as service area— 

especially given the challenging 

conditions facing lenders in the current 

environment, which may create barriers 

to participation for some, even if 

interested. In selecting lenders to 

participate, HUD will evaluate the 

extent to which lenders intend to 

provide loans at the most favorable rate 

to consumers, thus directly addressing a 

major benefit that lender competition 

would potentially foster. 

C. Lender Eligibility 

Lender participation in the Retrofit 

Pilot Program is voluntary. Of the pool 

of interested lenders that meet the 

criteria described in Section II of this 

notice, HUD intends to select a limited 

number of lenders to participate in the 

Retrofit Pilot Program. HUD is currently 

undertaking efforts to identify FHAapproved lenders that may be suitable 

candidates for participation in the 

Retrofit Pilot Program. To be eligible, 

lenders must satisfy the criteria set forth 

in this Section II.C. HUD reserves the 

right to terminate a lender’s 

participation in the Retrofit Pilot 

Program for unacceptable performance. 

1. Approval as an FHA Title I or Title 

II program lender. Lenders must hold 

valid Title I contracts of insurance and 

be approved pursuant to the 

requirements of 24 CFR part 202 to 

originate, purchase, hold, service, or sell 

loans insured under the Title I program 

regulations at 24 CFR part 201. 

However, approved Title II lenders may 

obtain Title I eligibility under an 

expedited process. 

2. Experience with similar lending 

initiatives. Lenders must be able to 

demonstrate experience with the type of 

lending initiative being undertaken in 

the Retrofit Pilot Program. In particular, 

HUD will consider the extent to which 

lenders have experience in successfully 

originating and/or servicing small loans, 

home equity loans, second liens, FHA 

section 203(k) rehabilitation loans, and 

Title I Property Improvement Loans. 

Lenders that do not have experience in 

such lending may still be able to 

participate in the Pilot Program to the 

extent they can demonstrate how their 

other experience is relevant to 

determining their ability to participate 

in the pilot, and they agree to meet the 

Title I requirements before participation 

in the pilot program. 

3. Computer system capabilities. 

Lenders must have the technical 

capability to interface with FHA 

through FHA Connection. In addition, 

lenders must have the technical 

capability to interface with any other 

computer systems utilized by FHA or its 

contractors pertaining to the Retrofit 

Pilot Program. 

4. Audit capabilities. Lenders must 

have a demonstrated capacity to provide 

timely reports to FHA on origination 

and performance of retrofit loans. FHA 

envisions requiring monthly reports on 

loan and portfolio performance. In 

addition, a lender must be able to 

provide an electronic loan package to 

HUD for a random sample of loans 

chosen for quality reviews. 

5. Collaborative capacity. Lenders 

must have demonstrated capacity to 

work with public sector agencies, 

nonprofit organizations, utilities, and/or 

home improvement contractors. 

D. Lender Incentives 

HUD recognizes that even with 

Federal mortgage insurance such as 

would be available under the Pilot 

Program, small loans for home energy 

retrofits may have relatively high 

transaction costs for lenders, 

discouraging some from offering such 

loans and forcing others that do offer 

them to increase costs to borrowers. 

HUD will utilize the appropriated funds 

provided under the Act to provide 

lender incentive payments to support 

activities that lower costs to borrowers. 

Eligible uses of such payments will 

include lowering loan interest rates and, 

for lenders that will also service their 

own loans, reducing servicing costs. 

HUD will also consider other proposed 

uses of such funds. Any use of funds 

must show, to HUD’s satisfaction, bona 

fide benefit to borrowers. The amount of 

payment to each lender and the eligible 

uses of funds by each lender will be 

determined by HUD based on the 

lender’s Expression of Interest. A 

significant factor in determining 

payment amounts to each lender will be 

the number of loans the lender 

anticipates making during the 2-year 

period of the Pilot Program. Lenders 

will be required to report to HUD on 

their use of incentive payments funds. 

HUD anticipates that the amount of 

grant funds will not exceed $5 million 

per lender. 

Funds may be available to lenders 

who request them, but are not required 

for participation. Lenders who do not 

seek funds may still participate in the 

Pilot Program. HUD is specifically 

seeking comment on the incentive 

payments available under the program. 

E. Selection of Lenders 

As noted above, lenders interested in 

potentially participating in the Retrofit 

Pilot Program must submit an 

Expression of Interest using the 

template in Appendix A and following 

the instructions in this notice. Lenders 

that fail to do so will not be considered 

for participation. 

In evaluating Expressions of Interest 

and selecting lenders to participate, 

HUD will first review each Expression 

of Interest to verify that the lender is 

eligible to participate in the program. 

HUD will then evaluate the Expressions 

of Interest from all eligible lenders 

primarily by weighing the following 

factors in the Expression of Interest: (1) 

The lender’s anticipated loan volume 

and target markets; (2) the lender’s 

business model for participating in the 

pilot; (3) the lender’s capacity 

(experience and/or potential) to work in 

public-private partnerships; and (4) the 

extent to which the lender intends to 

deliver the most favorable loan product 

to consumers. HUD anticipates that 

these primary weighing factors will 

have generally equal weighing 

significance. In addition, HUD may 

consider the following factors in 

selecting lenders to participate: (1) 

Diversity of lender type and target 

market; and (2) impact on low-income 

households and communities. 

F. Differences Between Retrofit Pilot 

Program and Existing Title I Program 

With the exceptions discussed below, 

the Retrofit Pilot Program will be 

governed by the Title I program 

regulations at 24 CFR part 201. This 


emcdonald on DSK2BSOYB1PROD with NOTICES
69116 Federal Register / Vol. 75, No. 217 / Wednesday, November 10, 2010 / Notices 

9Manufactured home improvement loan and 

multifamily property improvement loan are terms 

defined in § 201.2. 

notice does not make any changes to the 

current Title I Property Improvement 

Program. The differences specified in 

this notice are only applicable to 

lenders selected to participate in the 

Pilot Program. 

Lenders selected to participate in the 

Retrofit Pilot Program must enter into a 

Retrofit Pilot Program Agreement by 

which they commit to adhere to the 

Title I program regulations, except as 

modified in this notice and in 

subsequent refinements, such 

modifications being applicable only to 

loans insured under the Retrofit Pilot 

Program. There will also be other 

requirements applicable to the Retrofit 

Pilot Program; for example, insuring 

Retrofit Pilot Program loans only in 

communities selected for the Pilot 

Program. 

In summary, the proposed changes 

described below, in combination with 

the appropriated funds, have the effect 

of creating an innovative pilot program 

that accords with Congress’ direction in 

the Act. These changes fall into the 

following categories: (1) Changes 

designed to enhance FHA underwriting 

of program loans; (2) changes related to 

FHA administration of the program, 

specifically in the areas of loan 

servicing, claim procedures, and 

reporting; (3) changes to target the pilot 

program specifically on its purpose of 

improving home energy performance; 

and (4) changes to provide additional 

benefits to borrowers. Finally, as noted, 

FHA proposes to augment these changes 

with incentives for lenders to 

participate, using funding appropriated 

under the Act. In summary, these 

changes adjust the current flexible 

framework for the Title I program to 

enable it to encourage and directly 

support home improvements that 

improve energy performance, while 

reducing barriers to making financing 

under the program more widely 

available and more affordable. 

1. Definition 24 CFR 201.2. For 

purposes of the Retrofit Pilot Program, 

the following terms have the following 

meanings. 

a. Single family property improvement 

loans. Only ‘‘single family property 

improvement loans’’ as that term is 

defined in 24 CFR 201.2 are eligible for 

FHA insurance and the Retrofit Pilot 

Program. Properties must also be 

principal residences as defined in 24 

CFR 201.2. HUD intends to further limit 

the Pilot Program to single unit 

detached properties in order to control 

the number of variables in the Pilot 

Program. Loans used to finance the 

property improvements for 

manufactured homes and multifamily 

properties 9 are not eligible for the 

Retrofit Pilot Program, but remain 

eligible for Title I program insurance 

under 24 CFR part 201. 

2. Loan maturities (24 CFR 201.11). 

Under the Title I program regulations at 

24 CFR 201.11 an insured loan may 

have a term as long as 20 years. Under 

the Retrofit Pilot Program, loan terms 

generally will be limited to 15 years to 

better align the term of financing with 

the useful life of, and benefits from, 

most energy retrofit improvements. 

Under the Pilot Program, loan terms that 

are for 20 years can only be for certain 

specified improvements: Renewable 

energy measures, geothermal systems, 

and other improvements as approved by 

HUD. See ‘‘Eligible use of loan 

proceeds’’ in Section II.D.4(b) below. 

3. Interest and discount points (24 

CFR 201.13). Under the Title I program 

regulations at 24 CFR 201.13, the lender 

may not require or allow any party, 

other than the borrower, to pay discount 

points or other financing charges in 

connection with the loan transaction. 

This restriction, while helping to assure 

that borrowers have a personal stake in 

the repayment of the loan, also has the 

effect of hindering state and local efforts 

to support home energy retrofits by 

lowering the cost of capital to 

consumers, such as through interest-rate 

write downs. The Retrofit Pilot Program 

expressly contemplates that third 

parties (including state and local 

governments, private organizations, and 

nonprofit organizations) may pay 

discount points or other financing 

charges in connection with the Title I 

loan transaction and encourages third 

parties to work with participating 

lenders on this basis. In addition, as 

noted, lenders may utilize HUD 

incentive payments under the Pilot 

Program for this purpose. 

The interest shall be calculated on a 

traditional mortgage interest basis. 

4. Property improvement loan 

eligibility (24 CFR 201.20). 

a. Borrower eligibility (24 CFR 

201.20(a)). As under Title I loans, 

Retrofit Pilot Program borrowers shall 

have at least a one-half interest in one 

of the following: 

(i) Fee simple title of the property; or 

(ii) A properly recorded land 

installment contract. 

Unlike the Title I program, lessees of 

the property will not be eligible to 

participate in the Pilot Program. The 

limitation of eligibility to owneroccupied properties is designed to 

reduce the variables in the Pilot 

Program for purposes of evaluation, as 

well as to help ensure compliance with 

the minimum property loan to value 

ratios described in section II.F.5., below. 

b. Eligible use of the loan proceeds (24 

CFR 201.20(b)). Similar to the Title I 

program, loan proceeds shall be used 

only for the purposes disclosed in the 

loan application. Under the standard 

Title I loan, proceeds shall be used only 

to finance property improvements that 

substantially protect or improve the 

basic livability or utility of the property. 

Further, HUD has the authority to 

establish a list of items and activities 

that may not be financed with the 

proceeds of any property improvement 

loan. 

Under the Retrofit Pilot Program, loan 

proceeds may be used only for measures 

that improve home energy performance 

or directly make such measures 

possible. If a lender has any doubt as to 

the eligibility of any item or activity, the 

lender must request a determination 

from FHA before making a loan. The 

proposed list of eligible measures, to be 

finalized after the period for public 

comment on this notice, is attached as 

Appendix B. HUD is specifically 

seeking comments on this aspect of the 

Pilot Program. 

The reason for this limitation is that 

the purpose of the Retrofit Pilot Program 

is to provide financing specifically for 

home energy retrofits. In addition, HUD 

believes that limiting the eligible uses of 

loan proceeds, as described, will allow 

better evaluation of the Retrofit Pilot 

Program for its intended purpose and 

facilitate broader analysis of Pilot 

Program data to improve the structure of 

other future financing efforts to support 

home energy retrofits. HUD encourages 

the use of home energy audits and other 

tools to enable consumers to determine 

the most beneficial improvements they 

should seek to undertake. 

5. Property valuation (24 CFR 201.20). 

The combined loan-to-value ratio of the 

mortgage and energy retrofit loan cannot 

exceed 100 percent and will require a 

method to determine current valuation 

of the property, such as an ExteriorOnly Inspection Residential Appraisal 

Report (Form HUD–2055) or other 

approved valuation method. HUD is 

specifically seeking comments on this 

aspect of the Pilot Program. 

6. Credit requirements for borrowers 

(24 CFR 201.22). In addition to the 

requirements under the Title I program, 

all borrowers participating in the 

Retrofit Pilot Program must have a 

decision credit score of 660 or higher. 

The decision credit score used by FHA 

is based on methodologies developed by 

the FICO Corporation. FICO scores, 

which range from a low of 300 to a high 


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of 850, are calculated by each of the 

three National Credit Bureaus and are 

based upon credit-related information 

reported by creditors, specific to each 

applicant. Lower credit scores indicate 

greater risk of default on any new credit 

extended to the applicant. The decision 

credit score is based on the middle of 

three National Credit Bureau scores or 

the lower of two scores when all three 

are not available, for the lowest scoring 

applicant. While FHA’s guidance is 

based on the ‘‘FICO-based’’ decision 

credit score, it is not FHA’s intent to 

prohibit the use of other credit scoring 

models to assess a borrower’s credit 

profile. 

The borrower’s total debt-to-income 

ratio cannot exceed 45 percent, as under 

the Title I program. HUD recognizes that 

requiring a minimum credit score for 

participation in the pilot program will 

mean that some homeowners cannot 

participate. However, given that this is 

a pilot program, HUD has determined to 

limit the Retrofit Pilot Program to 

borrowers with these credit scores in 

order to make an initial assessment of 

the interaction of credit ratings and 

repayment in connection with home 

energy retrofit loans. 

7. Charges to borrower to obtain loan 

(24 CFR 201.25). The regulations for the 

Title I program provide that HUD will 

establish a list of fees and charges that 

may be included in a property 

improvement loan. The Retrofit Pilot 

Program will also establish a similar list 

of fees and charges. 

8. Conditions for loan disbursement 

(24 CFR 201.26). In addition to current 

Title I requirements pertaining to 

disbursement of loan proceeds, the 

Retrofit Pilot Program funds shall be 

disbursed to the borrower(s) in two 

increments: (1) 50 percent of the 

proceeds shall be disbursed at loan 

funding/closing; and (2) the remaining 

50 percent of the proceeds shall be 

disbursed after the energy retrofit 

improvements have been completed as 

evidenced by an executed Completion 

Certificate for Property Improvements 

(Form HUD–56002) by the borrower(s), 

and a lender-required inspection. 

9. Requirements for dealer loans (24 

CFR 201.27). Under the Title I program 

a dealer loan (defined at 24 CFR 201.2) 

‘‘means a loan where a dealer, having a 

direct or indirect financial interest in 

the transaction between the borrower 

and the lender, assists the borrower in 

preparing the credit application or 

otherwise assists the borrower in 

obtaining the loan from the lender.’’ 

Dealer loans will not be permitted in the 

Retrofit Pilot Program. 

The reason for this limitation is that 

dealer loans have been 

disproportionately correlated with poor 

loan performance under Title I and 

other home improvement loan programs 

in the past. While HUD recognizes that 

there are many responsible dealers who 

can and would provide financing 

through dealer loans in a responsible 

manner, it is limiting the Retrofit Pilot 

Program to ‘‘direct loans.’’ ‘‘Direct loans’’ 

is defined under the Title I program (at 

24 CFR 201.2) as ‘‘a loan for which a 

borrower makes application directly to 

a lender without any assistance from a 

dealer.’’ HUD believes that home 

improvement contractors and others 

whose activity may be described under 

the definition of ‘‘dealer’’ for the Title I 

program will play an important role in 

ensuring the pilot’s success by 

performing the actual work related to 

the retrofits. 

10. Loan servicing (24 CFR 201.41). 

Under the Title I program, lenders 

remain responsible for proper collection 

efforts, even though actual loan 

servicing and collection may be 

performed by an agent of the lender. In 

addition to these requirements, the 

servicer of a Retrofit Pilot Program loan, 

whether the servicer is the original 

lender or a subsequent servicer, as 

under FHA’s major single family 

program (commonly referred to as the 

Title II program), is fully responsible for 

the required servicing responsibilities. 

As under the Title II program, ‘‘the 

mortgagee shall remain fully responsible 

for proper servicing, and the actions of 

its servicer shall be considered to be the 

actions of the mortgagee.’’ HUD 

emphasizes that the servicer shall also 

be fully responsible for its actions as a 

servicer. HUD intends to seek recovery 

from servicers if FHA losses are 

attributable to servicing errors. 

In addition, as noted, lenders that also 

service loans they originate under the 

pilot program may utilize HUD 

incentive payments under the program 

to reduce servicing costs that deliver 

bona fide benefits to borrowers. 

11. Insurance claim procedure (24 

CFR 201.54). Under the Title I program, 

HUD requires that insurance claims be 

fully documented. 

Under the Pilot Program, the holder of 

the note will be accountable to HUD for 

origination/underwriting errors, and the 

servicer will be accountable to HUD for 

servicing errors. If a claim would be 

denied due to servicing errors, FHA will 

pay the claim to the holder of the note 

and seek recovery of its losses from the 

servicer. To effectuate this, the insured 

lender must obtain an indemnification 

agreement from the subservicer at loan 

origination that will be assigned to HUD 

when an insurance claim is filed. As an 

alternative to an indemnification 

agreement from the subservicer, the 

insured lender shall execute and submit 

with the claim a subrogation agreement 

that allows HUD to obtain 

indemnification directly from the 

subservicer. Losses to HUD will be 

mitigated by recoveries from defaulted 

borrowers. 

III. Evaluating the Success of the 

Retrofit Pilot Program 

As a pilot program, one of the 

principal purposes of the Pilot is to 

generate data on key questions that can 

help make the case for additional 

mainstream mortgage products to 

support home energy retrofits, including 

first mortgage options. FHA is therefore 

committed to a robust evaluation 

program in connection with the Pilot. 

(The evaluation will also enable HUD to 

assess the success of possible 

modifications to the existing Title I 

program before initiating, through 

rulemaking, any changes to the Title I 

regulations.) 

FHA has identified three core 

questions on which the evaluation 

program will focus: (1) Did homes 

reduce energy consumption after 

retrofits? (2) did homeowners realize 

lower energy bills as a result of the 

retrofit? and (3) was home value affected 

as a result of the retrofit? Data from the 

PowerSaver Pilot Program suggesting 

answers to these questions will help fill 

a major void and start to establish a 

basis for analyzing other financing 

options. 

FHA acknowledges that these can be 

challenging impacts to evaluate, for 

reasons ranging from ‘‘rebound effects’’ 

to consumer concerns about accessing 

utility billing data. FHA believes that it 

must attempt to do so, however; 

otherwise, FHA is concerned that 

continued progress on mainstream 

mortgage financing options for home 

energy retrofits will be frustrated. 

FHA notes that HUD will also be 

tracking information on loan 

performance, through regular lender 

reporting, as under other FHA programs. 

The evaluation effort will therefore 

include loan performance as a 

component as well. In addition, FHA 

will explore the feasibility of adding to 

the core evaluation scope, potentially 

including: (1) Lender costs for 

originating and servicing; (3) impact of 

interest rates on consumer participation; 

(2) relative effectiveness of nonfinancial programmatic elements 

(consumer education, product 

marketing, auditing tools, and workforce 

quality assurance); and (4) the extent to 

which specific home energy 

improvements are chosen and the 

results from specific measures. 


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10The ‘‘rebound effect’’ refers to the fact that the 

reaction of the consumer to the energy-saving 

technology will not necessarily reduce energy 

consumption by what is technically possible. By 

increasing energy efficiency, the retrofit reduces the 

expense of physical comfort and will thus increase 

the demand for comfort. In fact, the retrofit may 

have been driven for a demand for more heating in 

the winter or cooling in the summer. The size of 

the rebound effect will depend on the income of the 

household and the path of energy prices. 

FHA recognizes the limitations in 

drawing conclusions from evaluating 

the Pilot Program. FHA anticipates 

utilizing a third party to conduct the 

evaluation and anticipates sharing the 

results with the public. FHA expressly 

encourages comment on the goals and 

scope of the evaluation. 

IV. Findings and Certifications 

Paperwork Reduction Act 

The information collection 

requirements in this rule have been 

submitted to the Office of Management 

and Budget (OMB) under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520) (PRA) and paperwork approval is 

pending. In accordance with the PRA, 

an agency may not conduct or sponsor, 

and a person is not required to respond 

to, a collection of information, unless it 

displays a currently valid OMB control 

number. 

Executive Order 12866, Regulatory 

Planning and Review 

The Office of Management and Budget 

(OMB) reviewed this notice rule under 

Executive Order 12866 (entitled 

‘‘Regulatory Planning and Review’’). A 

determination was made that this notice 

is an ‘‘economically significant 

regulatory action,’’ as defined in section 

3(f)(1) of the Order, and the notice is 

accompanied by an impact analysis. The 

impact analysis is available at http://

www.hud.gov/offices/adm/hudclips/ia/. 

The following provides a brief summary 

of the finding relating to the aggregate 

costs, benefits, and transfers of the pilot 

program contained in the analysis: 

Introduction. As discussed more fully 

in the accompanying impact analysis, 

FHA envisions that the pilot program 

will provide insurance for up to 24,000 

loans over the 2-year period of the pilot 

program, with an expected average loan 

size of $12,500. The program is 

therefore expected to result in the 

extension of $300 million in FHAinsured energy efficiency property 

improvement loans over the 2-year 

period. 

Benefits. The aggregate net benefits 

are obtained by multiplying the 

individual net benefits by the expected 

number of loans and adding the 

expected social benefits of reduced 

energy consumption. As a base case, 

HUD assumes a consumer household 

with annual savings of $1,000, a 0 

percent price growth, and a 7 percent 

discount rate. The present value of a 

technical retrofit for this base case 

scenario is $11,400. Assuming a 

rebound effect of 30 percent yields a 

comfort benefit of $3,400 and energy 

savings of $8,000 per participant.10 As 

noted, approximately 24,000 loans are 

expected over 2 years. For the base case 

scenario, this would equal $41 million 

in comfort benefits and $96 million in 

energy savings for each year of the 

program. The benefits of the FHA 

program may not equal the sum of the 

benefits of all retrofits financed through 

the program, but only reflect the 

benefits of the retrofits that would not 

have occurred without the program; 

however, the existence of significant 

market imperfections and the lack of 

affordable financing make it reasonable 

to assume that a large proportion, if not 

all of the loans, will generate benefits. 

Costs. The cost of receiving the 

energy-savings is the upfront investment 

plus the costs of financing the 

investment. The cost per investment is 

thus equal to the size of the loan. 

Transfers to Consumers. The transfer 

to consumers is equal to the difference 

between the FHA interest rate and the 

interest rates on other loans available for 

the same purpose. As discussed, 

alternative means of financing are 

limited and come with higher interest 

costs. The gain to consumers is not 

limited to reduced loan costs but will 

consist also of the benefits of energyefficient investment. The extent of these 

benefits depends upon the subsidy from 

an FHA loan guarantee. 

The docket file is available for public 

inspection in the Regulations Division, 

Office of General Counsel, Department 

of Housing and Urban Development, 

451 7th Street, SW., Room 10276, 

Washington, DC 20410–0500. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an appointment to review the docket file 

by calling the Regulations Division at 

202–402–3055 (this is not a toll-free 

number). Individuals with speech or 

hearing impairments may access this 

number via TTY by calling the Federal 

Information Relay Service at 800–877– 

8339. 

Environmental Impact 

A Finding of No Significant Impact 

(FONSI) with respect to the 

environment was prepared in 

accordance with HUD regulations at 24 

CFR part 50, which implement section 

102(2)(C) of the National Environmental 

Policy Act of 1969 (42 U.S.C. 4332(2)(C). 

That FONSI is available for public 

inspection between the hours of 8 a.m. 

and 5 p.m., weekdays in the Regulations 

Division, Office of General Counsel, 

Room 10276, Department of Housing 

and Urban Development, 451 7th Street, 

SW., Washington, DC 20410. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an appointment to review the FONSI by 

calling the Regulations Division at 202– 

708–3055 (this is not a toll-free 

number). Individuals with speech or 

hearing impairments may access this 

number via TTY by calling the toll-free 

Federal Information Relay Service at 

(800) 877–8339. 

Dated: October 28, 2010. 

David H. Stevens, 

Assistant Secretary for Housing—Federal 

Housing Commissioner. 

Appendix A 

Home Energy Retrofit Loan Pilot Program 

Criteria for Expressions of Interest From 

Lenders 

Introduction 

Lender participation in the Retrofit Pilot 

Program is voluntary. HUD intends to select 

a limited number of lenders to participate. 

Lenders interested in potentially 

participating in the Retrofit Pilot Program 

must submit an Expression of Interest using 

the format below and following the 

instructions in this notice. Lenders that fail 

to do so will not be considered for 

participation. 

Lenders interested in potentially 

participating may also provide general 

comments on the Pilot Program. Any such 

comments should be submitted separately 

from the Expression of Interest, following the 

instructions in the notice, but may be 

referenced in the Expression of Interest. 

As noted in the notice, all properly 

submitted comments and communications 

submitted to HUD in connection with this 

pilot program will be available for public 

inspection and copying. Expressions of 

Interest should not therefore contain any 

proprietary information. HUD may seek 

additional information from lenders that 

submit Expressions of Interest. Such 

information would be available for public 

inspection and copying as well, unless it is 

proprietary. 

Expressions of Interest are non-binding. 

HUD will execute contracts with 

participating lenders after reviewing all 

Expressions of Interest and the issuance of 

the final notice for the Retrofit Pilot Program 

in the Federal Register. 

Submission Instructions 

To be considered for participation in the 

Pilot Program, a lender must e-mail its 

Expression of Interest to 

FHAPowerSaver@hud.gov by the public 

comment deadline set forth in the DATES

section of this notice. Late submissions and 

Expressions of Interest not submitted to 


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FHAPowerSaver@hud.gov will not be 

considered for participation in the Pilot 

Program. 

Expressions of Interest must address each 

of the 10 factors identified below (labeled I 

through X). There is no minimum or 

maximum page number or required format 

for Expressions of Interest. Lenders should 

provide whatever manner of information they 

believe would be most relevant to HUD in 

evaluating their Expression of Interest in 

participating in the Retrofit Pilot Program. 

Each Expression of Interest must also contain 

a one page executive summary that 

sequentially summarizes the factors 

addressed below. 

Factors to be Addressed in Expressions of 

Interest 

I. Contact Information 

Institution Name: 

Address: 

Contact Name, Title, Phone Number and 

Email Address: 

II. Statement of Interest 

Please describe your institution’s interest 

in potentially participating in the program. 

HUD is interested in understanding the 

reasons for your interest, how it fits with 

your business strategy and goals, and how, 

specifically, your institution would be able to 

meet the goals of the Pilot Program as 

described in the notice. 

III. Status as an FHA Title I or Title II 

Program Lender 

Please provide evidence that your 

institution has a valid Title I contract of 

insurance and is approved under the 

requirements of 24 CFR part 202 to originate, 

purchase, hold, service, or sell loans insured 

under the Title I program regulations at 24 

CFR part 201. 

If you do not meet the criteria above but 

are an approved Title II lender, please 

provide evidence to that effect. 

IV. Experience With Similar Lending 

Initiatives 

Please describe your experience 

successfully originating and/or servicing 

small loans, home equity loans, second liens, 

FHA section 203(k) rehabilitation loans, and/ 

or Title I Property Improvement Loans. 

If your institution does not have such 

experience and capacity, please describe how 

any other experience is relevant to 

determining your institution’s ability to 

participate in the Pilot Program. 

V. Computer System Capabilities 

Please provide evidence of your 

institution’s technical capability to interface 

with FHA through FHA Connection and the 

Single Family Default Monitoring system. 

Note: Participating lenders will be required 

to have the technical capability to interface 

with any other computer systems utilized by 

FHA or its contractors pertaining to the 

Retrofit Pilot Program. 

VI. Audit and Reporting Capabilities 

Please provide evidence of your 

institution’s capacity to provide timely 

reports to FHA on origination and 

performance of loans under the Pilot 

Program, specifically including an electronic 

loan package to HUD for a random sample of 

loans chosen for quality reviews. 

Note: FHA envisions requiring monthly 

reports on loan and portfolio performance. 

VII. Collaborative Capacity 

Please provide evidence of your 

institution’s capacity to work with public 

sector agencies, nonprofit organizations, 

utilities, and/or home improvement 

contractors. 

VIII. Projected Activity and Markets 

Please describe the volume of lending your 

institution anticipates doing under the twoyear Pilot Program and the markets you 

intend to serve. 

Note: FHA may allow less volume than 

described. 

IX. Product Plan and Business Model 

Please describe your institution’s product 

plan and business model as you envision it 

for lending under the Pilot Program. 

Specifically, please inform HUD of the 

following: (1) Will you originate and service 

loans, or originate only? (2) What do you 

expect in terms of loan performance? (3) 

What fees will you charge? (4) What steps 

will you take to ensure the lowest cost of 

financing for consumers? (5) How will you 

market the product? (6) To what extent will 

you work with public agencies, contractors, 

utilities, and other organizations? (7) How 

will you ensure quality control of 

contractors? (8) Will you hold loans, sell 

whole loans and/or issue securities backed 

by pools of loans, or some combination? 

X. Use of HUD Incentive Payments 

To the extent that you request to utilize 

funds from HUD for incentive payments to 

lower costs for borrowers, either through 

lower interest rates, lower servicing costs, 

and potentially other purposes, please 

describe how much funding you request, the 

number of loans you anticipate making (a 

range is appropriate if necessary), and the 

bona fide benefit that would accrue to 

borrowers through the uses of the funds. 

Note: As noted, Expressions of Interest are 

non-binding. The purpose of this question is 

to get a sense of your institution’s intent at 

this stage, understanding that specifics may 

change. 

Note: To the extent these answers would 

contain proprietary information, please 

contact HUD based on information provided 

in the notice. 

XI. Final comments 

Please provide any additional information 

that would be relevant to HUD in evaluating 

your Expression of Interest to participate in 

the Retrofit Pilot Program, either as a 

narrative response or attachment(s), or both. 

Appendix B 

Eligible Improvements Under Retrofit Pilot 

Program 

Improvement Standards 

Whole House ............................... Whole house air sealing measures, including interior and exterior measures, utilizing sealants, caulks, insulating foams, gaskets, weather-stripping, mastics, and other building materials in accordance with BPI 

standards or other procedures approved by the Secretary. (Reference: http://www.bpi.org/standards.aspx) 

Insulation: Attic ............................ Attic insulation measures that— 

(A) Include sealing of air leakage between the attic and the conditioned space, in accordance with BPI standards or the attic portions of the DOE or EPA thermal bypass checklist or other procedures approved by the 

Secretary; 

(B) add at least R–19 insulation to existing insulation; 

(C) result in at least R–38 insulation in DOE climate zones 1 through 4 and at least R–49 insulation in DOE 

climate zones 5 through 8, including existing insulation, within the limits of structural capacity, except that a 

State, with the approval of the Secretary, may designate climate zone sub regions as a function of varying 

elevation; and (Map Page: http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_insulation_table) 

(D) cover at least— 

(i) 100 percent of an accessible attic; or 

(ii) 75 percent of the total conditioned footprint of the house. 

(BPI Standards reference: http://www.bpi.org/standards.aspx) 

Insulation: Wall ............................ Wall insulation that— 

(A) is installed in accordance with BPI standards or other procedures approved by the Secretary; 

(B) is to full-stud thickness or adds at least R–10 of continuous insulation; and 

(C) covers at least 75 percent of the total external wall area of the home. 


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Improvement Standards 

(BPI Reference: http://www.bpi.org/standards.aspx) 

Insulation: Crawl Space .............. Crawl space insulation or basement wall and rim joist insulation that is installed in accordance with BPI 

standards or other procedures approved by the Secretary and— 

(A) covers at least 500 square feet of crawl space or basement wall and adds at least— 

(i) R–19 of cavity insulation or R–15 of continuous insulation to existing crawl space insulation; or 

(ii) R–13 of cavity insulation or R–10 of continuous insulation to basement walls; and 

(B) fully covers the rim joist with at least R–10 of new continuous or R–13 of cavity insulation. 

(BPI Reference: http://www.bpi.org/standards.aspx) 

Duct Sealing ................................ Duct sealing or replacement and sealing that— 

(A) is installed in accordance with BPI standards or other procedures approved by the Secretary; and 

(B) in the case of duct replacement and sealing, replaces and seals at least 50 percent of a distribution system of the home. 

(BPI Reference: http://www.bpi.org/standards.aspx) 

Reference: http://www1.eere.energy.gov/buildings/windowsvolumepurchase/ 

Skylight Replacement .................. Skylight replacement that meets most recent Energy Star specifications. 

Door Replacement ...................... Door replacement that meets most recent Energy Star specifications. 

Storm Doors ................................ Storm doors that— 

• meet the most recent Energy Star specifications 

Storm Windows ........................... Storm windows that— 

• meet the requirements for low-e storm windows under the Department of Energy Windows Volume Purchase Program 

Heating System Gas/Propane/Oil 

Boiler/Furnace.

Heating system replacement that meets most recent Energy Star specifications. 

Air Conditioner ............................. Air-source air conditioner or air-source heat pump replacement with a new unit that meets most recent Energy Star specifications. 

Geothermal .................................. Heating or cooling system replacement with an Energy Star qualified geothermal heat pump that meets Tier 

2 efficiency requirements and that is installed in accordance with ANSI/ACCA Standard 5 QI–2007. 

Water Heater ...............................

(gas, propane, electric, tank less) 

Replacement of a natural gas, propane, or electric water heater that meets most recent Energy Star specifications. 

Water Heater (solar) .................... Solar water heating property must be Energy Star Qualified, or certified by the Solar Rating and Certification 

Corporation or by comparable entity endorsed by the state in which the system is installed. 

Fuel Cells and Micro turbine Systems.Efficiency of at least 30% and must have a capacity of at least 0.5 kW. 

Solar Panels (Photovoltaic Systems).Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical 

code requirement. 

Wind Turbine Residential ............ A wind turbine collects kinetic energy from the wind and converts it to electricity that is compatible with a 

home’s electrical system, and has a nameplate capacity of no more than 100 kilowatts. 

Roofs Metal & Asphalt ................ Metal or asphalt roofs that meet most recent Energy Star specifications. 

[FR Doc. 2010–28015 Filed 11–9–10; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE INTERIOR 

National Natural Landmark 

Designations 

AGENCY: National Park Service, 

Department of the Interior. 

ACTION: Public Notice of National 

Natural Landmark Designations. 

SUMMARY: On January 16, 2009, then 

Secretary of the Interior Dirk 

Kempthorne designated the following 

National Natural Landmarks: Big Bone 

Lick, Boone County, Kentucky; Cave 

Without a Name, Kendall County, 

Texas; Chazy Fossil Reef, Grand Isle 

County, Vermont and Clinton County, 

New York; and Nottingham Park 

Serpentine Barrens, Chester County, PA 

FOR FURTHER INFORMATION CONTACT: Dr. 

Margaret Brooks, National Natural 

Landmark Program Manager, at 520– 

791–6470. 

SUPPLEMENTARY INFORMATION: The 

Secretary of the Interior established the 

National Natural Landmarks Program in 

1962, under the authority of the Historic 

Sites Act of 1935 (16 U.S.C. 461 et seq.). 

The National Park Service manages this 

program using regulations found at 36 

CFR part 62. Potential natural 

landmarks are identified in studies by 

the NPS and from other sources, 

evaluated by expert natural scientists, 

and if determined nationally significant, 

designated as landmarks by the 

Secretary of the Interior. When 

designated, a landmark is included in 

the National Registry of Natural 

Landmarks, which currently lists 586 

National Natural Landmarks 

nationwide. Of the 586 listed 

landmarks, half are administered solely 

by public agencies; i.e., Federal, State, 

county or municipal governments. 

Nearly one-third are owned solely by 

private parties. 

National Natural Landmark 

designation is not a land withdrawal, 

does not change the ownership of an 

area, does not dictate activity, and does 

not imply a right of public access. 

However, Federal agencies should 

consider impacts to the unique 

properties of these nationally significant 

areas in carrying out their 

responsibilities under the National 

Environmental Policy Act (42 U.S.C. 

4321 et seq.). Designation could result 

in State or local planning or land use 

implications. National Natural 

Landmark preservation is made possible 

by the long-term, voluntary 

commitments of public and private 

owners to protect the outstanding values 

of the areas. Information on the National 

Natural Landmarks Program can be 

found in 36 CFR part 62 or on the 

Internet at http://www.nature.nps.gov/ 

nnl. 

Site Descriptions: 

The Big Bone Lick site is located 

within the State of Kentucky, southwest 

of Cincinnati, Ohio, and is unique in the 

Interior Low Plateaus for its 

combination of salt springs and 

associated late Pleistocene bone beds. 

Many types of animals, especially large 

herbivores, were attracted to the springs 

for salt, and became mired in the mud. 

The site became a burial ground over 

time. Layers of disarticulated bones 

have been uncovered to depths of 30 

feet. The site has been referred to as a 

major New World fossil locality, and 


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