Federal Register / Vol. 80, No. 9 / Wednesday, January 14, 2015 / Proposed Rules 1855 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 112 

[Docket No. FDA–2014–N–2244] 

RIN 0910–AG35 

Draft Environmental Impact Statement 

for the Proposed Rule, Standards for 

Growing, Harvesting, Packing, and 

Holding of Produce for Human 

Consumption; Notice for Public 

Meeting on Draft Environmental Impact 

Statement 

Correction 

FR proposed rule document 2015– 

00205 beginning on pages 1478 in the 

issue of Monday, January 12, 2015, was 

never placed on public inspection and 

was published in error. It should be 

removed. 

[FR Doc. C1–2015–00205 Filed 1–12–15; 4:15 pm] 

BILLING CODE 1505–01–D 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 200 and 232 

[Docket No. FR–5632–P–01] 

RIN 2502–AJ27 

Federal Housing Administration (FHA): 

Updating Regulations Governing HUD 

Fees and the Financing of the 

Purchase and Installation of Fire 

Safety Equipment in FHA-Insured 

Healthcare Facilities 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Proposed rule. 

SUMMARY: FHA insures mortgage loans 

to facilitate the construction, substantial 

rehabilitation, purchase, and 

refinancing of multifamily housing 

under the National Housing Act, and 

nursing homes, intermediate care 

facilities, board and care homes, and 

assisted-living facilities (collectively 

residential healthcare facilities) under 

section 232 of the National Housing Act 

(the Section 232 program). Through this 

rule, HUD proposes to update HUD fees 

for multifamily housing and residential 

healthcare facilities and to update and 

streamline the Section 232 program 

regulations that govern the financing of 

the purchase and installation of fire 

safety equipment in the insured 

healthcare facilities, which have not 

been substantially updated in over 20 

years. The proposed changes would give 

HUD flexibility in raising or lowering 

fees, and for residential healthcare 

facilities, streamline the loan 

application process by eliminating 

unnecessary requirements, conforming 

needed requirements to current industry 

practices, and allowing for HUD to 

centralize the loan application process. 

DATES: Comment Due Date: March 16, 

2015. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule 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 

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 

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 rule. 

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 

appointment to review the public 

comments must be scheduled in 

advance 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 Relay Service at 800–877– 

8339. Copies of all comments submitted 

are available for inspection and 

downloading at www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: For 

information about: HUD’s Multifamily 

Housing program, contact Dan Sullivan, 

Deputy Director, Office of Multifamily 

Housing Development, Office of 

Housing, Department of Housing and 

Urban Development, 451 7th Street SW., 

Room 6148, Washington, DC 20410– 

8000; telephone number 202–708–1142; 

HUD’s Healthcare program, contact 

Vance Morris, Office of Healthcare 

Programs, Office of Housing, 

Department of Housing and Urban 

Development, 451 7th Street SW., Room 

6134, Washington, DC 20410–8000; 

telephone number 202–402–2419. The 

telephone numbers listed above are not 

toll-free numbers. Persons with hearing 

or speech impairments may access this 

number through TTY by calling the tollfree Federal Relay Service at 800–877– 

8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

HUD Fees 

Section 207(d) of the National 

Housing Act (12 U.S.C. 1713) authorizes 

the Secretary, as he determines 

necessary, to charge and collect fees for 

the appraisal of a property or project 

offered for insurance and for the 

inspection of such property, as long as 

such fees do not exceed one percent of 

the amount of the mortgage. Despite the 

flexibility to set fees given to the 

Secretary in the statute, relevant HUD 

fees are currently set by regulation in 

parts 200 and 232, which does not allow 

HUD the flexibility necessary to adapt to 

market changes in a timely manner. 

Loans To Finance the Purchase of Fire 

Safety Equipment 

Under section 232 of the National 

Housing Act (12 U.S.C. 1715w), FHA 

insures mortgage loans to finance the 

development of residential healthcare 

facilities. HUD’s regulations for the 

Section 232 program are codified in 24 

CFR part 232. In addition to insuring 

such mortgage loans, FHA insures, 

under the Section 232 program, loans to 

finance the purchase and installation of 

fire safety equipment in insured 

healthcare facilities. 

The Fire Safety Equipment Loan Act 

(Pub. L. 93–204, approved December 28, 

1973) amended section 232 of the 

National Housing Act to provide that 


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1856 Federal Register / Vol. 80, No. 9 / Wednesday, January 14, 2015 / Proposed Rules 

1The LSC is administered, trademarked, 

copyrighted, and published by the National Fire 

Protection Association. The standard primarily 

addresses ‘‘those construction, protection, and 

occupancy features necessary to minimize danger to 

life from the effects of fire, including smoke, heat, 

and toxic gases created during a fire.’’ 

2A CMS certified long-term care facility is one 

approved to participate in the Medicare and 

Medicaid programs. 

3On May 12, 2014, CMS published a final rule, 

at 79 FR 27106, to permit a very limited extension 

of the automatic sprinkler due date for a facility that 

is building a replacement or undergoing 

modification to unsprinklered areas. 

4Under section 1616(e) of the Social Security Act, 

States are required to establish or designate one or 

more State or local authorities that must establish, 

maintain and ensure the enforcement of standards 

for any category of institution, foster home, or group 

living arrangement in which (as determined by the 

State) a significant number of SSI recipients are 

residing or are likely to reside. Standards shall be 

appropriate to the needs of the recipient and the 

character of the facilities involved and shall govern 

such matters as admission policies, safety, 

sanitation, and protection of civil rights. Further, 

each State is required to maintain records of 

information concerning standards, procedures 

available to ensure enforcement of the standards, 

and a list of waivers of standards and violations of 

standards by specific facilities. These records must 

be made available annually to the public. To ensure 

compliance with the requirements of section 

1616(e) of the Social Security Act, each State must 

certify annually to SSA’s Office of the 

Commissioner that designated licensing authorities 

have implemented all aspects of the program. 

5The Life Safety Code addresses those 

construction, protection, and occupancy features 

necessary to minimize danger to life from the effects 

of fire, including smoke, heat, and toxic gases 

created during a fire. The Code also addresses 

protective features and systems, building services, 

operating features, maintenance activities, and 

other provisions in recognition of the fact that 

achieving an acceptable degree of life safety 

depends on additional safeguards to provide 

adequate egress time or protection for people 

exposed to fire. 

insurable equipment under the Section 

232 program includes the cost of 

installation of fire safety equipment (see 

12 U.S.C. 1715w(i)). This law was 

enacted to help residential healthcare 

facilities comply with the 1967 Life 

Safety Code of the National Fire 

Protection Program (LSC).1

In 1974, HUD established its Fire 

Safety Equipment Loan Program 

(FSELP) and promulgated regulations in 

24 CFR part 232, subpart C, to 

implement the program (Subpart C 

regulations). On August 13, 2008, at 73 

FR 47075, the Centers for Medicare and 

Medicaid Services (CMS) published in 

the Federal Register a final rule that 

requires every CMS certified long-term 

care facility 2 to have automatic fire 

sprinkler systems installed no later than 

August 13, 2013.3 CMS requirements for 

these facilities to have automatic 

sprinkler systems highlights HUD’s 

need to update the Section 232 

regulations that govern the financing of 

the purchase and installation of fire 

safety equipment. 

II. This Proposed Rule 

Update and Streamline HUD Fees 

A. Application and Commitment 

Fees. Currently, under § 232.505(c), the 

borrower is required to pay, as an 

application fee, $2.00 per thousand 

dollars of the amount of the fire safety 

loan. Under § 232.510(d), the borrower 

must pay a commitment fee which, 

when added to the application fee, will 

aggregate $4.00 per thousand of the 

amount of the fire safety loan but with 

a minimum of $50.00 for both fees. 

HUD’s general ‘‘fee’’ provisions in 24 

CFR 200.40, entitled ‘‘HUD Fees’’, 

which set forth the applicable fees for 

relevant FHA-insured mortgages, 

however, combine the application fee 

and commitment fee rather than 

providing two separate fees as is 

currently the case in the Subpart C 

regulations. 

To bring consistency among these fee 

regulations and to more clearly set forth 

HUD’s fee structure, this rule proposes 

to revise § 232.505(c), entitled 

‘‘Application fee’’ and § 232.510(d) 

entitled ‘‘Commitment fee’’ to crossreference to a new § 200.40(d)(2), which 

would be entitled ‘‘Application fee— 

Section 232 Programs.’’ Specifically, in 

§ 200.40, HUD proposes to amend 

§ 200.40(d) to designate the existing text 

in paragraph (d) as paragraph (d)(1), 

revise newly designated paragraph 

(d)(1) to allow the Secretary to decrease 

the application fee, and add a new 

paragraph (d)(2) that would provide the 

Secretary with flexibility to set the 

application fee for insured loans to 

finance the purchase and installation of 

fire safety equipment. 

B. Maximum fees and charges. In 

§ 232.520, the proposed rule would 

cross-reference 24 CFR 200.40 and 24 

CFR 200.41. These two regulatory 

sections contain the fees that apply to 

most mortgages insured by FHA, 

including Section 232 mortgages. 

C. Inspection fee. In § 232.522, the 

proposed rule would cross-reference 24 

CFR 200.40 and 24 CFR 200.41 for the 

same reasons stated above. 

D. Refund of fees. Since this rule 

proposes to eliminate the commitment 

fee in the Subpart C regulations, the rule 

also proposes to eliminate the 

requirement in § 232.515 that the 

commitment fee be refunded. The 

provisions allowing for refund of the 

application fee remains unchanged. 

Update and Streamline 24 CFR 232 

Subpart C Regulations 

Through this rule, HUD also proposes 

to update and streamline the 

requirements of other Subpart C 

regulations. HUD’s Subpart C 

regulations currently provide that fire 

safety equipment means equipment that 

is purchased, installed, and maintained 

in a nursing home, intermediate care 

facility, assisted living facility, or board 

and care home and that meets the 

following standards for the applicable 

occupancy: (i) The Life Safety Code of 

the National Fire Protection Association 

(any edition after 1966); or (ii) A 

standard mandated by a State, under the 

provisions of section 1616(e) of the 

Social Security Act; 4 or (iii) Any 

appropriate requirement approved by 

the Secretary of Health and Human 

Services (HHS) for providers of services 

under title XVIII or title XIX of the 

Social Security Act. (These sections 

establish the Medicare and Medicaid 

programs, respectively.) Therefore, this 

rule does not need to propose language 

to require the installation of an 

automated fire sprinkler system as 

recently promulgated by CMS but, given 

that this requirement is now in place, 

HUD seeks to streamline its regulations 

to assist owners of healthcare facilities 

to obtain a loan, if necessary, to finance 

the purchase and installation of such 

systems. The streamlining of the 

Subpart C regulations proposed by this 

rule would primarily focus on removing 

or revising several fees required in the 

Subpart C regulations that HUD has 

determined are no longer needed or, 

alternatively, are not set at sufficient 

levels. 

A. Definitions. This rule proposes to 

revise two definitions in § 232.500. 

First, HUD would revise the definition 

of ‘‘fire safety equipment’’ in 

§ 232.500(c)(1) regarding the standard 

for acceptable fire safety equipment. 

The proposed rule would update the 

outdated standard in § 232.500(c)(1) 

which currently requires ‘‘fire safety 

equipment’’ to meet the standards for 

applicable occupancy of any edition of 

the Life Safety Code 5 of the National 

Fire Protection Association after 1966 

(§ 232.500(c)(1)(i)); or a standard 

mandated by a State, under the 

provisions of section 1616(e) of the 

Social Security Act (§ 232.500(c)(1)(ii)); 

or any appropriate requirement 

approved by the Secretary of HHS for 

providers of services under title XVIII or 

title XIX of the Social Security Act 

(§ 232.500(c)(1)(iii)). 

For § 232.500(c)(1)(i), this rule 

proposes to instead require ‘‘fire safety 

equipment’’ to meet the applicable 

provisions of the edition of the LSC 

adopted by the Secretary of HHS. For 

§ 232.500(c)(1)(ii), HUD proposes no 

change. For § 232.500(c)(1)(iii), HUD 


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proposes to remove this requirement 

since approval by the Secretary of HHS 

is achieved through the change to 

§ 232.500(c)(1)(i). This update will 

allow HUD’s regulation to continue to 

reflect the LSC standards specified by 

HHS without undergoing the lengthy 

rulemaking process when the standards 

are changed over time. 

Second, the proposed rule would 

revise the definition of ‘‘equipment 

cost’’ in § 232.500(e) to eliminate the 

involvement of the Secretary of HHS in 

estimating the reasonable cost of the fire 

safety equipment installation. As 

§ 232.500(e) currently provides, the 

FHA Commissioner makes the 

determination of the reasonableness of 

cost, while the Secretary of HHS only 

provides an estimate. HUD has 

determined that the estimate by the 

Secretary of HHS is an unnecessary 

step. 

B. Applications. This proposed rule 

would remove the requirement at 

§ 232.505(a) that an application for 

insurance of a fire safety loan under part 

232 must be considered in connection 

with a proposal approved by the 

Secretary of HHS. In order to streamline 

the loan application process, this 

proposed change reflects HUD’s 

decision that approval of a proposal by 

the Secretary of HHS in connection with 

each loan application is unnecessary. 

Section 232.615 would still require, 

however, that the facility requesting the 

loan meet HHS fire safety requirements. 

In § 232.505(b), entitled ‘‘Filing of 

Application,’’ HUD proposes to remove 

the requirement to submit applications 

to HUD’s local offices. This rule would 

allow HUD to centralize the application 

process for insurance of a fire safety 

loan. HUD believes that the 

centralization effort will facilitate 

review of initial applications. 

C. HHS Determination of the Need for 

Fire Safety Equipment. In § 232.510, in 

addition to proposing to eliminate the 

‘‘commitment fee,’’ HUD proposes in 

§ 232.510(b), to remove the requirement 

that HHS must first determine that a 

facility needs fire safety equipment 

before FHA will insure the financing for 

purchase and installation of the 

equipment. As stated earlier, § 232.615 

would continue to require that the 

healthcare facility meet HHS fire safety 

requirements upon completion of 

installation in order for the facility to be 

an eligible borrower. Therefore, a 

provision that the Secretary of HHS 

must approve each facility before HUD 

makes a commitment is superfluous. 

D. Method of loan payment and 

amortization period. For § 232.540, the 

proposed rule would cross reference 24 

CFR 200.82. Section 200.82 establishes 

the maximum and minimum mortgage 

term, and specifies that the mortgage 

shall contain complete amortization 

satisfactory to the Commissioner. 

E. Maximum loan amount. In 

§ 232.565, the maximum loan amount 

would be revised to allow for the 

financing of fees, similar to the 

regulations governing fees in other 

Section 232 loan insurance programs. 

Specifically, financing of fees is 

permitted for Section 232 refinance and 

acquisition transactions (see 

§ 232.903(c) and § 232.903(d), 

respectively). 

F. Endorsement of credit instrument. 

In § 232.570, which establishes 

qualifications for the endorsement of the 

credit instrument, the proposed rule 

would eliminate the requirement that 

the Secretary of HHS submit a statement 

that the fire safety equipment has been 

satisfactorily installed. The proposed 

rule would replace this provision with 

a requirement of a certification that the 

improvements were installed as 

required by § 232.500(c). As stated 

earlier in regard to other proposed 

changes, § 232.615 would still require 

the facility to meet HHS fire safety 

requirements in order for HUD to insure 

the loan. 

G. Contract requirements. In 

§ 232.605, the proposed rule would 

remove the limitation that contracts be 

either lump sum or cost plus contracts 

and instead allow such contracts as may 

be specified by the FHA Commissioner. 

H. Certification of cost requirements. 

In § 232.610, the proposed rule would 

require a certification of actual cost be 

made for all forms of contract, instead 

of only when a cost plus form of 

contract is used. Further, it would 

eliminate the requirement that the 

amount of the loan be adjusted to reflect 

the actual cost to the borrower of the 

improvements. 

I. Eligible borrowers. In § 232.615, the 

proposed rule would revise the 

definition of ‘‘eligible borrowers’’ to 

eliminate all references to the facility 

meeting HHS health and safety 

requirements. However, the proposed 

rule would retain the provision that 

requires the facility to meet HHS fire 

safety requirements. HUD’s proposed 

changes reflect that the Subpart C 

regulations are about FHA-insured 

healthcare facilities having the 

appropriate fire safety equipment and 

were not promulgated to implement all 

requirements that HHS may require of 

healthcare facility providers to ensure 

eligibility to receive Medicare and 

Medicaid services. 

J. Determination of compliance with 

HHS. In § 232.620, the proposed rule 

would eliminate the requirement that an 

application for fire safety equipment be 

accompanied by a statement from HHS 

or the HHS Secretary’s designee, such as 

a State, that the facility will meet 

pertinent health and safety requirements 

of HHS—other than the fire safety 

equipment requirements—once the fire 

safety equipment has been installed. 

Instead of this requirement, the 

proposed rule would substitute a 

reference to certification of compliance 

with HHS, Federal, state and local 

requirements for fire safety equipment 

to be provided prior to endorsement. 

The proposed language in this section 

would maintain consistency with the 

changes made in § 232.615 and the 

changes are made for the same reason. 

III. Findings and Certifications 

Regulatory Review—Executive Orders 

12866 and 13563 

Under Executive Order 12866 

(Regulatory Planning and Review), a 

determination must be made whether a 

regulatory action is significant and 

therefore, subject to review by the Office 

of Management and Budget (OMB) in 

accordance with the requirements of the 

order. Executive Order 13563 

(Improving Regulations and Regulatory 

Review) directs executive agencies to 

analyze regulations that are ‘‘outmoded, 

ineffective, insufficient, or excessively 

burdensome, and to modify, streamline, 

expand, or repeal them in accordance 

with what has been learned.’’ Executive 

Order 13563 also directs that, where 

relevant, feasible, and consistent with 

regulatory objectives, and to the extent 

permitted by law, agencies are to 

identify and consider regulatory 

approaches that reduce burdens and 

maintain flexibility and freedom of 

choice for the public. 

Because this proposed rule merely 

updates out-of-date practices, 

streamlines requirements and reduces 

burdens, it is not determined to be a 

‘‘significant regulatory action’’ as 

defined in section 3(f) of Executive 

Order 12866. By updating the 

regulations in this way, FHA is not 

causing a material effect on the 

economy, interfering with an action or 

planned action of another agency, 

materially changing the budgetary 

impact of the loan program or the rights 

or obligations of its recipients, or raising 

any novel legal or policy issues. The 

proposed rule simply consolidates fees, 

allows the Secretary discretion in 

setting fees consistent with section 

207(d) of the National Housing Act, and 

streamlines the loan application 

process. Furthermore, the proposed rule 

comports with the directive of Executive 

Order 13563. As stated in the preamble, 


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1858 Federal Register / Vol. 80, No. 9 / Wednesday, January 14, 2015 / Proposed Rules 

the regulations being modified have not 

been substantially updated for a long 

time. 

Paperwork Reduction Act 

The information collection 

requirements contained in this proposed 

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), and 

approved under OMB control numbers 

2502–0605 and 2502–0541. In 

accordance with the Paperwork 

Reduction Act, an agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless the collection 

displays a currently valid OMB control 

number. 

Environmental Review 

A Finding of No Significant Impact 

with respect to the environment has 

been made in accordance with HUD 

regulations in 24 CFR part 50 that 

implement section 102(2)(C) of the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4332(2)(C)). The 

Finding is available for public 

inspection during regular business 

hours in the Regulations Division, 

Office of General Counsel, Department 

of Housing and Urban Development, 

451 Seventh Street SW., Room 10276, 

Washington, DC 20410–0500. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an appointment to review the Finding 

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 

Relay Service at 800–877–8339. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531– 

1538) (UMRA) establishes requirements 

for federal agencies to assess the effects 

of their regulatory actions on state, 

local, and tribal governments, and on 

the private sector. This rule would not 

impose any federal mandates on any 

state, local, or tribal governments, or on 

the private sector, within the meaning of 

the UMRA. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) generally requires an 

agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. 

The proposed rule imposes no 

requirements on small businesses. In 

fact, streamlining FSELP requirements 

should ease an existing burden on those 

small businesses seeking to 

accommodate acute care patients and 

those needing to upgrade or install fire 

safety equipment to meet HHS 

requirements. 

Accordingly, the undersigned certifies 

that this proposed rule will not have a 

significant economic impact on a 

substantial number of small entities. 

Notwithstanding HUD’s determination 

that this rule will not have a significant 

effect on a substantial number of small 

entities, HUD specifically invites 

comments regarding any less 

burdensome alternatives to this rule that 

will meet HUD’s objectives as described 

in the preamble to this rule. 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule imposes either 

substantial direct compliance costs on 

state and local governments and is not 

required by statute, or the rule preempts 

state law, unless the agency meets the 

consultation and funding requirements 

of section 6 of the Executive Order. This 

rule would not have federalism 

implications and would not impose 

substantial direct compliance costs on 

state and local governments or preempt 

state law within the meaning of the 

Executive Order. 

Catalogue of Federal Domestic 

Assistance 

The Catalogue of Federal Domestic 

Assistance Number for the Mortgage 

Insurance Nursing Homes, Intermediate 

Care Facilities, Board and Care Homes 

and Assisted Living Facilities is 14.129; 

for Mortgage Insurance-Rental Housing 

is 14.134; for Mortgage Insurance for the 

Purchase or Refinancing of Existing 

Multifamily Housing Projects is 14.155. 

List of Subjects 

24 CFR Part 200 

Administrative practice and 

procedure, Claims, Equal employment 

opportunity, Fair housing, Home 

improvement, Housing standards, Lead 

poisoning, Loan programs—housing and 

community development, Mortgage 

insurance, Organization and functions 

(Government agencies), Penalties, 

Reporting and recordkeeping. 

24 CFR Part 232 

Fire prevention, Health facilities, 

Loan programs-health, Loan programshousing and community development, 

Mortgage insurance, Nursing homes, 

Reporting and recordkeeping 

requirements. 

Accordingly, for the reasons stated 

above, HUD proposes to amend 24 CFR 

parts 200 and 232 as follows: 

PART 200—INTRODUCTION TO FHA 

PROGRAMS 

■ 1. The authority citation for 24 CFR 

part 200 continues to read as follows: 

Authority: 12 U.S.C. 1702–1715z–21; 42 

U.S.C. 3535(d). 

■ 2. Amend § 200.40 by: 

■ a. Redesignate paragraph (d) as 

paragraph (d)(1); 

■ b. Revise the paragraph heading and 

first sentence of newly redesignated 

(d)(1); and 

■ c. Add paragraph (d)(2). 

The revisions and addition read as 

follows: 

§ 200.40 HUD fees. 

* * * * * 

(d)(1) Application fee—firm 

commitment: General. An application 

for firm commitment shall be 

accompanied by an applicationcommitment fee in an amount 

determined by the Secretary, which 

when added to any prior fees received 

in connection with the same 

application, shall not exceed $5.00 per 

thousand dollars of the requested 

mortgage amount to be insured. * * * 

(2) Application fee—Section 232 

Programs. For purposes of mortgages 

insured under HUD’s regulations in 24 

CFR part 232, subpart C, an application 

for firm commitment shall be 

accompanied by an application fee in an 

amount determined by the Secretary, 

which shall not exceed $5.00 per 

thousand dollars of the requested 

mortgage amount to be insured. 

* * * * * 

PART 232—MORTGAGE INSURANCE 

FOR NURSING HOMES, 

INTERMEDIATE CARE FACILITIES, 

BOARD AND CARE HOMES, AND 

ASSISTED LIVING FACILITIES 

■ 3. The authority citation for 24 CFR 

part 232 continues to read as follows: 

Authority: 12 U.S.C. 1715b; 1715w; 42 

U.S.C. 3535(d). 

Subpart C—Eligibility Requirements— 

Supplemental Loans to Finance 

Purchase and Installation of Fire 

Safety Equipment 

■ 4. In § 232.500, revise paragraphs 

(c)(1) and (e) to read as follows: 

§ 232.500 Definitions. 

* * * * * 

(c) * * * 


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(1) * * * 

(i) The edition of The Life Safety Code 

of the National Fire Protection 

Association as accepted by the 

Department of Health and Human 

Services in 42 CFR 483.70; or 

(ii) A standard mandated by a State 

under the provisions of section 1616(e) 

of the Social Security Act. 

* * * * * 

(e) Equipment cost means the 

reasonable cost of fire safety equipment 

fully installed as determined by the 

Commissioner. 

* * * * * 

■ 5. Amend § 232.505 by: 

■ a. Removing paragraph (a); and 

■ b. Redesignating paragraphs (b) and 

(c) as paragraphs (a) and (b), and 

revising the newly redesignated 

paragraphs. 

The revisions read as follows: 

§ 232.505 Application and application fee. 

(a) Filing of application. An 

application for insurance of a fire safety 

loan for a nursing home, intermediate 

care facility, assisted living facility or 

board and care home shall be submitted 

on an approved HUD form by an 

approved lender and by the owners of 

the project to the HUD office. 

(b) Application fee. See 24 CFR 

200.40(d)(2). 

■ 6. Amend § 232.510 by: 

(a) Revising paragraphs (b), (c) and 

(d); 

(b) Removing paragraph (e); and 

(c) Redesignating paragraph (f) as 

paragraph (e) and revising 

newlydesignated paragraph (e) to read 

as follows: 

§ 232.510 Commitment and commitment 

fee. 

* * * * * 

(b) Type of commitment. The 

commitment will provide for the 

insurance of the loan after satisfactory 

completion of installation of the fire 

safety equipment, as determined by the 

Commissioner. 

(c) Term of commitment. A 

commitment shall have a term as the 

Commissioner deems necessary for 

satisfactory completion of installation. 

(d) Commitment fee. See 24 CFR 

200.40(d)(2). 

(e) Increase in commitment prior to 

endorsement. An application, filed prior 

to endorsement, for an increase in the 

amount of an outstanding firm 

commitment shall be accompanied by 

an additional application fee. The 

additional application fee shall be in an 

amount determined by the Secretary 

equal to the amount determined under 

24 CFR 200.40(d)(2), which shall not 

exceed $5.00 per thousand dollars of the 

amount of the requested increase. If an 

inspection fee was required in the 

original commitment, an additional 

inspection fee shall be paid in an 

amount computed at the same dollar 

rate per thousand dollars of the amount 

of increase in commitment as was used 

for the inspection fee required in the 

original commitment. The additional 

inspection fee shall be paid prior to the 

date installation of fire safety equipment 

is begun, or, if installation has begun, it 

shall be paid with the application for 

increase. 

■ 7. Revise § 232.515 to read as follows: 

§ 232.515 Refund of fees. 

If the amount of the commitment 

issued or an increase in loan prior to 

endorsement is less than the amount 

applied for, the Commissioner shall 

refund the excess amount of the 

application fee submitted by the 

applicant. If an application is rejected 

before it is assigned for processing, or in 

such other instances as the 

Commissioner may determine, the 

entire application fee or any portion 

thereof may be returned to the 

applicant. 

■ 8. Revise § 232.520 to read as follows: 

§ 232.520 Maximum fees and charges by 

lender. 

See 24 CFR 200.40 titled ‘‘HUD fees’’ 

and 200.41 titled ‘‘Maximum mortgage 

fees and charges’’ for maximum fees and 

charges applicable to mortgages insured 

under 24 CFR part 232. 

■ 9. Revise § 232.522 to read as follows: 

§ 232.522 Inspection fee. 

See 24 CFR 200.40 titled ‘‘HUD fees’’ 

and 200.41 titled ‘‘Maximum mortgage 

fees and charges’’ for maximum fees and 

charges applicable to mortgages insured 

under 24 CFR part 232. 

■ 10. Revise § 232.540 to read as 

follows: 

§ 232.540 Method of loan payment and 

amortization period. 

See 24 CFR 200.82 titled ‘‘Maturity’’ 

for loan payment and amortization 

period requirements applicable to 

mortgages insured under 24 CFR part 

232. 

■ 11. In § 232.565, revise the first 

sentence to read as follows: 

§ 232.565 Maximum loan amount. 

The principal amount of the loan 

shall not exceed the lower of the 

Commissioner’s estimate of the cost of 

the fire safety equipment, including the 

cost of installation and eligible fees, or 

the amount supported by ninety percent 

(90%) of the residual income, which is 

ninety percent (90%) of the amount of 

net income remaining after payment of 

all existing debt service requirements, as 

determined by the Commissioner. * * * 

■ 12. In § 232.570, revise paragraph (c) 

to read as follows: 

§ 232.570 Endorsement of credit 

instrument. 

* * * * * 

(c) Certification that fire safety 

equipment was installed as required by 

§ 232.500(c). 

■ 13. Revise § 232.605 to read as 

follows: 

§ 232.605 Contract requirements. 

The contract between the mortgagor 

and the general contractor may be in the 

form of a lump sum contract, a cost plus 

contract, or different or alternative 

forms of contract specified by the 

Commissioner. 

■ 14. In § 232.610, revise paragraph (a) 

to read as follows: 

§ 232.610 Certification of cost 

requirements. 

(a) Certificate and adjustment. No 

loan shall be insured unless a 

certification of actual cost is made by 

the contractor. 

* * * * * 

■ 15. In § 232.615, revise paragraph (a) 

to read as follows: 

§ 232.615 Eligible borrowers. 

(a) In order to be eligible as a 

borrower under this subpart the 

applicant shall be a profit or non-profit 

entity, which owns a nursing home or 

intermediate care facility for which the 

Secretary of Health and Human Services 

has determined that the installation of 

fire safety equipment in such facility is 

necessary to meet the applicable 

requirements of the Secretary of Health 

and Human Services for providers of 

services under Title XVIII and Title XIX 

of the Social Security Act and that upon 

completion of the installation of such 

equipment the nursing home or 

intermediate care facility will meet the 

applicable fire safety requirements of 

HHS. Until the termination of all 

obligations of the Commissioner under 

an insurance contract under this subpart 

and during such further period of time 

as the Commissioner shall be the owner, 

holder, or reinsurer of the loan, the 

borrower shall be regulated or restricted 

by the Commissioner as to methods of 

operation including requirements for 

maintenance of fire safety equipment. 

* * * * * 

■ 16. Revise § 232.620 to read as 

follows: 

§ 232.620 Determination of compliance 

with fire safety equipment requirements. 

Prior to Endorsement, applicant must 

provide certification that the installed 


wreier-aviles on DSK4TPTVN1PROD with PROPOSALS
1860 Federal Register / Vol. 80, No. 9 / Wednesday, January 14, 2015 / Proposed Rules 

improvements will meet HHS, as well as 

all other Federal, state and local 

requirements for fire safety equipment, 

if applicable. 

Dated: December 16, 2014. 

Biniam Gebre, 

Acting Assistant Secretary for Housing— 

Federal Housing Commissioner. 

[FR Doc. 2015–00373 Filed 1–13–15; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 880, 881, 883, 884, 886, 

and 891 

[Docket No. FR–5654–P–01] 

RIN 2502–AJ22 

Streamlining Management and 

Occupancy Reviews for Section 8 

Housing Assistance Programs and 

Amending Vacancy Payments for 

Section 8 and Section 162 Housing 

Assistance Programs 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend existing project-based Section 8 

regulations related to Management and 

Occupancy Reviews (MORs) and 

Vacancy Payments for the following 

programs: the Section 8 Housing 

Assistance Payments (HAP) Programs 

for New Construction, Substantial 

Rehabilitation, State Housing Agencies, 

New Construction financed under 

Section 515 of the Housing Act of 1949, 

the Loan Management Set-Aside 

Program, the HAP Program for the 

Disposition of HUD-Owned Projects, 

and the Section 202/8 Program. This 

rule would also amend the existing 

Section 162 regulations related to 

Vacancy Payments for the Section 202 

Projects. Under this rule, MORs would 

be conducted in accordance with a 

schedule published in the Federal 

Register and subject to public comment. 

The first such schedule is being 

published for comment concurrently 

with this proposed rule, and can be 

found elsewhere in today’s Federal 

Register. HUD is proposing this change 

in order to reduce the frequency of 

MORs, thereby minimizing 

interruptions in property operations 

created by onsite reviews, preserving 

staff time, and reducing costs. In 

addition, this proposed rule would 

reduce the vacancy payments made to 

the owner by HUD for a vacant assisted 

unit. 

DATES: Comment Due Date. March 16, 

2015. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this rule to the Regulations Division, 

Office of General Counsel, 451 7th 

Street SW., Room 10276, Department of 

Housing and Urban Development, 

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 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit comments, ensures timely 

receipt by HUD, and enables HUD to 

make them immediately available to the 

public. Comments submitted 

electronically through the 

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 rule. 

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. Eastern Time 

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 

through TTY by calling the Federal 

Relay Service at 800–877–8339. Copies 

of all comments submitted are available 

for inspection and downloading at 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: For 

information about management and 

occupancy reviews contact Lauryn 

Alleva, Program Administration Office, 

Office of Housing, Department of 

Housing and Urban Development, 451 

7th Street SW., Washington, DC 20410– 

7000; telephone number 202–708–3730 

(this is not a toll-free number). For 

information about vacancy claims, 

contact Yvette Viviani, Housing 

Assistance Policy Division, Office of 

Housing Assistance and Grant 

Administration, Office of Housing, 

Department of Housing and Urban 

Development, 451 7th Street SW., 

Washington, DC 20410–7000; telephone 

number 202–708–3000 (this is not a tollfree number). Hearing- and speechimpaired persons may access these 

numbers through TTY by calling the 

Federal Relay Service at 800–877–8339 

(this is a toll-free number). 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 8 of the United States 

Housing Act of 1937 (42 U.S.C. 1437f) 

authorizes one of HUD’s primary 

programs for providing rental housing 

assistance (Section 8). The purpose of 

Section 8 is to provide low-income 

families with decent, safe, and sanitary 

rental housing. The Section 8 program 

includes a project-based program and a 

tenant-based housing choice program. 

Under the project-based program, HUD 

may enter into an annual contributions 

contract (ACC) with a public housing 

agency (PHA) through which HUD 

commits to provide the agency with 

funds to make housing assistance 

payments to a project owner. The PHA 

or state agency, acting as a contract 

administrator, then enters into a 

Housing Assistance Payments (HAP) 

contract with the owner. Under the HAP 

contract, the contract administrator 

agrees to subsidize certain units for a 

specified period of time for eligible lowincome families. In certain 

circumstances HUD may act as the 

contract administrator, whereby HUD 

will directly enter into a HAP contract 

with an owner. 

There are seven project-based Section 

8 HAP programs administered by the 

Office of Multifamily Housing Programs: 

The HAP program for New Construction 

(24 CFR part 880) and the HAP program 

for Substantial Rehabilitation (24 CFR 

part 881), which provide rental 

assistance in connection with the 

development of newly constructed or 

substantially rehabilitated privately 

owned rental housing; the HAP Program 

for State Housing Agencies (24 CFR part 

883); the HAP program for New 


wreier-aviles on DSK4TPTVN1PROD with PROPOSALS