Source: https://www.federalregister.gov/documents/2015/08/11/2015-19714/federal-housing-administration-fha-updating-regulations-governing-hud-fees-and-the-financing-of-the
Timestamp: 2018-02-26 02:03:44
Document Index: 84636735

Matched Legal Cases: ['§\u2009200', '§\u2009200', '§\u2009200', 'art 232', '§\u2009232', '§\u2009232', '§\u2009200', 'art 232', '§\u2009232', '§\u2009232', 'art 232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', 'art 232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009232', '§\u2009200', '§\u2009232', '§\u2009232', '§\u2009232', 'art 50', 'arts 200', '§\u2009200', '§\u2009232', '§\u2009232', '§\u2009232']

A Rule by the Housing and Urban Development Department on 08/11/2015
I. Background—the January 14, 2015, Proposed Rule
Update HUD Fees
Update and Streamline 24 CFR 232, Subpart C, Regulations
https://www.federalregister.gov/d/2015-19714 https://www.federalregister.gov/d/2015-19714
This rule updates HUD fees for multifamily housing and residential healthcare facilities, and updates and Start Printed Page 48025streamlines the Section 232 program regulations that govern the financing of the purchase and installation of fire safety equipment in insured healthcare facilities, which have not been substantially updated in over 20 years. This final rule gives HUD flexibility in raising or lowering fees, and for residential healthcare facilities, streamlines 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.
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 these numbers through TTY by calling the toll-free Federal Relay Service at 800-877-8339 (this is a toll-free number).
On January 14, 2015, HUD published a proposed rule in the Federal Register, at 80 FR 1855, to update HUD fees for multifamily housing and residential healthcare facilities, and update and streamline the Section 232 program regulations that govern the financing of the purchase and installation of fire safety equipment in insured healthcare facilities. See the January 14, 2015, proposed rule for a more detailed listing of the proposed changes.
HUD's January 14, 2015, rule proposed to amend HUD's general fee regulations in 24 CFR 200.40, which contain the fees that apply to most mortgages insured by FHA, including Section 232 mortgages. To bring consistency and conformity to HUD's regulations, the amount of the application fee for Section 232 programs would be moved to a new § 200.40(d)(2), and only cross-referenced in the Section 232 program regulations. The current § 200.40(d), setting the general application fee, would be redesignated as § 200.40(d)(1). In addition, paragraphs (d)(1) and (d)(2) would allow the Secretary flexibility in setting the respective fees, up to a maximum fee of $5.00 per thousand dollars of the requested mortgage amount to be insured.
The rule proposed to eliminate the commitment fee in HUD's regulations at 24 CFR part 232, subpart C, and therefore also proposed to eliminate the requirement in § 232.515 that the commitment fee be refunded. The provisions allowing for refund of the application fee remained unchanged. In addition, instead of being set out in the Section 232 program regulations, the maximum fees and charges and the inspection fee in §§ 232.520 and 232.522, respectively, would cross-reference the §§ 200.40 and 200.41 regulations.
HUD's January 14, 2015, rule proposed to update and streamline the requirements of HUD's regulations at 24 CFR part 232, subpart C, and primarily focused on removing or revising several fees required in these regulations that HUD has determined are no longer needed or, alternatively, are not set at sufficient levels.
Health and Human Services (HHS) requirements and involvement. The rule proposed to streamline HUD's regulations by eliminating duplicative and unnecessary involvement by HHS. For example, the rule proposed to 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. HUD has determined that the estimate by the Secretary of HHS is an unnecessary step.
The rule proposed to remove the requirement at § 232.505(a) that an application for insurance of a fire safety loan under part 232 be considered in connection with a proposal approved by the Secretary of HHS. Section 232.615 would still require, however, that the facility requesting the loan meet HHS fire safety requirements.
In § 232.510(b), the rule proposed to replace the responsibility of the Secretary of HHS to determine the satisfactory completion of installation of fire safety equipment with that of the Commissioner.
In § 232.570, the rule proposed to eliminate the requirement that the Secretary of HHS submit a statement that the fire safety equipment has been satisfactorily installed. The rule proposed to 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.
The rule proposed to eliminate the requirement in § 232.620 that an application for insurance under 24 CFR part 232, subpart C, 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 rule proposed to substitute a reference to certification of compliance with HHS, Federal, State, and local requirements for fire safety equipment to be provided prior to endorsement.
Definitions. The rule proposed to update the outdated standard in § 232.500(c)(1) which required “fire safety equipment” to meet the standards for applicable occupancy of any edition of the Life Safety Code [1] (LSC) 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), the rule proposed instead to require that “fire safety equipment” meet the applicable provisions of the edition of the LSC adopted by the Secretary of HHS. For § 232.500(c)(1)(ii), HUD proposed no change. HUD proposed to remove § 232.500(c)(1)(iii), because approval by the Secretary of HHS is achieved through the change to § 232.500(c)(1)(i).
The rule also proposed to revise the definition of “eligible borrower” in § 232.615 to eliminate all references to the requirement that the facility meet Start Printed Page 48026HHS health and safety requirements, although the facility would still have to meet HHS fire safety requirements.
Applications. HUD proposed to remove the requirement in § 232.505(b) to submit applications to HUD's local offices.
Method of loan payment and amortization period. Instead of being set out in the 232 program regulations, the method of loan payment and amortization period in § 232.540 would cross-reference § 200.82.
Maximum loan amount. In § 232.565, the rule proposed to revise the maximum loan amount to allow for the financing of fees, similar to the regulations governing fees in other Section 232 loan insurance programs.
Contract requirements. The rule proposed to remove the limitation in § 232.605 that contracts be either lump sum or cost plus contracts and instead proposed to allow such contracts as may be specified by the FHA Commissioner.
Certification of cost requirements. In § 232.610, the rule proposed to require that 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 proposed to eliminate the requirement that the amount of the loan be adjusted to reflect the actual cost to the borrower of the improvements.
This final rule follows publication of the January 14, 2015, proposed rule and adopts that proposed rule without change. The public comment period for the proposed rule closed on March 16, 2015, and HUD received one public comment.
Comment: This rulemaking is the appropriate solution to an outdated and burdensome loan application process. Commenter is supportive of HUD's proposed rule to update outdated and burdensome requirements. Commenter states that updating the rules that govern the financing of the purchase and installation of fire safety equipment in insured healthcare facilities will save lives and streamlining the loan application process will reduce administrative burdens and costs.
HUD Response: HUD appreciates the commenter's support for this rule and adopts the proposed rule without change.
At the proposed rule stage, this document was determined not to be a “significant regulatory action” as defined in section 3(f) of the Executive order. Because this final rule adopts the January 14, 2015, proposed rule, without change, the final rule is also not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866.
The information collection requirements contained in this proposed rule have been submitted to the 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.
A Finding of No Significant Impact (FONSI) with respect to the environment for this rule was made at the proposed rule stage, 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)). The FONSI remains applicable, and is available for public inspection between 8 a.m. and 5 p.m., weekdays, in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-5000. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the FONSI 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 (this is a toll-free number).
The final rule imposes no requirements on small businesses. In fact, streamlining the Fire Safety Equipment Loan Program 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.
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either (i) imposes substantial direct compliance costs on State and local governments and is not required by statute or (ii) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.
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 Start Printed Page 48027is 14.134; for Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects is 14.155.
Accordingly, for the reasons discussed in this preamble, HUD amends 24 CFR parts 200 and 232 as follows:
2. Amend § 200.40 to:
(d)(1) Application fee—firm commitment: General. An application for firm commitment shall be accompanied by an application-commitment 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.
4. In § 232.500, revise paragraphs (c)(1)(i) and (ii) and (e) to read as follows:
5. Revise § 232.505 to read as follows:
6. Amend § 232.510 to:
a. Revise paragraphs (b), (c), and (d);
c. Redesignate paragraph (f) as paragraph (e) and revise newly designated paragraph (e) to read as follows:
1. The 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.
[FR Doc. 2015-19714 Filed 8-10-15; 8:45 am]