Notice2022-21047
Request for Information Regarding Small Mortgage Lending
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 4, 2022
Issuing agencies
Housing and Urban Development Department
Abstract
In its 2022-2026 Strategic Plan, the Department established strategic goals to "Support Underserved Communities" and to "Promote Homeownership." Among the goal of supporting underserved communities is to advance housing justice and proactively strengthen and protect vulnerable and underserved communities. Through this Request for Information (RFI), the Federal Housing Administration (FHA) seeks public input regarding barriers to the origination of small mortgages in the FHA program. Information provided in response to this RFI will allow FHA to identify barriers to the origination of small mortgages in the FHA program and consider the development of policies and programs that better support and expand affordable homeownership opportunities in underserved markets with lower housing prices.
Full Text
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<title>Federal Register, Volume 87 Issue 191 (Tuesday, October 4, 2022)</title>
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[Federal Register Volume 87, Number 191 (Tuesday, October 4, 2022)]
[Notices]
[Pages 60186-60187]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-21047]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6342-N-01]
Request for Information Regarding Small Mortgage Lending
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development, HUD.
ACTION: Request for information.
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SUMMARY: In its 2022-2026 Strategic Plan, the Department established
strategic goals to ``Support Underserved Communities'' and to ``Promote
Homeownership.'' Among the goal of supporting underserved communities
is to advance housing justice and proactively strengthen and protect
vulnerable and underserved communities. Through this Request for
Information (RFI), the Federal Housing Administration (FHA) seeks
public input regarding barriers to the origination of small mortgages
in the FHA program. Information provided in response to this RFI will
allow FHA to identify barriers to the origination of small mortgages in
the FHA program and consider the development of policies and programs
that better support and expand affordable homeownership opportunities
in underserved markets with lower housing prices.
DATES: Comments are requested on or before December 5, 2022. Late-filed
comments will be considered to the extent practicable.
ADDRESSES: Interested persons are invited to submit comments responsive
to this RFI. All submissions must refer to the docket number and title
of the RFI. Commenters are encouraged to identify the number of the
specific question or questions to which they are responding. Responses
should include the name(s) of the person(s) or organization(s) filing
the comment; however, because any responses received by HUD will be
publicly available, responses should not include any personally
identifiable information or confidential commercial information.
There are two methods for submitting public comments.
1. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
<a href="http://www.regulations.gov">http://www.regulations.gov</a>.
2. 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.
HUD strongly encourages commenters to submit their feedback and
recommendations electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a response,
ensures timely receipt by HUD, and enables HUD to make comments
immediately available to the public. Comments submitted electronically
through the <a href="http://www.regulations.gov">http://www.regulations.gov</a> website 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.
Public Inspection of Public Comments. All comments and
communications properly 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 can dial 7-1-1 to access the
Telecommunications Relay Service (TRS), which permits users to make
text-based calls, including Text Telephone (TTY) and Speech to Speech
(STS) calls. Copies of all comments submitted are available for
inspection and downloading at <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
[[Page 60187]]
FOR FURTHER INFORMATION CONTACT: Kevin Stevens, Acting Director, Office
of Single Family Program Development, Department of Housing and Urban
Development, 451 7th Street SW, Room 9266, Washington, DC 20410-0500;
telephone number 202-402-4317 (this is not a toll-free number).
Individuals can dial 7-1-1 to access the Telecommunications Relay
Service (TRS), which permits users to make text-based calls, including
Text Telephone (TTY) and Speech to Speech (STS) calls.
SUPPLEMENTARY INFORMATION:
I. Background
HUD's 2022-2026 Strategic Plan,\1\ released in March 2022,
established strategic goals to ``Support Underserved Communities'' and
to ``Promote Homeownership.'' Among the objectives of supporting
underserved communities is to ``Advance Housing Justice,'' which
includes expanding the Department's role in proactively strengthening
and protecting vulnerable and underserved communities. Borrowers often
experience difficulty finding affordable options to finance the
purchase or refinance of properties below certain price thresholds,
especially in areas where home values are low. FHA's mission is to
provide mortgage financing options for low- to moderate-income
borrowers who are not well served by the private mortgage market,
including those seeking small mortgage. HUD understands that a primary
barrier to small mortgage lending is the costs to originate and service
small mortgages in relation to the limited potential compensation
afforded by these loans. Therefore, lenders do not find it economically
feasible to originate mortgages with low principal balances. This lack
of financing availability for mortgages with low principal balances
creates a significant barrier to affordable homeownership for
underserved households, particularly in certain geographic areas.
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\1\ U.S. Dept of Housing and Urban Development, Fiscal Year
2022-2026 Strategic Plan (2022), available at <a href="https://www.hud.gov/sites/dfiles/CFO/documents/FY2022-2026HUDStrategicPlan.pdf">https://www.hud.gov/sites/dfiles/CFO/documents/FY2022-2026HUDStrategicPlan.pdf</a>.
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Under Title II of the National Housing Act (NHA),\2\ FHA insures
loans made by FHA-approved mortgagees for the purchase or refinance of
1-4 family residences, including individual condominium units and
manufactured homes classified as real estate. FHA insures mortgages to
increase the availability of affordable home financing options for low-
and moderate-income borrowers by protecting mortgagees and lenders
against the risk of default.
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\2\ 12 U.S.C. 1707 et seq.
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The Title II program provides limits on the maximum loan amounts
but does not contain limitations on a minimum loan amount.
Additionally, FHA's regulation at 24 CFR 203.18d prohibits lenders from
establishing a minimum principal loan amount under FHA's Title II
program.
The House of Representatives Committee Report, 116-452,
accompanying the U.S. Departments of Transportation, Housing and Urban
Development, and Related Agencies Appropriations Bill, 2021 \3\
directed HUD to submit a review of its FHA single-family mortgage
insurance policies, practices, and products to identify any barriers or
impediments to supporting, facilitating, and making available mortgage
insurance for mortgages having an original principal obligation of
$70,000 or less. In response, HUD is issuing a report concurrently with
this RFI that outlines FHA's role in the small mortgage lending market
and identifies certain potential impediments to small mortgage lending.
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\3\ Available at <a href="https://www.congress.gov/congressional-report/116th-congress/house-report/452">https://www.congress.gov/congressional-report/116th-congress/house-report/452</a>.
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II. Purpose of this Request for Information
The purpose of this RFI is to solicit information regarding
barriers to originating small mortgage lending in the FHA program and
obtain feedback on ways to improve FHA policies and programs that
support affordable homeownership opportunities in underserved markets
with lower housing prices.
III. Specific Information Requested
While FHA welcomes all comments relevant to expanding small
mortgage lending in the FHA mortgage insurance program, FHA is
particularly interested in receiving input from interested parties on
the questions outlined below.
1. Communities have reported a lack of available financing for
small balance mortgage loans in some areas. Have you observed this to
be true and is there a particular mortgage loan amount below which the
problem is most acute?
2. What housing supply market conditions and purchasing
characteristics affect the availability of and demand for small
mortgages?
3. What information can you provide regarding the ways in which the
FHA program serves or does not serve borrowers seeking small mortgages?
4. What barriers (e.g., origination and servicing costs,
compensation, disincentives) exist for mortgage lenders and other
industry participants in facilitating transactions that include the
origination or servicing of small mortgages in the FHA program?
5. What technology solutions could improve the availability of
small mortgages in the FHA program?
6. What changes to policies, regulations, features, or processes of
the current FHA program would encourage mortgagees to do more lending
for small mortgages in the FHA program?
7. What policies, regulations, features, or processes outside of
FHA/HUD impact the availability of small mortgages in the FHA program?
8. What, if any, state and local requirements affect the
availability of small mortgages in the FHA program?
9. What consumer protections are unique to small mortgages that
should be considered in the FHA program?
10. What issues should be considered relating to provision of
liquidity for small mortgage lending through securitization?
11. Offer any additional comments on the role that FHA programs
could play in improving the supply of small mortgages.
Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2022-21047 Filed 10-3-22; 8:45 am]
BILLING CODE 4210-67-P
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