Notice2023-03089
Request for Information Regarding Rehabilitation Mortgages
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
February 14, 2023
Issuing agencies
Housing and Urban Development Department
Abstract
Through this Request for Information (RFI), the Federal Housing Administration (FHA) seeks public input regarding barriers to the use of the FHA 203(k) Rehabilitation Mortgage Insurance Program (203(k) Program) by lenders and consumers. Information provided in response to this RFI will allow FHA to identify barriers that limit the origination of 203(k) insured mortgages and lender participation in the program and consider opportunities to enhance the 203(k) Program to support HUD's goal of increasing the available supply of affordable housing in underserved communities.
Full Text
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<title>Federal Register, Volume 88 Issue 30 (Tuesday, February 14, 2023)</title>
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[Federal Register Volume 88, Number 30 (Tuesday, February 14, 2023)]
[Notices]
[Pages 9529-9530]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-03089]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6366-N-01]
Request for Information Regarding Rehabilitation Mortgages
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: Through this Request for Information (RFI), the Federal
Housing Administration (FHA) seeks public input regarding barriers to
the use of the FHA 203(k) Rehabilitation Mortgage Insurance Program
(203(k) Program) by lenders and consumers. Information provided in
response to this RFI will allow FHA to identify barriers that limit the
origination of 203(k) insured mortgages and lender participation in the
program and consider opportunities to enhance the 203(k) Program to
support HUD's goal of increasing the available supply of affordable
housing in underserved communities.
DATES: Comments are requested on or before April 17, 2023. Late-filed
comments will be considered to the extent practicable.
ADDRESSES: Interested persons are invited to submit comments responsive
to this RFI. Copies of all comments submitted are available for
inspection and downloading at <a href="http://www.regulations.gov">www.regulations.gov</a>.
To receive consideration as public comments, comments must be
submitted through one of the two methods specified below. All
submissions must refer to the above docket number and title. 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.
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>.
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.
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.
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). HUD welcomes and is prepared to receive calls from
individuals who are deaf or hard of hearing, as well as individuals
with speech or communication disabilities. To learn more about how to
make an accessible telephone call, please visit: <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>. Copies of all
comments submitted are available for inspection and downloading at
<a href="http://www.regulations.gov">http://www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Elissa Saunders, 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 202-402-2378 (this is not a toll-free number). HUD
welcomes and is prepared to receive calls from individuals who are deaf
or hard of hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit: <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>. SUPPLEMENTARY INFORMATION:
I. Background
The Department of Housing and Urban Development (HUD) is committed
to the advancement of its mission \1\ objectives to facilitate the
provision of safe, affordable, and equitable housing for American
households and communities.\2\ A component of HUD's 2022-2026 Strategic
Plan \3\ is the integration of ``the customer perspective into
everything the Department does to make its interactions feel easy,
effective, positive, and equitable.'' The plan also seeks to ``Increase
the Supply of Housing'' \4\ ensuring all households have access to
quality, affordable homes, and use any resources available to
strengthen the national housing supply and preserve
[[Page 9530]]
existing housing. Removing barriers to HUD programs and enhancing HUD
programs, such as the FHA 203(k) Program, can help support HUD's goal
of increasing the available supply of affordable housing in underserved
communities.
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\1\ HUD Mission at <a href="https://www.hud.gov/about/mission">https://www.hud.gov/about/mission</a>.
\2\ One of FHA's statutory operational goals for the Mutual
Mortgage Insurance Fund is to ``to meet the housing needs of the
borrowers that the single family mortgage insurance program . . . is
designed to serve.'' 12 U.S.C. 1708(a)(7).
\3\ FY2022-2026 HUD Strategic Plan 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>.
\4\ Id.
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The 203(k) Program is used to finance the rehabilitation of an
existing one-to-four unit structure \5\ that will be used primarily for
residential purposes. Mortgages insured through the 203(k) Program can
be used to rehabilitate an eligible structure and refinance outstanding
indebtedness on the structure and the real property on which it is
located; purchase and rehabilitate a structure and purchase the real
Property on which the structure is located; or rehabilitate the
interior space of an eligible Condominium Unit excluding areas that are
the responsibility of a Condominium Association.
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\5\ This type of structure refers to a building that has a roof
and walls, stands permanently in one place, and contains single or
multiple housing units that are used for human habitation.
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The 203(k) Program is an important tool for community and
neighborhood revitalization and the expansion of homeownership
opportunities for owner-occupant homebuyers.
There are two types of 203(k) Rehabilitation Mortgages: Standard
203(k) Mortgage and the Limited 203(k) Mortgage. The Standard 203(k)
Mortgage Insurance Program may be used for remodeling and major
repairs, has a minimum repair cost of $5,000, and requires the use of a
203(k) Consultant. The Limited 203(k) Mortgage Insurance Program is
used for minor remodeling and non-structural repairs, has a maximum
repair cost of $35,000, except for properties located in Qualified
Opportunity Zones \6\ (QOZs) where the maximum repair cost is $50,000,
and does not require the use of a 203(k) Consultant.
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\6\ QOZ only applies to the first 15,000 Mortgages per calendar
year from 2019 to 2028. See HUD Handbook 4000.1, Section
II.A.8.(a)(i)(A)(2).
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A 203(k) Mortgage may also be used in conjunction with any of FHA's
energy efficient programs including the Energy Efficient Mortgages
(EEM), Weatherization, and Solar and Wind Technologies programs to
finance the costs of energy efficient improvements to an existing
Property at the time of purchase or refinance, or to upgrade such
energy efficient improvements to exceed the established residential
building code for New Construction.
II. Purpose of This Request for Information
The purpose of this RFI is to solicit information regarding
barriers to the origination of mortgages under the FHA 203(k) Program
and to obtain feedback on ways FHA could improve its policies and
programs to expand the preservation, renovation, and expansion of
housing through its rehabilitation mortgage programs and policies.
III. Specific Information Requested
HUD welcomes all comments relevant to expanding the 203(k) Program.
HUD is particularly interested in receiving input from interested
parties on the questions below.
1. What information can you provide regarding ways in which the FHA
203(k) Program does or does not meet the needs of borrowers seeking to
renovate or rehabilitate their homes?
2. What policies or processes governing the 203(k) Program could be
streamlined, modified, or eliminated to enhance your experience with
the 203(k) Program?
3. How could FHA increase participation in the 203(k) Program?
4. The Standard 203(k) Program relies on a 203(k) Consultant to
determine if a property meets the requirements of the program. What
changes would you recommend to FHA's 203(k) Consultant requirements to
enhance the program while ensuring a subject property would, after
improvements, meet FHA's Minimum Property Requirements (MPR) or Minimum
Property Standards (MPS)?
5. What methods would you recommend HUD use to increase
stakeholders' awareness about FHA's 203(k) Program?
6. Supporting local authorities' efforts to preserve and expand
single-family housing is an important goal of HUD's strategic plan.
Please describe how HUD could better support local authorities' efforts
to increase the stock of available and affordable single family housing
using the 203(k) Program, especially in underserved communities. What
role could the program play in improving the supply of available
housing in underserved communities?
7. How can the 203(k) Program or other energy efficiency programs
(Weatherization, Solar and Wind Technologies, and FHA's EEM) better
align with existing federal, state, or local energy efficiency
programs?
8. What state or local regulations impact the use of FHA's 203(k)
Program?
9. The 203(k) Program parameters limit the types of eligible
properties and improvements. Please describe any rehabilitation needs
not served or underserved due to the existing program requirements and
how could the 203(k) Program be enhanced to address those needs.
10. The 203(k) Program is currently underutilized by nonprofits and
governmental entities. What type of changes would encourage more
nonprofits and governmental entities to increase their participation in
the program?
11. What are the benefits or drawbacks to re-opening the 203(k)
Program to other parties that acquire and rehabilitate distressed
single-family properties in underserved communities?
12. What technology solutions could improve the availability of, or
facilitate, the 203(k) Program?
13. Currently, HUD-approved housing counseling agencies provide
advice about FHA-insured loans to potential and current homeowners.
Should housing counseling agencies play a more significant role in
educating consumers about the FHA 203(k) program?
14. What are the advantages and disadvantages of the 203(k) Program
compared to other sources of rehabilitation financing? Are there
changes to the program you recommend in light of these?
15. Are there any requirements of the 203(k) program that might
restrict utilization by any underserved groups of borrowers and what
changes could HUD make to the program to encourage more utilization by
these groups?
Julia R. Gordon,
Assistant Secretary for Housing--FHA Commissioner.
[FR Doc. 2023-03089 Filed 2-13-23; 8:45 am]
BILLING CODE 4210-67-P
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</html>Indexed from Federal Register on February 14, 2023.
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