[Federal Register Volume 65, Number 2 (Tuesday, January 4, 2000)]
[Rules and Regulations]
[Pages 203-204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-37]
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FEDERAL HOUSING FINANCE BOARD
12 CFR Part 960
[No. 99-68]
RIN 3069-AA82
Amendment of Affordable Housing Program Regulation
AGENCY: Federal Housing Finance Board.
ACTION: Final rule.
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SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting
as final, with no changes, the May 5, 1999 Interim Final Rule which
amended its regulation governing the operation of the Affordable
Housing Program (AHP or Program) to make certain technical revisions
clarifying Program requirements and improving the operation of the AHP.
EFFECTIVE DATE: The final rule shall be effective on January 4, 2000.
FOR FURTHER INFORMATION CONTACT: Janet M. Fronckowiak, Acting Deputy
Director, Program Assistance Division, Office of Policy, Research and
Analysis, (202) 408-2575; or Sharon B. Like, Senior Attorney-Advisor,
Office of General Counsel, (202) 408-2930, Federal Housing Finance
Board, 1777 F Street, N.W., Washington, D.C. 20006.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Background
Section 10(j)(1) of the Federal Home Loan Bank Act (Bank Act)
requires each Federal Home Loan Bank (Bank) to establish a Program to
subsidize the interest rate on advances to members of the Federal Home
Loan Bank System engaged in lending for long-term, low-and moderate-
income, owner-occupied and affordable rental housing at subsidized
interest rates. See 12 U.S.C. 1430(j)(1) (1994). The Finance Board is
required to promulgate regulations governing the operation of the
Program. See id.
On August 4, 1997, the Finance Board published a final AHP
regulation adopting comprehensive revisions to the Program, see 12 CFR
part 960, which, among other changes, authorized the 12 Banks, rather
than the Finance Board, to approve applications for AHP subsidies
beginning January 1, 1998. See 62 FR 41812 (Aug. 4, 1997). On May 20,
1998, the Finance Board published an Interim Final Rule amending the
regulation to make certain technical revisions clarifying Program
requirements and improving the operation of the AHP. See 63 FR 27668
(May 20, 1998). The Interim Final Rule was adopted as a final rule,
with several changes, and became effective on June 1, 1999.
In the course of implementing the changes to the Program under the
recent revisions to the AHP regulation, the Banks and Finance Board
staff identified a number of additional technical issues whose
resolution would clarify Program requirements and improve the
effectiveness of the Program. Accordingly, on May 5, 1999, the Finance
Board published another Interim Final Rule amending the AHP regulation,
effective June 4, 1999, to address these additional issues. The May 5,
1999 Interim Final Rule provided for a 60-day comment period, which
closed on July 6, 1999.
The Finance Board received one comment letter on the May 5, 1999
Interim Final Rule from a financial institutions trade association,
which generally supported several provisions in the Interim Final Rule
and noted one potential concern which is discussed below.
II. Analysis of the Final Rule
Requirement for Independent Appraisals from State Certified or Licensed
Appraisers for Member Real Estate Owned (REO) Properties and Properties
Upon Which a Member Holds a Mortgage or Lien--Sec. 960.5(b)(2)(ii)(B)
The May 5, 1999 Interim Final Rule amended Sec. 960.5(b)(2)(ii)(B)
of the AHP regulation to require that an independent appraisal of the
AHP property be obtained within six months prior to the date the Bank
disburses AHP subsidy to the project. The Interim
[[Page 204]]
Final Rule also amended this section to require that the independent
appraisal be completed by a State certified or licensed appraiser, as
defined in 12 CFR 564.2(j) and (k), in order to ensure a more accurate
evaluation of the property value. The commenter generally supported
these amendments, but noted that for projects valued at less than
$250,000, the cost of such an appraisal may be burdensome in some
cases.
The Finance Board believes that the AHP regulatory appraisal
requirement generally would not impose an additional cost on AHP
projects. First, it is likely that most projects, regardless of the
value of the projects, would be required by at least one of their other
funding sources to obtain an appraisal completed by a State certified
or licensed appraiser. Second, the AHP regulation does not require that
the appraisal be in narrative form, which should keep the cost of the
appraisal down. Third, if an appraisal of the project by a State
certified or licensed appraiser was completed prior to the six-month
period preceding AHP funding, only an update or addendum to the
original appraisal need be obtained, which should further limit costs
to the project. Accordingly, no change has been made to the appraisal
requirement in the final rule.
III. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required for this final
rule, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.) do not apply. Moreover, the final rule applies only to the Banks,
which do not come within the meaning of ``small entities,'' as defined
in the Regulatory Flexibility Act. See id. Sec. 601(6).
IV. Paperwork Reduction Act
This final rule does not contain any collections of information
pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et
seq. Therefore, the Finance Board has not submitted any information to
the Office of Management and Budget for review.
Accordingly, under the authority of 12 U.S.C. 1430(j) (1994), the
Interim Final Rule amending 12 CFR part 960, published at 64 FR 24025
(May 5, 1999), is adopted as final without changes.
Dated: December 20, 1999.
By the Board of Directors of the Federal Housing Finance Board.
Bruce A. Morrison,
Chairman.
[FR Doc. 00-37 Filed 1-3-00; 8:45 am]
BILLING CODE 6725-01-P
