[Federal Register Volume 64, Number 62 (Thursday, April 1, 1999)]
[Notices]
[Pages 15778-15779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8030]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4170-N-19]
RIN 2577-AB74
Indian Housing Block Grant Program: Notice of Revision to
Transition Requirements--Proceeds of Sales of Former 1937 Act
Homeownership Units
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Notice of revised transition requirements--proceeds of sales of
former 1937 Act homeownership units.
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SUMMARY: This notice provides additional and updated guidance relating
to the sale of homeownership units and to cash management and
investment policies and procedures. The purpose of this guidance is to
facilitate the smooth transition from procedures and resources under
the United States Housing Act of 1937 (1937 Act) to those under the
Indian Housing Block Grant (IHBG) Program.
DATES: These transition requirements are effective upon publication.
FOR FURTHER INFORMATION CONTACT: Deborah M. Lalancette, National Office
of Native American Programs, Department of Housing and Urban
[[Page 15779]]
Development, 1999 Broadway, Suite 3390, Denver, CO; telephone (303)
675-1600 (this is not a toll-free number). Hearing or speech-impaired
individuals may access this number via TTY by calling the toll-free
Federal Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
The Native American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) was enacted on October 26,
1996, and took effect on October 1, 1997. NAHASDA requires HUD to make
grants on behalf of Indian tribes to carry out affordable housing
activities. A final rule to implement NAHASDA and establish the IHBG
Program was published on March 12, 1998, (63 FR 12334), with an
effective date of April 13, 1998.
NAHASDA also required the publication of a notice in the Federal
Register to establish any requirements necessary for the transition
from the provision of assistance for Indian tribes and Indian housing
authorities under the 1937 Act and other related provisions of law to
the provision of assistance in accordance with NAHASDA. An initial
transition notice was published on January 27, 1997 (62 FR 3972), with
revisions published on February 24, 1997 (62 FR 8258), January 27, 1998
(63 FR 4076), April 15, 1998 (63 FR 18804), and October 2, 1998 (63 FR
53084).
This revision to the transition notice requirements addresses the
treatment of proceeds from the sale of homeownership units. Question 42
in the transition notice revision published on January 27, 1998 treated
proceeds from the sale of homeownership units the same as rental and
homeownership operating reserves, mutual help equity accounts under the
Mutual Help Homeownership Opportunity Program, and earned home payment
accounts under the Turnkey III programs for purposes of section 210 of
NAHASDA. Section 210 states that any funds for programs for low-income
housing under the United States Housing Act of 1937 that, on the date
of the applicability of NAHASDA, are owned by, or in the possession or
under the control of, the IHA for the tribe, including all reserves not
otherwise obligated, shall be considered assistance under NAHASDA and
subject to the NAHASDA provisions relating to use of such assistance.
In response to inquiries, HUD has reconsidered Question 42 and
determined that section 210 of NAHASDA does not apply to the proceeds
from the sale of homeownership units. The purpose of the statutory
requirement for the transition notice is to facilitate the transition
from the 1937 Act programs to the IHBG program. Proceeds of sale of
homeownership units under the 1937 Act are not characterized as program
income under the IHBG regulation. By providing that the proceeds can be
used for any housing activity, community facility, or economic
development activity and are not subject to other Federal requirements,
HUD is seeking to expedite the smooth transition to the IHBG program.
Accordingly, Question 42 is amended by this notice to remove the
reference to homeownership unit sales proceeds, and Questions 42A and
42B are added to provide guidance on the treatment of these proceeds.
In addition to addressing homeownership unit sales proceeds, this
notice also revises Question 46 to extend and clarify the applicability
of PIH Notice 96-33 to cash management and investment policies and
procedures.
II. Revisions to the January 27, 1998 Transition Notice
Accordingly, FR Doc. 98-1939, the Indian Housing Block Grant
Program--Revised Notice of Transition Requirements, published in the
Federal Register January 27, 1998, 63 FR 4076, is amended as follows:
1. On page 4085, in column 3, Question 42 and Answer 42 are revised
to read as follows:
Question 42. What happens to rental and homeownership operating
reserves, mutual help equity accounts under the Mutual Help
Homeownership Opportunity Program, and earned home payment accounts
under the Turnkey III program?
Answer 42. Section 210 of NAHASDA states that any funds for
programs for low-income housing under the United States Housing Act of
1937 that, on the date of the applicability of the Act, are owned by,
or in the possession or under the control of, the IHA for the tribe,
including all reserves not otherwise obligated, shall be considered
assistance under the Act and subject to the provisions of this Act
relating to use of such assistance. In other words, the funds are
considered assistance under NAHASDA and are subject to NAHASDA
requirements. The funds in the accounts are also subject to existing
agreements with the homebuyers.
2. On page 4085, in column 3, a new Question 42A and Answer 42A are
added to read as follows:
Question 42A. Can proceeds from the sale of homeownership units be
used for purposes other than eligible NAHASDA activities?
Answer 42A. Yes. We have determined that section 210 of NAHASDA
addresses only the 1937 Act funds provided by HUD and not the proceeds
from the sale of homeownership units. Proceeds can be used for any
housing activity, community facility or economic development activity
that benefits the community. If the use of these funds is currently
outlined in an Administrative Use Agreement, the Agreement can be
terminated at the request of the Indian Housing Authority (or successor
entity). The funds can then be used for any housing activity, community
facility or economic development activity.
3. On page 4085, in column 3, a new Question 42B and Answer 42B are
added to read as follows:
Question 42B. What Federal requirements would apply to the proceeds
from the sale of homeownership units?
Answer 42B. The use of proceeds are not subject to any Federal
requirements, except that the funds must be used for the activities set
forth in Answer 42A.
4. On page 4086, in column 1, Answer 46 is revised to read as
follows (Question 46 is republished for the convenience of readers):
Question 46. What cash management and investment policies and
procedures are in effect as of October 1, 1997?
Answer 46. Current procedures outlined in PIH Notice 96-33 (HA)
dated June 4, 1996, extended by Notice 98-46 (HA) dated September 1,
1998, titled ``Required HA Cash Management and Investment Policies and
Procedures'' will continue to apply to 1937 Act funds which are held in
reserve accounts until further notice. Please note, however, that
sections 7(c) and 8 of Notice 98-46 do not apply to 1937 Act funds.
Also, the limit on maturity dates outlined in section 6 of Notice 96-33
does not apply.
Authority: 25 U.S.C. 4116(a).
Dated: March 26, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-8030 Filed 3-29-99; 2:09 pm]
BILLING CODE 4210-33-P