[Federal Register Volume 61, Number 85 (Wednesday, May 1, 1996)]
[Notices]
[Page 19466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10689]
[[Page 19465]]
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Part VI
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Department of Housing and Urban Development
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Utility Allowances for Use by the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation; Notice
Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 /
Notices
[[Page 19466]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4057-N-01]
Office of the Secretary; Utility Allowances for Use by the
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of utility allowances.
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SUMMARY: This notice issues the utility allowances established in
accordance with the Secretary's authority to regulate the Federal
National Mortgage Association (``Fannie Mae'') and the Federal Home
Loan Mortgage Corporation (``Freddie Mac'') (each enterprise is also
referred to as a ``Government-Sponsored Enterprise'' or ``GSE''). These
allowances are used to determine whether rental units financed by GSE
mortgage purchases are affordable and may count toward the achievement
of the income-based housing goals established by the Secretary. For
these purposes, the allowances in this notice shall be added to the
contract rent for rental units in which: (1) tenant income is not
available; (2) contract rent does not include the cost of utilities;
and (3) the GSE does not use the HUD Section 8 utility allowances.
EFFECTIVE DATE: April 23, 1996.
FOR FURTHER INFORMATION CONTACT: Janet Tasker, Director, Office of
Government-Sponsored Enterprises Oversight, Department of Housing and
Urban Development, Room 6154, 451 Seventh Street, S.W., Washington,
D.C. 20410, telephone (202) 708-2224 (this is not a toll-free number).
For hearing- and speech-impaired persons, this number may be accessed
via TTY (text telephone) by calling the Federal Information Relay
Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
Environmental Impact
In accordance with 40 CFR 1508.4 of the regulations of the Council
on Environmental Quality and 24 CFR 50.20(l) of the HUD regulations,
the policies and procedures contained in this notice relate only to
cost determinations that do not affect the physical condition of any
building and, therefore, are categorically excluded from the
requirements of the National Environmental Policy Act.
Background
The Federal Housing Enterprise Financial Safety and Soundness Act
of 1992, enacted as Title XIII of the Housing and Community Development
Act of 1992 (Pub. L. 102-550, approved October 28, 1992; codified
generally at 12 U.S.C. 4501-4561) (``the Act''),1 requires the
Secretary, inter alia, to establish and monitor the performance of the
GSEs in meeting annual goals for mortgage purchases on housing for low-
and moderate-income families and special affordable housing, i.e.,
housing meeting the needs of and affordable to low-income families in
low-income areas and very low-income families. On January 2, 1996, the
Secretary's new regulation of the GSEs, codified at 24 CFR part 81,
became effective. See 60 FR 61846 (Dec. 1, 1995).
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\1\ Unless otherwise specified, all sections cited herein are in
the Federal Housing Enterprises Financial Safety and Soundness Act
of 1992. Sections 1331-1336 of that Act are codified at 12 U.S.C.
4561-66.
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Under the Act and regulations, in considering whether a rental
dwelling unit that is financed by a GSE mortgage purchase is affordable
and counts toward any housing goal, the Secretary must consider the
income of tenants if income information is available. Where income
information is not available, rent on the dwelling unit is used as a
proxy and compared to the rent levels affordable to very-low-, low-,
and moderate-income families and families whose incomes do not exceed
50 percent of the area median income (``especially low-income
families'').2 To be considered affordable and count under the
goal, the rent cannot exceed 30 percent of the maximum income level of
the family's classification, i.e., especially low-, very-low-, low-, or
moderate-income, with adjustments for unit size.3
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\2\ Sections 1332(c) and 1333(c).
\3\ Sections 1332(c)(2) and 1333(c)(2).
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Under the regulation, ``rent'' is defined as contract rent, but
only where the contract rent includes the cost of all utilities.4
In all other instances, rent is contract rent plus either: the actual
cost of utilities, or a utility allowance.5 The regulation allows
the GSEs to choose from two different utility allowances--the
allowances used in the HUD Section 8 Program or the utility allowances
derived from the American Housing Survey (AHS) and issued annually by
the Secretary.6
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\4\ 24 CFR 81.2.
\5\ Id.
\6\ Id.
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This notice issues the AHS-derived utility allowances for 1996 and
1997. In establishing these allowances, the Department analyzed AHS
data on the median costs,7 based on unit type, paid by renters in
both multifamily and single family properties for electricity, gas,
oil, water, and other utilities.
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\7\ The AHS medians have been adjusted for the percentage change
in the Consumer Price Index for Fuel and Other Utilities between
July-December 1993 (the period when the AHS was conducted) and
November 1995, and have been projected forward using the Data
Resources Incorporated (DRI) predicted increase from November 1995
through the fourth quarter of 1996.
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The GSEs were advised by letter dated March 22, 1996, that these
allowances were to be issued in the Federal Register.
The Utility Allowances
In accordance with sections 1321, 1331-33, and 1336 of the Federal
Housing Enterprise Financial Safety and Soundness Act (12 U.S.C. 4541,
4561-63, and 4566), and as provided in paragraph (1) under the
definition of ``utility allowance'' in section 81.2(b) of Title 24 of
the Code of Federal Regulations, the AHS-derived utility allowances for
1996 and 1997 are as follows:
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Number of bedrooms
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Type of property 3 or
Efficiency 1 2 more
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Multifamily............................ $51 $59 $78 $102
Single family.......................... 67 78 104 134
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Effect of Notice Beyond 1997
For 1998 and thereafter, the Secretary shall establish AHS-derived
utility allowances by subsequent notice. Pending establishment of such
allowances for 1998 and thereafter, the allowances in this notice shall
continue to be used by the GSEs.
Dated: April 23, 1996.
Henry G. Cisneros,
Secretary.
[FR Doc. 96-10689 Filed 4-30-96; 8:45 am]
BILLING CODE 4210-32-P
