[Federal Register Volume 61, Number 174 (Friday, September 6, 1996)]
[Rules and Regulations]
[Pages 47404-47408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23081]
[[Page 47403]]
_______________________________________________________________________
Part VIII
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 573
Loan Guarantee Recovery Fund; Final Rule
Federal Register / Vol. 61, No. 174 / Friday, September 6, 1996 /
Rules and Regulations
[[Page 47404]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 573
[Docket No. FR-4108-F-01]
RIN 2506-AB87
Office of the Assistant Secretary for Community Planning and
Development; Loan Guarantee Recovery Fund
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
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SUMMARY: The Church Arson Prevention Act of 1996 (the Act) authorizes
certain Federal departments to implement procedures to address the
destructive consequences of acts of arson and terrorism carried out
against places of worship. Section 4 of the Act directs HUD to publish
regulations governing the provision of loan guarantees to financial
institutions that make loans to certain nonprofit organizations
adversely affected by such acts. This final rule implements section 4
of the Act. Specifically, this rule establishes the procedures, terms,
and conditions by which HUD will guarantee loans to assist nonprofit
organizations in financing activities designed to rebuild and
rehabilitate structures, to replace and restore personal property, and
to finance other eligible activities as provided for in this final
rule. In addition, HUD anticipates forming a cooperative venture and
participating with other entities in the pooling of funds so as to
better achieve the objectives of the Act and this final rule.
EFFECTIVE DATE: These regulations take effect on October 7, 1996,
unless prior to this date HUD publishes a notice in the Federal
Register announcing an earlier effective date. Affected parties do not
have to comply with the information collection requirements in
Secs. 573.6, 573.7, 573.8, and 573.11 until HUD publishes in the
Federal Register the control numbers assigned by the Office of
Management and Budget (OMB) to these information collection
requirements. Publication of the control numbers notifies the public
that OMB has approved these information requirements under the
Paperwork Reduction Act of 1995.
FOR FURTHER INFORMATION CONTACT: Tony Johnston, Deputy Director,
Financial Management Division, Office of Block Grant Assistance, Room
7180, Department of Housing and Urban Development, 451 Seventh Street,
SW., Washington, DC 20410, telephone number (202) 708-1871. Hearing- or
speech-impaired individuals may access this number via TTY by calling
the Federal Information Relay Service at 1-800-877-8399. FAX inquiries
may be sent to Mr. Johnston at (202) 708-1798. (Other than the ``800''
number, the telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Background
On July 3, 1996, President Clinton signed into law the ``Church
Arson Prevention Act of 1996'' (Pub. L. 104-155) (the Act). In passing
this legislation, the Congress made the following findings:
The Congress finds the following:
(1) The incidence of arson or other destruction of vandalism of
places of religious worship, and the incidence of violent
interference with an individual's lawful exercise or attempted
exercise of the right of religious freedom at a place of religious
worship pose a serious national problem.
(2) The incidence of arson of places of religious worship has
recently increased, especially in the context of places of religious
worship that serve predominantly African-American congregations.
(3) Changes in Federal law are necessary to deal properly with
this problem.
(4) Although local jurisdictions have attempted to respond to
the challenges posed by such acts of destruction or damage to
religious property, the problem is sufficiently serious, widespread,
and interstate in scope to warrant Federal intervention to assist
State and local jurisdictions.
(5) Congress has authority, pursuant to the Commerce Clause of
the Constitution, to make acts of destruction or damage to religious
property a violation of Federal law.
(6) Congress has authority, pursuant to section 2 of the 13th
amendment to the Constitution, to make actions of private citizens
motivated by race, color, or ethnicity that interfere with the
ability of citizens to hold or use religious property without fear
of attack, violations of Federal criminal law.
The Act provides Federal, State and local law-enforcement agencies
with the needed additional tools to address violent crimes against
places of worship, strengthens the penalties for these crimes, and
authorizes Federal assistance for rebuilding efforts. Section 4 of the
Act, entitled ``Loan Guarantee Recovery Fund,'' authorizes the
Secretary of HUD to guarantee loans made by financial institutions to
assist certain nonprofit organizations (organizations described in
section 501(c)(3) of the Internal Revenue Code of 1986) that have been
damaged as a result of acts of arson or terrorism. The Act provides
that loans shall be guaranteed in accordance with procedures that the
Secretary shall establish by regulation.
This final rule implements section 4 of the Act by establishing a
new 24 CFR part 573. Part 573 describes the procedures, terms, and
conditions by which HUD will guarantee loans to assist eligible
nonprofit organizations. Under Sec. 573.3 of this final rule, eligible
borrowers may use guaranteed loan funds for a wide range of activities,
including: (1) the acquisition of real or personal property; (2) the
rehabilitation of real property; (3) the construction, reconstruction
or replacement of real property improvement; (4) clearance, demolition,
and removal of structures, fixtures, and improvements; (5) site
preparation; (6) architectural, engineering, and security expenses; and
(7) refinancing existing indebtedness. The term of a loan guaranteed by
HUD under new 24 CFR part 573 may not exceed 20 years.
II. Justification for Final Rulemaking
HUD generally publishes a rule for public comment before issuing a
rule for effect, in accordance with its own regulations on rulemaking
in 24 CFR part 10. Part 10 provides for exceptions to the general rule
if the agency finds good cause to omit advance notice and public
participation. The good cause requirement is satisfied when prior
public procedure is ``impracticable, unnecessary, or contrary to the
public interest'' (24 CFR 10.1). HUD finds that good cause exists to
publish this rule for effect without first soliciting public comment.
The purpose of this rule is to implement the authority provided by
the Congress for HUD to guarantee loans made by financial institutions
to certain nonprofit organizations that suffer damage to their property
as a result of acts of arson or terrorism. The Department of Justice
has identified more than 40 eligible organizations that have had
property damaged or destroyed through acts of arson or terrorism within
the last few months. These organizations are in immediate need of
assistance to rebuild and restore their properties. Financial
institutions are willing to assist these organizations in their
rebuilding efforts, provided a certain level of assurance exists with
respect to the repayment of the loans to be made. The loan guarantee
recovery fund established by this final rule provides the necessary
assurance. Accordingly, HUD believes that it would be contrary to the
public interest to delay the effectiveness of the rule to solicit
comment.
Before issuance of this rule, HUD held meetings with
representatives of 501(c)(3) organizations that have been damaged by
arson or terrorism, as well
[[Page 47405]]
as with financial institutions, State and local organizations, and
other public agencies. This rule incorporates many of the comments and
suggestions offered by these organizations and entities. Although this
rule is being issued in final form, additional public comments on this
regulation are welcome on a continuing basis. These additional comments
will be beneficial to any future loan guarantee authority provided to
HUD. Interested persons are invited to submit comments regarding the
final rule to the Office of the General Counsel, Rules Docket Clerk,
Room 10276, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410-0500. Communications should refer to
the above docket number and title. Facsimile (FAX) comments are not
acceptable. A copy of each communication submitted will be available
for public inspection and copying during regular business hours (7:30
a.m. to 5:30 p.m. Eastern Time) at the above address.
III. Findings and Certifications.
Paperwork Reduction Act Statement. The information collection
requirements contained in Secs. 573.6, 573.7, 573.8, and 573.11 have
been submitted to the Office of Management and Budget (OMB) for
emergency review and approval under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520). An agency may not conduct or sponsor, and a
person is not required to respond to, a collection of information
unless the collection displays a valid control number. The OMB control
number, when assigned, will be announced by separate notice in the
Federal Register.
Executive Order 12866, Regulatory Planning and Review. This final
rule was reviewed by the Office of Management and Budget (OMB) under
Executive Order 12866, Regulatory Planning and Review. OMB determined
that this rule is a ``significant regulatory action,'' as defined in
section 3(f) of the Order (although not economically significant under
section (3)(f)(1) of the Order). Any changes made to the final rule
subsequent to its submission to OMB are clearly identified in the
docket file, which is available for public inspection in the office of
the Department's Rules Docket Clerk, Room 10276, 451 Seventh Street SW,
Washington Dc, 20410.
Unfunded Mandates Reform Act. The Secretary has reviewed this rule
before publication and by approving it certified, in accordance with
the Unfunded Mandates Reform Act of 199 (2 U.S.C. 1532), that this rule
does not impose a Federal mandate that will result in the expenditure
by State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any one year.
Regulatory Flexibility Act. The Secretary, in accordance with the
Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed and approved
this final rule, and in so doing certifies that this final rule will
not have a significant economic impact on a substantial number of small
entities. The purpose of this rule is to assist certain nonprofit
organizations that experience damage to their real and personal
property as a result of acts of arson or terrorism. All qualified
financial institution, are eligible to apply for loan guarantees under
this rule.
Environmental Impact. A Finding of No Significant Impact with
respect to the environment was made in accordance with HUD's
regulations at 24 CFR part 50, which implement section 102(2)(C) of the
National Environmental Policy Act of 1969. The Finding of No
Significant Impact is available for public inspection between 7:30 a.m.
and 5:30 p.m. weekdays in the Office of General Counsel, the Rules
Docket Clerk, Room 10276, 451 Seventh Street, SW, Washington, DC 20410.
Executive Order 12612, Federalism. The General Counsel, as the
Designated Official under section 6(a) of Executive Order 12612,
Federalism, has determined that this rule will not have substantial
direct effects on States or their political subdivisions, or the
relationship between the Federal Government and the States, or on the
distribution of power and responsibilities among the various levels of
Government. No programmatic or policy changes will result from this
document's promulgation that would affect the relationship between the
Federal Government and State and local governments.
Executive Order 12606, The Family. The General Counsel, as the
Designated Official under section 6(a) of Executive Order 12606, The
Family, has determined that this rule will not have potential for
significant impact on family formation, maintenance, or general well-
being, and thus is not subject to review under the Order. No
significant change in existing HUD policies or programs, as those
policies relate to the family, will result from promulgation of this
final rule.
List of Subjects in 24 CFR Part 573
Loan programs--housing and community development, Nonprofit
organizations, Reporting and recordkeeping requirements.
Accordingly, title 24 of the Code of Federal Regulations is amended
as follows:
1. A new part 573 is added to read as follows:
PART 573--LOAN GUARANTEE RECOVERY FUND
Sec.
573.1 Authority and purpose.
573.2 Definitions.
573.3 Eligible activities.
573.4 Loan term.
573.5 Underwriting standards and availability of loan guarantee
assistance.
573.6 Submission requirements.
573.7 Loan guarantee agreement.
573.8 Environmental procedures and standards.
573.9 Other requirements.
573.10 Fees for guaranteed loans.
573.11 Record access and recordkeeping.
Authority: Pub. L. 104-155, 110 Stat. 1392, 18 U.S.C. 241 note;
42 U.S.C. 3535(d).
Sec. 573.1 Authority and purpose.
Section 4 of the Church Arson Prevention Act of 1996 (Pub. L. 104-
155, approved July 3, 1996) authorizes HUD to guarantee loans made by
financial institutions to certain nonprofit organizations to finance
activities designed to remedy the damage and destruction to real and
personal property caused by acts of arson or terrorism. This part
establishes the general procedures and requirements that apply to HUD's
guarantee of these loans.
Sec. 573.2 Definitions.
The following definitions are only applicable to loan guarantees
under this part, and are not criminal definitions.
Act means ``The Church Arson Prevention Act of 1996'' (Pub. L. 104-
155, approved July 3, 1996).
Arson means a fire or explosion causing damage to (or destruction
of) real or personal property that a Qualified Certification Official
determines, or reasonably believes, to be deliberately set.
Borrower means an organization described in section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, whose property has been
damaged or destroyed as a result of an act of arson or terrorism and
that incurs a debt obligation to a financial institution for the
purpose of carrying out activities eligible under his part.
Financial Institution means a lender which may be a bank, trust
company, savings and loan association, credit union, mortgage company,
or other issuer regulated by the Federal Deposit Insurance Corporation,
the Office of Thrift Supervision, the Credit Union Administration, or
the U.S. Comptroller
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of the Currency. A Financial Institution may also be a Pension Fund.
Guarantee means an obligation of the United States Government
guaranteeing payment of the outstanding principal loan amount, in whole
or in part, plus interest thereon, on a debt obligation of the Borrower
to a Financial Institution upon failure of the Borrower to repay the
debt.
Guaranteed Loan Funds means funds received by the borrower from the
Financial Institution to finance eligible activities under this part,
the repayment of which is guaranteed by HUD.
Loan Guarantee Agreement means an agreement between a Financial
Institution and the Secretary detailing the rights, responsibilities,
procedures, terms, and conditions under which a loan provided by a
Financial Institution to a Borrower may be guaranteed under section 4
of the Act.
Qualified Certification Official (QCO). (1) For the purpose of
certifying an act of arson. A State or local official authorized to
investigate possible acts of arson. For the purposes of this
definition, such an official is authorized to execute an Official
Incident Report or its equivalent and may be an official or employee of
such agencies as the local fire department, the local police
department, or the State Fire Marshall Office or its equivalent. The
term ``Qualified Certification Official'' also includes HUD, which will
consult with the Bureau of Alcohol, Tobacco, and Firearms of the
Department of the Treasury in making its determinations.
(2) For the purpose of certifying an act of terrorism. The
Secretary or his designee, in consultation with the Federal Bureau of
Investigation, shall determine whether an act of violence is a
terrorist act or is reasonably believed to be a terrorist act.
Section 4 Guaranteed Loan means a HUD guaranteed loan made by a
Financial Institution to a Borrower for the purpose of carrying out
eligible activities to address damage or destruction caused by acts of
arson or terrorism.
Terrorism means an act of violence causing damage to (or
destruction of) real or personal property that the Secretary or his
designee, in consultation with the Federal Bureau of Investigation,
determines to be, or reasonably believes to be, a terrorist act, as
defined by applicable Federal law or guidelines.
Sec. 573.3 Eligible activities.
Guaranteed Loan Funds may be used by a Borrower for the following
activities when it is certified in accordance with Sec. 573.6(e) that
the activity is necessary to address damage caused by an act or acts of
arson or terrorism as certified in accordance with Sec. 573.6(f):
(a) Acquisition of improved or unimproved real property in fee or
under long term lease.
(b) Acquisition and installation of personal property.
(c) Rehabilitation of real property owner, acquired, or leased by
the Borrower.
(d) Construction, reconstruction, or replacement of real property
improvement.
(e) Clearance, demolition, and removal, including movement of
structures to other sites, of buildings, fixtures and improvements on
real property.
(f) Site preparation, including construction, reconstruction, or
installation of site improvements, utilities, or facilities, which is
related to the activities described in paragraphs (a), (c), or (d) of
this section.
(g) Architectural, engineering, and similar services necessary to
develop plans in connection with activities financed under paragraphs
(a), (b), (c), or (d) of this section.
(h) Acquisition, installation and restoration of security systems.
(i) Loans for refinancing existing indebtedness secured by a
property to be constructed, rehabilitated, or reconstructed, if such
financing is determined to be appropriate to achieve the objectives of
the Act and this part.
(j) Other necessary project costs such as insurance, bonding, legal
fees, appraisals, surveys, relocation, closing costs, etc., paid or
incurred by the Borrower in connection with the completion of the above
activities.
Sec. 573.4 Loan term.
The term of the loan to be guaranteed by HUD under this part may
not exceed 20 years.
Sec. 573.5 Underwriting standards and availability of loan guarantee
assistance.
(a) HUD may, in its discretion, accept the underwriting standards
of the Financial Institution making a loan to a Borrower.
(b) HUD will not make the loan guarantee unless it determines that
the guaranteed loan is an acceptable financial risk under HUD's
generally applicable loan underwriting standards based on the
following:
(1) The Borrower's ability to pay debt service; and
(2) The value of the collateral assigned or pledged as security for
the repayment of the loan.
(c) The provision of a loan guarantee to a Financial Institution
and the amount of the guarantee do not depend in any way on the
purpose, function, or identity of the organization to which the
Financial Institution has made, or intends to make, a Section 4
Guaranteed Loan.
(d) HUD may disapprove a request for loan guarantee assistance
based on the availability of funding.
(e) HUD may decline any Financial Institution's participation if
its underwriting criteria are insufficient to make the guarantee an
acceptable financial risk, or if the proposed interest rates or fees
are unacceptable. HUD expects the proposed interest rates to take into
account the value of the Federal guarantee.
(f) HUD may limit the availability of Guaranteed Loan Funds to
geographic areas having the greatest need, as determined by a needs
analysis of the most current available date conducted by HUD.
(g) Other requirements associated with the underwriting standards
and guidelines shall be contained in the Loan Guarantee Agreement.
Sec. 573.6 Submission requirements.
A Financial Institution seeking a Section 4 Guaranteed Loan must
submit to HUD the following documentation:
(a) A statement that the institution is a Financial Institution as
defined at Sec. 573.2.
(b) A statement that the Borrower is eligible as defined at
Sec. 573.2.
(c) A description of each eligible activity for which the loan is
requested.
(d) A statement of other available funds to be used to finance the
eligible activities (e.g., insurance proceeds).
(e) A certification by the Borrower that the activities to be
assisted resulted from an act of arson or terrorism which is the
subject of the certification described in paragraph (f) of this
section.
(f) A certification by a QCO that the damage or destruction to be
remedied by the use of the Guaranteed Loan Funds resulted from an act
of arson or terrorism.
(g) The environmental documentation required by Sec. 573.8.
(h) A narrative of the institution's underwriting standards used in
reviewing the Borrower's loan request.
(i) The interest rate on the loan and fees the lender intends to
use in connection with the loan; and
(j) The percentage of the loan for which a guarantee is requested.
Sec. 573.7 Loan guarantee agreement.
(a) The rights and responsibilities with respect to the guaranteed
loan shall be substantially described in an
[[Page 47407]]
agreement entered into between the Financial Institution, as the
lender, and the Secretary, as the guarantor, which agreement shall
provide that:
(1) The lender has submitted or will submit a request for loan
guarantee assistance that is accompanied by the Borrower's request for
a loan to carry out eligible activities described in Sec. 573.3;
(2) The lender will require the Borrower to execute a promissory
note promising to repay the guaranteed loan in accordance with the
terms thereof;
(3) The lender will require the Borrower to provide collateral
security, to an extent and in a form, acceptable to HUD;
(4) HUD reserves the right to limit loan guarantees to loans
financing the replacement of damaged property with comparable new
property;
(5) The lender will follow certain claim procedures to be specified
by HUD in connection with any defaults, including appropriate
notification of default as required by HUD;
(6) The lender will follow procedures for payment under the
guarantee whereby the lender will be paid (up to the amount of
guarantee) the amount owed to the lender less any amount recovered from
the underlying collateral security for the loan; and
(7) The lender will act as the fiscal agent for the loan, servicing
the guaranteed loan, maintaining loan documents, and receiving the
Borrower's payments of principal and interest. The Borrower and the
lender may be required to execute a fiscal agency agreement.
(b) In addition, the agreement shall contain other requirements,
terms, and conditions required or approved by HUD.
Sec. 573.8 Environmental procedures and standards.
The environmental review requirements at 24 CFR part 50 are
applicable to this part.
(a) Environmental procedures. Before any lender's submission
requesting a loan guarantee for the acquisition, rehabilitation, or
construction of real property can be selected for a loan guarantee, HUD
shall determine whether any environmental thresholds are exceeded in
accordance with 24 CFR part 50, which implements the National
Environmental Policy Act (NEPA) and the related Federal environmental
laws and authorities listed under 24 CFR 50.4. To assist in complying
with environmental requirements, Borrowers are encouraged to select
sites that are free of environmental hazards and are to provide HUD
with environmental data needed to make a determination of compliance.
For successful Borrowers, the costs for preparing the environmental
data are eligible as project costs.
(1) If HUD determines that one or more of the thresholds are
exceeded, HUD shall conduct a compliance review of the issue and, if
appropriate, establish mitigating measures that the applicant shall
carry out for the property.
(2) The lender's submissions under Sec. 573.6 shall provide HUD
with:
(i) Documentation for environmental threshold review; and
(ii) Any previously issued environmental reviews prepared by local,
State, or other Federal agencies for the proposed property.
(3) In providing the above information, the Borrower is encouraged
to contact the local community development agency to obtain any
previously issued environmental reviews for the proposed property as
well as for other relevant information that can be used in the
applicant documentation for the environmental threshold review.
(4) HUD reserves the right to disqualify any request where one or
more environmental thresholds are exceeded if HUD determines that the
compliance review cannot be satisfactorily completed.
(5) If Guaranteed Loan Funds are requested for acquisition,
rehabilitation, or construction, Borrowers and Financial Institutions
are prohibited from committing or expending State, local, or other
funds to undertake property acquisition, rehabilitation or construction
under this part until HUD issues a letter of commitment notifying the
lender of HUD approval of the loan guarantee.
(b) Environmental thresholds. HUD shall determine whether a NEPA
environmental assessment is required. Also, HUD shall determine whether
the proposed property triggers thresholds for the applicable Federal
environmental laws and authorities listed under 24 CFR 50.4 as follows:
(1) For minor rehabilitation of a building and acquisition of any
property, Federal environmental laws and authorities may apply when the
property is:
(i) Located within designated coastal barrier resources;
(ii) Contaminated by toxic chemicals or radioactive materials;
(iii) Located within a floodplain;
(iv) A building for which flood insurance protection is required;
(v) Located within a runway clear zone at a civil airport or within
a clear zone or accident potential zone at a military airfield; or
(vi) Listed on, or eligible for listing on, the National Register
of Historic Places; located within, or adjacent to, an historic
district, or is a property whose area of potential effects includes a
historic district or property.
(2) For major rehabilitation of a building or for new construction
or rebuilding, and environmental assessment under NEPA is required and,
in addition to paragraph (b)(1) (i) through (vi) of this section, other
Federal environmental laws and authorities may apply when the property:
(i) Affects coastal zone management;
(ii) Is located near hazardous industrial operations handling fuels
or chemicals of an explosive or flammable nature;
(iii) Affects a sole source aquifer;
(iv) Affects endangered species;
(v) Is located within a designated wetland; or
(vi) Is located in a high noise area.
(c) Qualified data sources. The environmental threshold information
provided by applicants mut be from qualified data sources. A qualified
data source means any Federal, State, or local agency with expertise or
experience in environmental protection (e.g., the local community
development agency; the local planning agency; the State environmental
protection agency; or the State Historic Preservation Officer) or any
other source qualified to provide reliable information on the
particular property.
(d) Definition. Minor rehabilitation means proposed fixing and
repairs:
(1) Whose estimated cost is less than 75 percent of the estimated
cost of replacement after completion;
(2) That does not involve changes in land use from residential to
nonresidential, or from nonresidential to residential; and
(3) In the case of residential properties, that does not increase
density more than 20 percent.
(e) Project consultants. In achieving compliance with these
procedures, Borrower's architectural and engineering consultants shall
consider these environmental factors and provide information in their
plan narratives as to how their construction plans conform with the
above environmental factors. To facilitate HUD's compliance with party
50, the Borrower is required to submit the consultant's information and
plan narrative discussing the pertinent environmental factors under
this section.
[[Page 47408]]
Sec. 573.9 Other Requirements.
(a) Nondiscrimination and equal opportunity. The nondiscrimination
and equal opportunity requirements described in 24 CFR part 5, subpart
A apply to this part.
(b) 24 CFR part 84. The provisions of 24 CFR part 84 apply to
guaranteed loans under this part.
(c) Lead-Based Paint. Housing assisted under this part is subject
to the lead-based paint requirements described in 24 CFR part 35.
(d) Labor Standards. (1) Davis-Bacon. All laborers and mechanics
employed by contractors or subcontractors in the performance of
construction work financed in whole or in part with Guaranteed Loan
Funds under this part shall be paid wages at rates not less than those
prevailing on similar construction in the locality as determined by the
Secretary of Labor in accordance with the Davis-Bacon Act, as amended
(40 U.S.C. 276a-276a-5). This paragraph shall apply to the
rehabilitation of residential property only if such property contains
not less than 8 units.
(2) Volunteers. The provisions of paragraph (d)(1) of this section
shall not apply to volunteers under the conditions set forth in 24 CFR
part 70. In applying part 70, loan guarantees under this part shall be
treated as a program for which there is a statutory exemption for
volunteers.
(3) Labor standards. Any contract, subcontract, or building loan
agreement executed for a project subject to Davis-Bacon wage rates
under paragraph (d)(1) of this section shall comply with all labor
standards and provisions of 29 CFR parts 1, 3 and 5 that would be
applicable to a loan guarantee program to which Davis-Bacon wage rates
are made applicable by statute.
Sec. 573.10 Fees for guaranteed loans.
(a) No fees will be assessed by HUD for its guaranty of a loan
under this part.
(b) The lender may assess the Borrower loan origination fees or
other charges provided that such fees and charges are those charged by
the lender to its other customers for similar transactions, and are no
higher than those charged by the lender for similar transactions.
Sec. 573.11 Record Access and Recordkeeping.
Records pertaining to the loans made by the Financial Institution
shall be held for the life of the loan. A lender with a Section 4
Guaranteed Loan shall allow HUD, the Comptroller General of the United
States, and their authorized representatives access from time to time
to any documents, papers or files which are pertinent to the guaranteed
loan, and to inspect and make copies of such records which relate to
any Section 4 Loan. Any inspection will be made during the lender's
regular business hours or any other mutually convenient time.
Dated: September 5, 1996.
Howard Glaser,
Acting Assistant Secretary for Community Planning and Development.
[FR Doc. 96-23081 Filed 9-5-96; 2:54 pm]
BILLING CODE 4210-29-P
