[Federal Register: July 1, 2003 (Volume 68, Number 126)]
[Notices]
[Page 39443-39445]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy03-131]
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Part VI
Department of Housing and Urban Development
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Changes in Certain Multifamily Mortgage Insurance Premiums; Notice
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4679-N-06]
Changes in Certain Multifamily Mortgage Insurance Premiums
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Notice.
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SUMMARY: In accordance with HUD regulations, this Notice lowers the
mortgage insurance premiums (MIP) for certain Federal Housing
Administration (FHA) mortgage insurance programs whose commitments will
be issued in Fiscal Year (FY) 2004.
DUE DATE: Comment Due Date: July 31, 2003.
ADDRESSES: Interested persons are invited to submit written comments
regarding this rule to the Regulations Division, Room 10276, Office of
General Counsel, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410-0500. Comments should refer
to the above docket number and title. A copy of each comment submitted
will be available for public inspection and copying between 8 a.m. and
5 p.m., weekdays, at the above address. Facsimile (FAX) comments will
not be accepted.
FOR FURTHER INFORMATION CONTACT: Michael McCullough, Director, Office
of Multifamily Development, Department of Housing and Urban
Development, 451 Seventh Street, SW., Washington, DC 20410-8000, (202)
708-1142 (this is not a toll-free number). Hearing- or speech-impaired
individuals may access these numbers through TTY by calling the Federal
Information Relay Service at (800) 877-8339 (this is a toll-free
number).
SUPPLEMENTARY INFORMATION:
Introduction
On March 17, 2003 (68 FR 12792), HUD published a final rule on
``Mortgage Insurance Premiums in Multifamily Housing Programs,'' which
adopted, without change, the interim rule published on July 2, 2001 (66
FR 35072). The final and interim rule revised the regulatory system for
establishing the MIP. Instead of setting the MIP at a specific rate,
the Secretary is permitted to change an MIP within the full range of
HUD's statutory authority of one fourth of one percent to one percent
through a notice, as provided in section 203(c)(1) of the National
Housing Act (the Act) (12 U.S.C. 1709(c)(1)). The final rule states
that HUD will provide a 30-day period for public comment on future
notices changing mortgage insurance premiums in multifamily insured
housing programs. These regulations are codified at 24 CFR 207.252,
207.252a, and 207.254.
This Notice announces the lowering of mortgage insurance premiums
in FY 2004 to 50 basis points for multifamily programs authorized under
sections 207, 220, and 221(d)(4) of the Act without low-income housing
tax credits, section 231 of the Act, and insured programs with HOPE VI
with or without low-income housing tax credits. The effective date of
these changes is October 1, 2003. Multifamily programs under the
following sections of the Act will remain at 80 basis points and will
continue to require a credit subsidy obligation: Section 221(d)(3) for
nonprofit and cooperatives for new construction or rehabilitation,
section 223(d) for operating loss loans for both apartments and health
care facilities, and section 241(a) for supplemental loans for
additions or improvements to existing apartments. The MIP for sections
223(a)(7), 207 pursuant to 223(f), 232, 232 pursuant to 223(f), 242,
and 241(a) of the Act for health care facilities, Title XI, and low-
income housing tax credit projects remain unchanged at 50 basis points.
The mortgage insurance premiums to be in effect for FHA firm
commitments issued, amended, or reissued in FY 2004 are shown in the
table below:
Fiscal Year 2004
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Basis
Multifamily loan program points
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Section 207--Multifamily Housing--New Constr/Sub. Rehab....... 50
Section 207--Manufactured Home Parks.......................... 50
Section 220--Housing In Urban Renewal Areas................... 50
Section 221(d)(3)--Moderate Income Housing.................... 80
Section 221(d)(4)--Moderate Income Housing.................... 50
Section 223(a)(7)--Refinancing of Insured Multifamily Project. 50
Section 223(d)--Operating Loss Loans.......................... 80
Section 207 pursuant to 223(f)--Purchase or Refinance Housing. * 50
Section 213--Cooperatives..................................... 50
Section 231--Housing for the Elderly.......................... 50
Section 232--Health Care Facilities........................... 50
Section 232 pursuant to Section 223(f)--Purchase or Refinance * 50
Health Care..................................................
Section 234(d)--Condominium Housing........................... 50
Section 241(a)--Additions & Improvements for Apartments....... 80
Section 241(a)--Additions & Improvements for Health Care 50
Facilities...................................................
Section 242--Hospitals........................................ 50
Title XI--Group Practice...................................... 50
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* First Year MIP for these programs remain at 100 basis points.
Applicable Mortgage Insurance Premium Procedures
The MIP regulations are found in 24 CFR part 207. This Notice is
published in accordance with the procedures stated in 24 CFR 207.252,
207.252(a), and 207.254.
Transition Guidelines
A. General
If a firm commitment has been issued at a higher MIP, and FHA has
not initially endorsed the note, the lender may request the field
office to reprocess the commitment at the lower MIP and reissue the
commitment on or after October 1, 2003. If the initial endorsement has
occurred the MIP cannot be changed.
B. Extension of Outstanding 57 and 61 Basis Points Firm Commitments
FHA may extend outstanding firm commitments when the Hub/Program
Center determines that the underwriting conclusions (rents, expenses,
construction costs, mortgage amount and case required to close) are
still valid.
C. Reprocessing of Outstanding 57 and 61 Basis Points Firm Commitments
FHA will consider requests from mortgagees to reprocess outstanding
firm commitments at the lower mortgage insurance premium once the new
premiums become effective in FY 2004:
1. Outstanding commitments with initial 60-day expiration dates on
or after the effective date of this MIP notice.
[sbull] FHA Multifamily Hub/Program Center staff will simply
reprocess these cases to reflect the impact of the lower MIP and
reissue commitments with a new date.
2. Outstanding commitments with initial expiration dates prior to
the effective date of this MIP notice which have pending extension
requests or have had extensions granted by FHA beyond the initial 60-
day period.
[sbull] These cases will require more extensive reprocessing by FHA
staff. Reprocessing will include an updated FHA field staff analysis
and review of
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rents, expenses, construction costs, particularly considering any
changes in Davis-Bacon wage rates, and cash required to close. (An
updated appraisal may be required from the mortgagee depending on the
age of the appraisal.) If reprocessing results in favorable
underwriting conclusions, Hub/Program Center staff will reissue
commitments with a new date at the new MIP.
D. Reopening of Expired 57 or 61 Basis Points Firm Commitments
FHA will consider requests from mortgagees, which may be either
updated Traditional Application Processing (TAP) firm commitment
applications or updated Multifamily Accelerated Processing (MAP)
applications with updated exhibits, to reopen expired 57 or 61 basis
points commitments on or after the effective date of the MIP notice,
provided that the reopening requests are received within 90 days of the
expiration of the commitments and include the $.50 per thousand of
requested mortgage reopening fee. Reopening requests will be
reprocessed by FHA field staff under the instructions in paragraph C.2
above.
After expiration of the 90-day reopening period, mortgagees are
required to submit new applications with the $3 per thousand
application fee (MAP applications must start at the pre-application
stage).
Credit Subsidy
Mortgagee Letters will be issued from time to time to advise
mortgagees of any requirements for credit subsidy and the availability
of credit subsidy. In FY 2004, the same three programs will require
credit subsidy as in FY 2003: Section 221(d)(3) for nonprofit and
cooperatives for new construction or substantial rehabilitation,
section 223(d) for operating loss loans for both apartments and health
care facilities, and section 241(a) for supplemental loans for
additions or improvements to existing apartments only. FHA will not
issue amended commitments for increased mortgage amounts nor obligate
additional credit subsidy for projects requiring credit subsidy in FY
2004.
Dated: June 24, 2003.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner, HUD.
Sean Cassidy,
General Deputy Assistant Secretary for Housing.
[FR Doc. 03-16595 Filed 6-30-03; 8:45 am]
BILLING CODE 4210-27-P