National Housing Law Project Housing Law Bulletin

Recent Regulations and Notices

The following are housing-related regulations and Notices that HUD and other federal agencies have recently issued. For the most part, the summaries are taken directly from the agency's summaries in the Federal Register. The Notice summaries are taken from their introductory paragraphs. Copies of the cited documents may be secured from various sources, including (1) the Handsnet folder at Legal Services/Substantive Law/Housing Forum, (2) the Government Printing Office's spot on the World Wide Web,¹ (3) bound volumes of the Federal Register, (4) HUD Clips,² and (5) HUD.³ Citations are included with each document to help you secure copies.

HUD Regulations

Implementation of the Housing for Older Persons Act of 1995
24 C.F.R. Part 100
62 Fed. Reg. 1,999-2,005 (Jan. 25, 1997)
Summary: This proposed rule would implement the Housing for Older Persons Act of 1995 (HOPA). HOPA amended the requirements for qualification under the "housing for older persons" exemption established by the Fair Housing Act. In addition, HOPA established a good faith defense against civil money damages for persons who reasonably relied in good faith on the application of the "housing for older persons" exemption even when, in fact, the housing provider did not qualify for the exemption. This rule proposes to update HUD's regulations to reflect the changes made by HOPA.

Sale of HUD-Held Single Family Mortgages; Final Rule
24 C.F.R. Part 291
62 Fed. Reg. 3,765 (Jan. 24, 1997)
Summary: This document represents the final rulemaking for an interim rule that HUD published in the Federal Register on August 31, 1995, regarding the sale of HUD-held single-family mortgage loans. This rule adopts the interim rule as final, and makes certain changes to the rule's provisions.

HUD Federal Register Notices

Notice on Site-Based Waiting Lists
62 Fed. Reg. 1,025 (Jan. 7, 1997)
Summary: This Notice invites certain public housing agencies to request approval of tenant selection and assignment plans that vary from general program requirements in order to implement site-based waiting lists at public housing sites under certain circumstances. The notice explains HUD policy on this matter and describes the procedure for making such requests. HUD will approve under this notice only those requests that are consistent with Title VI of the Civil Rights Act of 1964 and that meet the other requirements of this Notice.

Fiscal Year 1997 Portfolio Reengineering Demonstration Program Guidelines
62 Fed. Reg. 3,565 (Jan. 23, 1997)
Summary: This Notice provides initial guidelines to implement a demonstration program authorized by the Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1997 (Pub. L. No. 104-204, 110 Stat. 2874, Sept. 26, 1996). The program is directed at FHA-insured multifamily projects that have project-based Section 8 contracts with above-market rents. It is intended to explore various approaches for restructuring mortgages and taking other related actions in order to reduce the risk to the FHA insurance fund and lower subsidy costs while preserving housing affordability and availability.

HUD Notices

Procedures for Calculating Earned Administrative Fees in the Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation Programs
Notice PIH 96-84 (HA) (Oct. 21, l996)
Summary: HUD's Fiscal Year 1997 Appropriations Act, enacted on September 26, 1996, as Pub. L. No. 104-202, changed the procedures for calculating ongoing administrative fees for the Section 8 rental certificate, rental voucher, and Moderate Rehabilitation programs (including Single Room Occupancy and Shelter Plus Care programs). This Notice provides guidance to housing agencies and Indian housing authorities (HAs) for the calculation of the ongoing administrative fees. The instructions detailed in this Notice differ substantially from instructions issued in PIH Notice 96-22.

Fees will be based on the total number of units leased by an HA. The first 600 units leased in each program (rental certificate, rental voucher, and Moderate Rehabilitation individually) shall be calculated at 7.5 percent of the base rate. Each unit in excess of 600 for each program shall be calculated at 7.0 percent of the base rate.

The base rate is the higher of (a) the FY 1993 fair market rent (FMR) for a two-bedroom unit in the HA's market area, or (b) the FY 1994 FMR for a two-bedroom unit, but not more than 103.5 percent of the FY 1993 FMR. The appropriate FMR is then adjusted by the local wage component of the Consumer Price Index (Attachment I to this Notice).

FY 1997 Subsidies for Operation of Low-Income Housing Projects
Notice PIH 96-86 (HA) (Nov. 15, 1996)
Summary: The purpose of this Notice is to advise Public Housing Agencies and Indian Housing Authorities (HAs) of the proration of operating budget approvals during federal Fiscal Year 1997. The 1997 Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act includes $2.9 billion for FY 1997 operating subsidy requirements. Under current authorizations, the amount appropriated in the FY 1997 Appropriations Act will not be sufficient to cover total subsidy requirements for both Performance Funding System (PFS) and non-PFS projects. Accordingly, payments to all HAs will be based on 95 percent of the full eligibility of each as determined by the PFS, or the appropriate alternate approach for the non-PFS HAs and projects. Should actual requirements for FY 1997 vary significantly from the estimate, this percentage is subject to change.

Closeout of Indian Housing Development Projects
Notice PIH 96-91 (IHA) (Dec. 10, 1996)
Summary: This Notice provides policies and procedures on the closeout of Indian Housing Development projects. These policies and procedures address reopened projects, reformulation, and overdue Actual Development Cost Certificates (ADCCs). In anticipation of the programmatic changes that will occur with the implementation of the Native American Housing Assistance and Self-Determination Act of 1996,⁴ it is important that the project accounting records for Indian Housing Development projects be as complete as possible. To that end, this Notice stresses the importance of closing out projects and issuing Actual Development Cost Certificates.

Lead-Based Paint (LBP) Disclosure Rule Requirements for Public and Indian Housing and Section 8 Rental Certificate, Rental Voucher and Moderate Rehabilitation Programs
Notice PIH 96-92 (HA) (Dec. 11, 1996)
Summary: The purpose of this Notice is to inform HUD field staff and all public housing agencies and Indian housing authorities (HAs) administering the public and Indian housing and HA-administered Section 8 programs about new lead-based paint disclosure requirements contained in a recently issued regulation.

24 C.F.R. Part 35 and 40 C.F.R. Part 745, Lead; Requirements for Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards in Housing was published as a final rule in the Federal Register on March 6, 1996, and took effect on September 6, 1996. The regulation implements Section 1018 of the Housing and Community Development Act of 1992. According to this regulation, all residential property owners in the United States, including HUD program participants, that sell or lease pre-1978 dwelling units must take new steps to disclose lead-based paint or lead-based paint hazards. This Notice establishes new policy for HUD lead-based paint notification and disclosure requirements pertaining to sale and lease of public and Indian housing and HA-administered Section 8 programs. The Department plans to amend the lead-based paint notification requirements contained in HUD regulations at 24 C.F.R. §§ 965.703 and 982.401 during final rulemaking on the Comprehensive Lead-Based Paint Proposed Rule published on June 7, 1996, at 61 Fed. Reg. 29,170.

Supplement to Notice H96-89
Notice H 96-97 (Nov. 13, 1996)
Summary: This supplement to Notice H 96-89 "FY 1997 HUD Appropriations Act," issued October 15, 1996, provides a chart comparing Section 8 renewal provisions for FY 1997 contract expirations. This chart is provided as a "job aid" to assist in processing Section 8 contract renewals for FY 1997.

Refinancing of Multifamily HUD-Held Loans Sold in Note Sales
Notice H 96-99 (HUD) (Nov. 30, 1997)
Summary: HUD Headquarters has begun to receive numerous inquiries from state/area office staff regarding the acceptance of new mortgage insurance applications for refinancing of formerly HUD-Held mortgage loans that have been sold by FHA in a note sale. Applications for refinancing of HUD-held mortgages pending a note sale should be discouraged by field staff.

The Department does not prohibit lenders that have purchased loans in a note sale from applying for FHA mortgage insurance for refinancing. At the same time, the Department is not obligated to accept or process any mortgage insurance applications with a borrower/principal that has not proven to be a good business partner. Since FHA has already paid an insurance claim on loans sold in a note sale, State/Area Offices should look very carefully at the borrowers/principals and consult with Asset Management staff with regard to past performance, Regulatory Agreement violations, etc.

Multifamily Housing Directors should accept such applications only where they believe the borrower/principal represents an acceptable risk, taking into account their HUD office's past experience with the loan and the borrower/principal.

Discretionary Preferences for Admission to Multifamily Housing Projects
Notice FHEO 96-4 (Oct. 28, 1996)
Summary: Section 402(d)(4) of Public L. No. 104-99, The Balanced Budget Downpayment Act, 1, signed into law on January 26, 1996, suspended mandatory federal preferences in Section 8 and certain other programs.

Under this Notice, in cases where owners adopt preferences not previously in effect, a copy of the change should be sent to the HUD FHEO field office for review of its consistency with civil rights law and civil rights-related program requirements. All applicants should be appropriately notified of their position on a revised waiting list in accordance with the procedures set out at 24 C.F.R. § 5.410(f).

¹At http://www.access.gpo.gov/su_docs.

²Call Aspen Systems at (301) 251-5395 to find out how to use HUD Clips.

³To order Notices and Handbooks from HUD, call (800) 767-7468 or fax (202) 708-2313.

⁴For information on these changes, see Major Restructuring Proposed for Native American Housing Programs, 26 HOUS. L. BULL. 91 (July 1996).