Approval of Farm Credit System Lending Institutions in FHA Mortgage Insurance Programs, 53362-53364 [2011-21910]
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53362
Federal Register / Vol. 76, No. 166 / Friday, August 26, 2011 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS
Johnson County Executive Airport,
Olathe, KS. Airspace reconfiguration is
necessary due to the decommissioning
of the Johnson County VOR/DME and
cancellation of the VOR approach.
Controlled airspace is necessary for the
safety and management of IFR
operations at the airport.
Class E airspace areas are published
in Paragraphs 6004 and 6005,
respectively, of FAA Order 7400.9U,
dated August 18, 2010, and effective
September 15, 2010, which is
incorporated by reference in 14 CFR
71.1. The Class E airspace designation
listed in this document would be
published subsequently in the Order.
The FAA has determined that this
proposed regulation only involves an
established body of technical
regulations for which frequent and
routine amendments are necessary to
keep them operationally current. It,
therefore, (1) is not a ‘‘significant
regulatory action’’ under Executive
Order 12866; (2) is not a ‘‘significant
rule’’ under DOT Regulatory Policies
and Procedures (44 FR 11034; February
26, 1979); and (3) does not warrant
preparation of a Regulatory Evaluation
as the anticipated impact is so minimal.
Since this is a routine matter that will
only affect air traffic procedures and air
navigation, it is certified that this rule,
when promulgated, will not have a
significant economic impact on a
substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the U.S. Code. Subtitle 1,
Section 106 describes the authority of
the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more
detail the scope of the agency’s
authority. This rulemaking is
promulgated under the authority
described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it would
modify controlled airspace at Johnson
County Executive Airport, Olathe, KS.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
In consideration of the foregoing, the
Federal Aviation Administration
proposes to amend 14 CFR part 71 as
follows:
16:51 Aug 25, 2011
1. The authority citation for part 71
continues to read as follows:
Authority: 49 U.S.C. 106(g); 40103, 40113,
40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–
1963 Comp., p. 389.
§ 71.1
[Amended]
2. The incorporation by reference in
14 CFR 71.1 of FAA Order 7400.9U,
Airspace Designations and Reporting
Points, dated August 18, 2010, and
effective September 15, 2010, is
amended as follows:
Paragraph 6004 Class E airspace areas
designated as an extension to a Class D or
Class E surface area.
*
*
*
*
*
ACE KS E4 Olathe, Johnson County
Executive Airport, KS [Removed]
Paragraph 6005 Class E airspace areas
extending upward from 700 feet or more
above the surface of the earth.
*
*
*
*
*
ACE KS E5 Olathe, Johnson County
Executive Airport, KS [Amended]
Olathe, Johnson County Executive Airport,
KS
(Lat. 38°50′51″ N., long. 94°44′15″ W.)
That airspace extending upward from 700
feet above the surface within a 6.4-mile
radius of Johnson County Executive Airport.
Issued in Fort Worth, TX, on August 18,
2011.
Walter L. Tweedy,
Acting Manager, Operations Support Group,
ATO Central Service Center.
[FR Doc. 2011–21914 Filed 8–25–11; 8:45 am]
BILLING CODE 4901–13–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Part 202
[Docket No. FR–5416–P–01]
RIN 2502–AI91
Approval of Farm Credit System
Lending Institutions in FHA Mortgage
Insurance Programs
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, HUD.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
amend HUD regulations to enable the
direct lending institutions of the Farm
Credit System to seek approval to
participate in the Federal Housing
Administration (FHA) mortgage
SUMMARY:
The Proposed Amendment
VerDate Mar<15>2010
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
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insurance programs as approved
mortgagees and lenders. Recent
difficulties in mortgage finance markets
have reduced the availability of housing
credit in rural areas. HUD proposes to
extend FHA mortgagee and lender
eligibility to the Farm Credit System to
provide an additional avenue for
mortgage financing in these areas.
DATES: Comment Due Date: October 25,
2011.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposed rule to the Regulations
Division, Office of General Counsel,
Department of Housing and Urban
Development, 451 7th Street, SW.,
Room 10276, Washington, DC 20410–
0500. Communications must refer to the
above docket number and title. There
are two methods for submitting public
comments. All submissions must refer
to the above docket number and title.
1. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street, SW., Room 10276,
Washington, DC 20410–0500.
2. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
https://www.regulations.gov. HUD
strongly encourages commenters to
submit comments electronically.
Electronic submission of comments
allows the commenter maximum time to
prepare and submit a comment, ensures
timely receipt by HUD, and enables
HUD to make them immediately
available to the public. Comments
submitted electronically through the
https://www.regulations.gov Web site can
be viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
Note: To receive consideration as public
comments, comments must be submitted
through one of the two methods specified
above. Again, all submissions must refer to
the docket number and title of the rule.
No Facsimile Comments. Facsimile
(Fax) comments are not acceptable.
Public Inspection of Public
Comments. All properly submitted
comments and communications
submitted to HUD will be available for
public inspection and copying between
8 a.m. and 5 p.m. weekdays at the above
address. Due to security measures at the
HUD Headquarters building, an
appointment to review the public
comments must be scheduled in
advance by calling the Regulations
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Federal Register / Vol. 76, No. 166 / Friday, August 26, 2011 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS
Division at 202–708–3055 (this is not a
toll-free number). Individuals with
speech or hearing impairments may
access this number via TTY by calling
the Federal Information Relay Service at
800–877–8339. Copies of all comments
submitted are available for inspection
and downloading at https://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Office of Lender Activities and Program
Compliance, Department of Housing
and Urban Development, 451 7th Street,
SW., Washington, DC 20410–8000;
telephone number 202–708–1515 (this
is not a toll-free number). Persons with
hearing or speech impairments may
access this number through TTY by
calling the toll-free Federal Information
Relay Service at 800–877–8339.
SUPPLEMENTARY INFORMATION:
I. Background
Section 203(b)(1) of the National
Housing Act (12 U.S.C. 1709(b)(1))
(NHA) provides that in order for a
mortgage to be eligible for Federal
Housing Administration (FHA)
mortgage insurance under Title II of the
NHA, the mortgage shall ‘‘* * * have
been made to, and held by, a mortgagee
approved by the Secretary as
responsible and able to service the
mortgage properly.’’ Similar approval
provisions for lenders are contained in
Title I, section 2 of the NHA (12 U.S.C.
1703), which authorizes FHA insurance
of lending institutions. Specifically,
section 2(a) of the NHA provides that
the Secretary of HUD is authorized to
insure lenders ‘‘which the Secretary
finds to be qualified by experience of
facilities. * * *’’ The regulations that
implement these statutory mandates are
codified at 24 CFR part 202 (entitled
‘‘Approval of Lending Institutions and
Mortgagees’’). The regulations establish
several categories of mortgagees and
lenders, based upon government
association or supervision, capital net
worth, and the mortgage or lending
functions in which the applicants for
FHA approval intend to engage.
The part 202 regulations do not
currently provide for FHA approval of
lending institutions that are part of the
Farm Credit System. The Farm Credit
System is a federally chartered network
of borrower-owned lending institutions
composed of cooperatives and related
service organizations. The mission of
the Farm Credit System is to provide
sound and dependable credit to
American farmers, ranchers, producers,
or harvesters of aquatic products, their
cooperatives, and farm-related
businesses. The lending institutions that
comprise the Farm Credit System make
VerDate Mar<15>2010
15:45 Aug 25, 2011
Jkt 223001
appropriately structured loans
(including loans for the purchase of
moderately priced homes in rural areas)
to qualified individuals and businesses
at competitive rates, and provide
financial services and advice to those
persons and businesses. Federal
oversight by the Farm Credit
Administration provides for the safety
and soundness of participating lending
institutions.
The four farm credit banks, one
agricultural credit bank (hereinafter
collectively referred to as the Farm
Credit banks), and their direct lender
associations (the Agricultural Credit
Associations) comprise the major
functional entities of the Farm Credit
System. The Farm Credit banks are
government-sponsored enterprises
(GSEs) and must operate within limits
established by the Farm Credit Act of
1971, as amended (12 U.S.C. 2001 et
seq.). In general, the Farm Credit banks
provide services and funds to local
Agricultural Credit Associations that, in
turn, provide short-, intermediate-, and
long-term credit to farmers, ranchers,
producers, and harvesters of aquatic
products, and to rural residents for
moderately priced housing. The
Agricultural Credit Associations also
make loans for basic agricultural
processing and marketing activities, and
to farm-related businesses.
The Farm Credit banks collectively
issue debt securities in the national and
international money markets through
the Federal Farm Credit Banks Funding
Corporation and use this capital to
provide borrowers with access to
reliable and competitive credit. The full
financial strength of all of the Farm
Credit banks stands behind the debt
issued on behalf of the Farm Credit
System. In addition, investors in Farm
Credit System debt are protected by the
assets of the self-funded Farm Credit
System Insurance Fund, which is
administered by the Farm Credit System
Insurance Corporation. Additional
information regarding the Farm Credit
System is available on the Farm Credit
Administration Web site at https://
www.fca.gov/.
II. This Proposed Rule
This proposed rule would amend
HUD’s mortgagee and lender approval
regulations at 24 CFR part 202 to enable
the direct lending institutions of the
Farm Credit System to seek approval to
participate in the mortgage insurance
programs under the NHA as FHAapproved mortgagees and lenders. At
the time HUD originally published its
part 202 regulations in 1997, given the
then-ready availability of mortgage
credit and the existence of other
PO 00000
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Fmt 4702
Sfmt 4702
53363
mortgage assistance programs for rural
housing, there was little need to include
the Farm Credit Banks and Agricultural
Credit Associations. However, the
downturn in the mortgage lending
market has prompted HUD to reconsider
this omission. As lenders strive to
increase capital reserves and tighten
underwriting standards, and as private
mortgage insurers retreat from some
markets, the availability of financing for
housing is reduced, particularly in rural
areas. HUD proposes to extend FHA
mortgagee and lender eligibility to the
Farm Credit System to provide an
additional avenue for mortgage
financing in rural areas. Participation in
FHA programs incentivizes lenders to
make mortgage credit available by
insuring them against potential losses in
the event of defaults. Further, FHAinsured mortgage loans can be
securitized by Ginnie Mae and sold in
the secondary market, which can
significantly improve the availability of
funds and permit more favorable
interest rates than would otherwise be
likely.
FHA proposes to amend 24 CFR
202.10, which lists the governmental
institutions and GSEs eligible to
participate in FHA programs, by adding
the Agricultural Credit Associations as
eligible for FHA approval as
Government mortgagees and lenders.
Approval of Farm Credit System directlending institutions would be based on
the same requirements applicable to
other GSEs under § 202.10. HUD
believes the proposed extension of FHA
program eligibility will better enable the
direct-lending institutions of the Farm
Credit System to provide sound and
dependable mortgage credit to rural
communities.
III. Findings and Certifications
Executive Order 12866, Regulatory
Planning and Review
The Office of Management and Budget
(OMB) reviewed this proposed rule
under Executive Order 12866 (entitled
‘‘Regulatory Planning and Review’’).
The proposed rule has been determined
to be a ‘‘significant regulatory action,’’
as defined in section 3(f) of the Order,
but not economically significant, as
provided in section 3(f)(1) of the Order.
Based on Farm Credit Administration
(FCA) data, HUD determined it is
reasonable to assume a 5 percent
increase in the origination of FHAinsured mortgages by Farm Credit
System institutions as a result of this
proposed rule. Based on the
approximately 44,000 rural FCA home
loans originated in 2010, FHA could
expect an additional 2,200 loans
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Federal Register / Vol. 76, No. 166 / Friday, August 26, 2011 / Proposed Rules
mstockstill on DSK4VPTVN1PROD with PROPOSALS
annually. Given this loan volume, the
effects of this rule will not in any year
exceed the $100 million threshold for an
economically significant action as set
forth by Executive Order 12866.
The docket file for this proposed rule
is available for public inspection in the
Regulations Division, Office of General
Counsel, Department of Housing and
Urban Development, 451 7th Street,
SW., Room 10276, Washington, DC
20410–0500. Due to security measures
at the HUD Headquarters building,
please schedule an appointment to
review the docket file by calling the
Regulations Division at 202–402–3055
(this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
via TTY by calling the Federal
Information Relay Service at 800–877–
8339.
burdensome alternatives to this rule that
will meet HUD’s objectives as described
in the preamble to this rule.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601 et seq.) generally requires
an agency to conduct a regulatory
flexibility analysis of any rule subject to
notice and comment rulemaking
requirements, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities.
This proposed rule would not impose
any new regulatory requirements or
economic burdens on small entities.
Indeed, the rule imposes no new
requirements on any entities. Rather, the
proposed rule would merely provide an
option for direct lending institutions of
the Farm Credit System to participate in
HUD’s mortgage insurance programs
under the NHA as FHA-approved
supervised lenders and mortgagees.
Farm Credit System institutions wishing
to participate in the programs would be
required to comply with FHA mortgagee
and lender approval requirements;
however, participation in the mortgage
insurance programs is voluntary.
Accordingly, to the extent that the
proposed rule has any economic impact,
it would be to confer the economic
benefit of participating in the FHA
mortgage insurance programs to those
financial institutions of the Farm Credit
System that voluntarily elect to seek
approval as FHA-approved mortgagees
or lenders.
For the above reasons, the
undersigned has determined that the
final rule will not have a significant
economic impact on a substantial
number of small entities.
Notwithstanding HUD’s determination
that this rule will not have a significant
effect on a substantial number of small
entities, HUD specifically invites
comments regarding any less
Executive Order 13132, Federalism
Executive Order 13132 (entitled
‘‘Federalism’’) prohibits an agency from
publishing any rule that has federalism
implications if the rule either imposes
substantial direct compliance costs on
state and local governments and is not
required by statute, or the rule preempts
state law, unless the agency meets the
consultation and funding requirements
of section 6 of the Executive Order. This
rule would not have federalism
implications and would not impose
substantial direct compliance costs on
state and local governments or preempt
state law within the meaning of the
Executive Order.
VerDate Mar<15>2010
15:45 Aug 25, 2011
Jkt 223001
Environmental Impact
This rule does not direct, provide for
assistance or loan and mortgage
insurance for, or otherwise govern or
regulate, real property acquisition,
disposition, leasing, rehabilitation,
alteration, demolition, or new
construction, or establish, revise, or
provide for standards for construction or
construction materials, manufactured
housing, or occupancy. This rule is
limited to the eligibility of those entities
that may be approved as FHA-approved
lenders. Accordingly, under 24 CFR
50.19(c)(1), this rule is categorically
excluded from environmental review
under the National Environmental
Policy Act of 1969 (42 U.S.C. 4321).
Paperwork Reduction Act
The information collection
requirements contained in this notice
have been approved by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520) and assigned
OMB Control Number 2502–0005. In
accordance with the Paperwork
Reduction Act, 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 currently valid OMB control
number.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1531–
1538) (UMRA) establishes requirements
for federal agencies to assess the effects
of their regulatory actions on state,
local, and tribal governments, and on
the private sector. This rule would not
impose any federal mandates on any
state, local, or tribal governments, or on
the private sector, within the meaning of
the UMRA.
PO 00000
Frm 00021
Fmt 4702
Sfmt 4702
List of Subjects in 24 CFR Part 202
Administrative practice and
procedure, Home improvement,
Manufactured homes, Mortgage
insurance, Reporting and recordkeeping
requirements.
Accordingly, for the reasons stated in
the preamble above, HUD proposes to
amend 24 CFR part 202 as follows:
PART 202—APPROVAL OF LENDING
INSTITUTIONS AND MORTGAGEES
1. The authority citation for part 202
continues to read as follows:
Authority: 12 U.S.C. 1703, 1709, and
1715b; 42 U.S.C. 3535(d).
2. In § 202.10, revise the first sentence
of paragraph (a) to read as follows:
§ 202.10 Governmental institutions,
Government-sponsored enterprises, public
housing agencies and State housing
agencies.
(a) Definition. A Federal, State or
municipal governmental agency, a
Federal Reserve Bank, a Federal Home
Loan Bank, the Federal Home Loan
Mortgage Corporation, the Federal
National Mortgage Association, or an
Agricultural Credit Association
affiliated with a Farm Credit Bank or
Agricultural Credit Bank, may be an
approved mortgagee or lender. * * *
*
*
*
*
*
Dated: August 22, 2011.
Carol J. Galante,
Acting Assistant Secretary for Housing—
Federal Housing Commissioner.
[FR Doc. 2011–21910 Filed 8–25–11; 8:45 am]
BILLING CODE P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Subchapter S
[Docket No. USCG–2011–0497]
RIN 1625–AB73
Recreational Vessel Propeller Strike
and Carbon Monoxide Poisoning
Casualty Prevention
Coast Guard, DHS.
Advance notice of proposed
rulemaking.
AGENCY:
ACTION:
The Coast Guard seeks public
input on how best to prevent
recreational boating casualties caused
by propeller strikes and carbon
monoxide (CO) poisoning. The Coast
Guard, in particular, seeks comments on
specific measures to protect recreational
SUMMARY:
E:\FR\FM\26AUP1.SGM
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]]>Agencies
[Federal Register Volume 76, Number 166 (Friday, August 26, 2011)]
[Proposed Rules]
[Pages 53362-53364]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21910]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 202
[Docket No. FR-5416-P-01]
RIN 2502-AI91
Approval of Farm Credit System Lending Institutions in FHA
Mortgage Insurance Programs
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would amend HUD regulations to enable the
direct lending institutions of the Farm Credit System to seek approval
to participate in the Federal Housing Administration (FHA) mortgage
insurance programs as approved mortgagees and lenders. Recent
difficulties in mortgage finance markets have reduced the availability
of housing credit in rural areas. HUD proposes to extend FHA mortgagee
and lender eligibility to the Farm Credit System to provide an
additional avenue for mortgage financing in these areas.
DATES: Comment Due Date: October 25, 2011.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 7th Street,
SW., Room 10276, Washington, DC 20410-0500. Communications must refer
to the above docket number and title. There are two methods for
submitting public comments. All submissions must refer to the above
docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street, SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
https://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
https://www.regulations.gov Web site can be viewed by other commenters
and interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments must
be submitted through one of the two methods specified above. Again,
all submissions must refer to the docket number and title of the
rule.
No Facsimile Comments. Facsimile (Fax) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an appointment to review the public comments must be
scheduled in advance by calling the Regulations
[[Page 53363]]
Division at 202-708-3055 (this is not a toll-free number). Individuals
with speech or hearing impairments may access this number via TTY by
calling the Federal Information Relay Service at 800-877-8339. Copies
of all comments submitted are available for inspection and downloading
at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Office of Lender Activities and
Program Compliance, Department of Housing and Urban Development, 451
7th Street, SW., Washington, DC 20410-8000; telephone number 202-708-
1515 (this is not a toll-free number). Persons with hearing or speech
impairments may access this number through TTY by calling the toll-free
Federal Information Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Section 203(b)(1) of the National Housing Act (12 U.S.C.
1709(b)(1)) (NHA) provides that in order for a mortgage to be eligible
for Federal Housing Administration (FHA) mortgage insurance under Title
II of the NHA, the mortgage shall ``* * * have been made to, and held
by, a mortgagee approved by the Secretary as responsible and able to
service the mortgage properly.'' Similar approval provisions for
lenders are contained in Title I, section 2 of the NHA (12 U.S.C.
1703), which authorizes FHA insurance of lending institutions.
Specifically, section 2(a) of the NHA provides that the Secretary of
HUD is authorized to insure lenders ``which the Secretary finds to be
qualified by experience of facilities. * * *'' The regulations that
implement these statutory mandates are codified at 24 CFR part 202
(entitled ``Approval of Lending Institutions and Mortgagees''). The
regulations establish several categories of mortgagees and lenders,
based upon government association or supervision, capital net worth,
and the mortgage or lending functions in which the applicants for FHA
approval intend to engage.
The part 202 regulations do not currently provide for FHA approval
of lending institutions that are part of the Farm Credit System. The
Farm Credit System is a federally chartered network of borrower-owned
lending institutions composed of cooperatives and related service
organizations. The mission of the Farm Credit System is to provide
sound and dependable credit to American farmers, ranchers, producers,
or harvesters of aquatic products, their cooperatives, and farm-related
businesses. The lending institutions that comprise the Farm Credit
System make appropriately structured loans (including loans for the
purchase of moderately priced homes in rural areas) to qualified
individuals and businesses at competitive rates, and provide financial
services and advice to those persons and businesses. Federal oversight
by the Farm Credit Administration provides for the safety and soundness
of participating lending institutions.
The four farm credit banks, one agricultural credit bank
(hereinafter collectively referred to as the Farm Credit banks), and
their direct lender associations (the Agricultural Credit Associations)
comprise the major functional entities of the Farm Credit System. The
Farm Credit banks are government-sponsored enterprises (GSEs) and must
operate within limits established by the Farm Credit Act of 1971, as
amended (12 U.S.C. 2001 et seq.). In general, the Farm Credit banks
provide services and funds to local Agricultural Credit Associations
that, in turn, provide short-, intermediate-, and long-term credit to
farmers, ranchers, producers, and harvesters of aquatic products, and
to rural residents for moderately priced housing. The Agricultural
Credit Associations also make loans for basic agricultural processing
and marketing activities, and to farm-related businesses.
The Farm Credit banks collectively issue debt securities in the
national and international money markets through the Federal Farm
Credit Banks Funding Corporation and use this capital to provide
borrowers with access to reliable and competitive credit. The full
financial strength of all of the Farm Credit banks stands behind the
debt issued on behalf of the Farm Credit System. In addition, investors
in Farm Credit System debt are protected by the assets of the self-
funded Farm Credit System Insurance Fund, which is administered by the
Farm Credit System Insurance Corporation. Additional information
regarding the Farm Credit System is available on the Farm Credit
Administration Web site at https://www.fca.gov/.
II. This Proposed Rule
This proposed rule would amend HUD's mortgagee and lender approval
regulations at 24 CFR part 202 to enable the direct lending
institutions of the Farm Credit System to seek approval to participate
in the mortgage insurance programs under the NHA as FHA-approved
mortgagees and lenders. At the time HUD originally published its part
202 regulations in 1997, given the then-ready availability of mortgage
credit and the existence of other mortgage assistance programs for
rural housing, there was little need to include the Farm Credit Banks
and Agricultural Credit Associations. However, the downturn in the
mortgage lending market has prompted HUD to reconsider this omission.
As lenders strive to increase capital reserves and tighten underwriting
standards, and as private mortgage insurers retreat from some markets,
the availability of financing for housing is reduced, particularly in
rural areas. HUD proposes to extend FHA mortgagee and lender
eligibility to the Farm Credit System to provide an additional avenue
for mortgage financing in rural areas. Participation in FHA programs
incentivizes lenders to make mortgage credit available by insuring them
against potential losses in the event of defaults. Further, FHA-insured
mortgage loans can be securitized by Ginnie Mae and sold in the
secondary market, which can significantly improve the availability of
funds and permit more favorable interest rates than would otherwise be
likely.
FHA proposes to amend 24 CFR 202.10, which lists the governmental
institutions and GSEs eligible to participate in FHA programs, by
adding the Agricultural Credit Associations as eligible for FHA
approval as Government mortgagees and lenders. Approval of Farm Credit
System direct-lending institutions would be based on the same
requirements applicable to other GSEs under Sec. 202.10. HUD believes
the proposed extension of FHA program eligibility will better enable
the direct-lending institutions of the Farm Credit System to provide
sound and dependable mortgage credit to rural communities.
III. Findings and Certifications
Executive Order 12866, Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this proposed
rule under Executive Order 12866 (entitled ``Regulatory Planning and
Review''). The proposed rule has been determined to be a ``significant
regulatory action,'' as defined in section 3(f) of the Order, but not
economically significant, as provided in section 3(f)(1) of the Order.
Based on Farm Credit Administration (FCA) data, HUD determined it
is reasonable to assume a 5 percent increase in the origination of FHA-
insured mortgages by Farm Credit System institutions as a result of
this proposed rule. Based on the approximately 44,000 rural FCA home
loans originated in 2010, FHA could expect an additional 2,200 loans
[[Page 53364]]
annually. Given this loan volume, the effects of this rule will not in
any year exceed the $100 million threshold for an economically
significant action as set forth by Executive Order 12866.
The docket file for this proposed rule is available for public
inspection in the Regulations Division, Office of General Counsel,
Department of Housing and Urban Development, 451 7th Street, SW., Room
10276, Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, please schedule an appointment to review the
docket file by calling the Regulations Division at 202-402-3055 (this
is not a toll-free number). Individuals with speech or hearing
impairments may access this number via TTY by calling the Federal
Information Relay Service at 800-877-8339.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This proposed rule would not impose any new regulatory requirements
or economic burdens on small entities. Indeed, the rule imposes no new
requirements on any entities. Rather, the proposed rule would merely
provide an option for direct lending institutions of the Farm Credit
System to participate in HUD's mortgage insurance programs under the
NHA as FHA-approved supervised lenders and mortgagees. Farm Credit
System institutions wishing to participate in the programs would be
required to comply with FHA mortgagee and lender approval requirements;
however, participation in the mortgage insurance programs is voluntary.
Accordingly, to the extent that the proposed rule has any economic
impact, it would be to confer the economic benefit of participating in
the FHA mortgage insurance programs to those financial institutions of
the Farm Credit System that voluntarily elect to seek approval as FHA-
approved mortgagees or lenders.
For the above reasons, the undersigned has determined that the
final rule will not have a significant economic impact on a substantial
number of small entities. Notwithstanding HUD's determination that this
rule will not have a significant effect on a substantial number of
small entities, HUD specifically invites comments regarding any less
burdensome alternatives to this rule that will meet HUD's objectives as
described in the preamble to this rule.
Environmental Impact
This rule does not direct, provide for assistance or loan and
mortgage insurance for, or otherwise govern or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. This rule is limited to the eligibility of those
entities that may be approved as FHA-approved lenders. Accordingly,
under 24 CFR 50.19(c)(1), this rule is categorically excluded from
environmental review under the National Environmental Policy Act of
1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on state and local
governments and is not required by statute, or the rule preempts state
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This rule would not have
federalism implications and would not impose substantial direct
compliance costs on state and local governments or preempt state law
within the meaning of the Executive Order.
Paperwork Reduction Act
The information collection requirements contained in this notice
have been approved by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned
OMB Control Number 2502-0005. In accordance with the Paperwork
Reduction Act, 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 currently valid OMB control number.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments, and on the private sector. This rule would not
impose any federal mandates on any state, local, or tribal governments,
or on the private sector, within the meaning of the UMRA.
List of Subjects in 24 CFR Part 202
Administrative practice and procedure, Home improvement,
Manufactured homes, Mortgage insurance, Reporting and recordkeeping
requirements.
Accordingly, for the reasons stated in the preamble above, HUD
proposes to amend 24 CFR part 202 as follows:
PART 202--APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES
1. The authority citation for part 202 continues to read as
follows:
Authority: 12 U.S.C. 1703, 1709, and 1715b; 42 U.S.C. 3535(d).
2. In Sec. 202.10, revise the first sentence of paragraph (a) to
read as follows:
Sec. 202.10 Governmental institutions, Government-sponsored
enterprises, public housing agencies and State housing agencies.
(a) Definition. A Federal, State or municipal governmental agency,
a Federal Reserve Bank, a Federal Home Loan Bank, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, or an
Agricultural Credit Association affiliated with a Farm Credit Bank or
Agricultural Credit Bank, may be an approved mortgagee or lender. * * *
* * * * *
Dated: August 22, 2011.
Carol J. Galante,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2011-21910 Filed 8-25-11; 8:45 am]
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