Federal Housing Administration (FHA): Multifamily Accelerated Processing (MAP)-Lender and Underwriter Eligibility Criteria and Credit Watch for MAP Lenders, 21991-21992 [2012-8679]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Notices]
[Pages 21991-21992]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8679]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5444-N-02]


Federal Housing Administration (FHA): Multifamily Accelerated 
Processing (MAP)--Lender and Underwriter Eligibility Criteria and 
Credit Watch for MAP Lenders

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This proposed notice provides additional, detailed information 
to FHA-approved lenders and members of the public about HUD's processes 
for determining lender and underwriter eligibility and tier 
qualification for MAP participation. This proposed notice accompanies 
HUD's proposed rule on the same topic, published elsewhere in today's 
Federal Register. This notice includes the quantity, specific 
characteristics, and recentness of transactions that a lender or 
underwriter must have undertaken in order to qualify for each tier of 
MAP approval.

DATES: Comment Due Date: June 11, 2012.

ADDRESSES: Interested persons are invited to submit comments on this 
notice 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 
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 
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 advance appointment to review the public comments must be 
scheduled 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 Relay Service, 
toll-free, at 800-877-8339. Copies of all comments submitted are 
available for inspection and downloading at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Terry W. Clark, Office of Multifamily 
Development, Office of Housing, Department of Housing and Urban 
Development, 451 7th Street SW., Room 6134, Washington DC 20410; 
telephone number (202) 402-2663 (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 Relay Service at 800-877-
8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Under its proposed rule, published elsewhere in today's Federal 
Register, HUD would revise 24 CFR part 200, subpart Y, to provide for 
tiered approval of new and existing MAP lenders and underwriters, such 
that only lenders and underwriters with adequate experience and 
qualifications could underwrite loans involving more complex 
multifamily housing programs and transactions.

II. Purpose

    This proposed notice provides the tiered MAP approval lender and 
underwriter experience requirements referenced in the proposed 
amendment to 24 CFR part 200, ``Multifamily Accelerated Processing 
(MAP); MAP Lender Quality Assurance Enforcement.'' Under the terms of 
the proposed rule, HUD may establish and

[[Page 21992]]

from time to time propose to revise these experience requirements for 
new and existing MAP lenders and underwriters, as market conditions or 
HUD's experience indicate would be prudent to adequately protect the 
FHA General Insurance Fund from unacceptable risk, through notice and 
the opportunity for public comment. The purpose of this notice is to 
propose the minimum number and type of closings required for MAP lender 
and underwriter approval at each qualification tier, and the time frame 
within which the loans must have closed within the tier to be found by 
HUD to be acceptable experience.
    This practice would mitigate risk, since MAP lenders and 
underwriters will now be approved at a tier level commensurate to their 
demonstrated experience.

III. Tier Approval Experience Requirements

    As would be provided in Sec.  200.1411(b) of the proposed rule, an 
FHA lender or underwriter may use MAP to process or underwrite only 
those loan transactions that are covered by the lender or underwriter's 
MAP approval tier. The tiers are as follows:
    Tier 1: Acquisition and refinancing programs (i.e., the FHA 223(f) 
or 223(a)(7) programs) without government subsidies;
    Tier 2: Acquisition and refinancing programs (i.e., the FHA 223(f) 
or 223(a)(7) programs) with or without government subsidies;
    Tier 3: All MAP-eligible programs (i.e., the FHA 220, 223(f), 
223(a)(7), 221(d), 231, and 241 programs) without government subsidies; 
and
    Tier 4: All MAP-eligible programs (i.e., the FHA 220, 223(f), 
223(a)(7), 221(d), 231, and 241 programs), with or without government 
subsidies.
    In accordance with Sec.  200.1413(b) and Sec.  200.1415(b) of the 
proposed rule, a MAP lender or underwriter would be approved at a tier 
level commensurate with the lender or underwriter's experience in 
underwriting and in processing transactions that are covered by that 
tier, or in underwriting and processing equivalent non-FHA loan 
transactions. (A non-FHA transaction may be deemed equivalent to a 
given FHA-covered loan transaction as provided in Sec.  
200.1413(b)(1)(i) or Sec.  200.1415(a)(1), as applicable.) To qualify a 
lender or underwriter for MAP approval at a tier level, the loan 
transactions would be required to have closed and to be of the 
quantities, characteristics, and recentness provided in the following 
table:

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       Tier                        Experience requirements
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Tier 1............  Five firm commitments issued or closings of 223(f)
                     or closing of equivalent transactions within the
                     past 5 years.
Tier 2............  Five firm commitments issued or closings of 223(f)
                     or closing of equivalent transactions within the
                     past 5 years, and at least three of the
                     transactions must have been with government
                     subsidies.*
Tier 3............  Five firm commitments issued or closings of 220,
                     221(d), 231, 232, or 241 or equivalent transactions
                     within the past 5 years.
Tier 4............  Five firm commitments issued or closings of 220,
                     221(d), 231, 232, or 241 or equivalent transactions
                     within the past 5 years, and at least three of the
                     transactions must have been with government
                     subsidies.*
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* See section II.A of the proposed rule's preamble for a discussion of
  qualifying government subsidies.

    The requirement for new and existing lenders and underwriters to 
have undertaken five transactions within 5 years in order to 
demonstrate qualification at a tier represents an increase compared to 
HUD's current policy of requiring underwriters to have undertaken three 
transactions within 3 years for general MAP approval. HUD has observed 
that lenders whose underwriters had only three qualifying transactions 
within 3 years have often had insufficient familiarity with the 
programs and their responsibilities under the MAP program. To ensure 
appropriate management of risk to the FHA insurance fund, it is 
essential that new and existing MAP lenders and underwriters have 
adequate transactional experience before they undertake their first 
transaction pursuant to their MAP approval at a given tier. HUD, 
therefore, proposes to increase the minimum number of transactions to 
five, but, accordingly, to provide that the transactions must have 
occurred within 5 years of when approval is sought, rather than within 
3 years.

    Dated: March 16, 2012.
Carol J. Galante,
 Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2012-8679 Filed 4-11-12; 8:45 am]
BILLING CODE 4210-67-P