60-Day Notice of Proposed Information Collection: HUD Multifamily Rental Project Closing Documents; OMB Control No.: 2502-0598, 29736-29738 [2020-10516]
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Federal Register / Vol. 85, No. 96 / Monday, May 18, 2020 / Notices
individual justification will be provided
to OMB on a case-by-case basis.
No attempt will be made to generalize
the findings from these three groups of
activities to be nationally representative
or statistically valid. They are meant to
compliment and help to contextualize
performance and evaluation data as part
of a three-pronged approach to
understanding Federal program
implementation and opportunities for
improvement (Performance, Evaluation,
and ‘‘Feedback’’ data 1).
Customer Research: Insights gleaned
from qualitative customer research may
be presented publicly in the format of a
conceptual user persona or customer
journey map. Customer research can
take anywhere from 6 weeks for a short
sprint to a full fiscal year, depending on
the specific project. The Agency expects
most journey mapping efforts to last
approximately 6 months, with a user
persona and journey maps ready for
feedback (both from internal and
external to government stakeholders)
within one month of completing
customer research.
Publicly available Journey maps will
include specific language to
contextualize their use and will be
included in specific requests. This
language can include something like:
jbell on DSKJLSW7X2PROD with NOTICES
What should I know about journey
maps?
Journey maps are living documents—
continually refined and revisited. There
is never a ‘‘final’’ version, and these
maps are meant to serve as a summary
of the voices of actual customers of U.S.
Government services. A map may not
precisely document the way a
Government program is meant to be
navigated, accessed, or used. It might
not capture every government program
or resource available to a customer
segment.
However, it is the product of a
qualitative research approach to gather
insights from customers’ actual
experiences. These findings can help us
to identify areas for high-impact
improvements across delivery channels
and organizational silos.
Customer Feedback: Once touchpoint
surveys are implemented at transaction
points along the customer journey
interacting with Federal services, data
from the A–11 Standard CX Feedback
survey will be submitted to OMB
quarterly for review and publication in
a summary dashboard on
performance.gov.
This data will include:
• Specific transaction point at which
the survey was administered
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18:03 May 15, 2020
Jkt 250001
• Total volume of customers that
interacted at this transaction point
during the given quarter
• Total volume of customers that were
presented the survey
• Total number of customers who
completed the survey
• Mode(s) of collection (ex. online, over
mobile, over the phone, paper form)
• Specific survey instrument that shows
the Agency’s wording of standard A–
11 CX Feedback survey
• Distribution of the responses across
the 5 point Likert scale for each of the
standard questions
The purpose of collecting volume and
response numbers is to share customer
feedback measures in context of the
response rate and total volume of
responses to qualify interpretation of the
CX feedback data.
Testing of Services and Digital
Products: Similar to Customer Research,
this can range from a short two-day
rapid feedback from users within an
Agile product development sprint or
longer effort to gather more extensive
feedback from multiple physical
locations.
DHS is particularly interested in
comments which:
1. Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
2. Evaluate the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used;
3. Enhance the quality, utility, and
clarity of the information to be
collected; and
4. Minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submissions
of responses.
Analysis
Agency: Department of Homeland
Security DHS.
Title: Generic Clearance for Improving
Customer Experience (OMB Circular A–
11, Section 280 Implementation).
OMB Number: 1601–NEW.
Frequency: On Occasion.
Affected Public: Individuals.
Number of Respondents: 2,001,550.
Estimated Time per Respondent: 3
mins or up to 2 hours.
Total Burden Hours: 101,125.
PO 00000
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Dated: May 12, 2020.
Melissa Bruce,
Executive Director, Business Management
Office.
[FR Doc. 2020–10546 Filed 5–15–20; 8:45 am]
BILLING CODE 9110–9B–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–7027–N–13]
60-Day Notice of Proposed Information
Collection: HUD Multifamily Rental
Project Closing Documents; OMB
Control No.: 2502–0598
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, HUD.
ACTION: Notice.
AGENCY:
HUD is seeking approval from
the Office of Management and Budget
(OMB) for the information collection
described below in accordance with the
Paperwork Reduction Act (PRA). The
purpose of this notice is to allow for 60
days of public comment.
DATES: Comments Due Date: July 17,
2020.
SUMMARY:
Interested persons are
invited to submit comments regarding
this information collection. Comments
should refer to the collection by name
and/or OMB Control Number and
should be sent to: Colette Pollard,
Reports Management Officer, QDAM,
Department of Housing and Urban
Development, 451 7th Street SW, Room
4176, Washington, DC 20410–5000;
telephone 202–402–3400 (this is not a
toll-free number) or email at
Colette.Pollard@hud.gov for a copy of
the proposed forms or other available
information. Persons with hearing or
speech impairments may access this
number through TTY by calling the tollfree Federal Relay Service at (800) 877–
8339.
FOR FURTHER INFORMATION CONTACT:
Colette Pollard, Reports Management
Officer, QDAM, Department of Housing
and Urban Development, 451 7th Street
SW, Washington, DC 20410; email
Colette Pollard at Colette.Pollard@
hud.gov or telephone 202–402–3400.
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.
Copies of the documents to be
submitted to OMB may be provided by
Ken Doresky.
SUPPLEMENTARY INFORMATION: This
notice informs the public that HUD is
ADDRESSES:
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Federal Register / Vol. 85, No. 96 / Monday, May 18, 2020 / Notices
jbell on DSKJLSW7X2PROD with NOTICES
seeking approval from OMB for the
information collection described in
Section A.
A. Overview of Information Collection
Title of Information Collection: HUD
Multifamily Rental Project Closing
Documents.
OMB Approval Number: 2502–0598.
OMB Expiration Date: 09/30/2021.
Type of Request: Revision of currently
approved collection.
Form Number Being Revised: HUD–
92420M.
Description of the need for the
information and proposed use: The
form, Subordination Agreement, HUD–
92420M, is used in FHA-insured
multifamily rental project loan closings
with secured, publicly financed
secondary debt, often to promote
affordable housing. The document is
used to subordinate such secured,
secondary financing to the lien of the
FHA-insured mortgage, which must be
in a first lien position as required by the
National Housing Act (12 U.S.C. 1701
et. seq.), on terms and conditions that
are legally and administratively
acceptable to HUD.
The Subordination Agreement is part
of a larger information collection (OMB
Control No. 2502–0598) that consists of
numerous other closing forms (Closing
Documents) used in FHA-insured
multifamily transactions. The Closing
Documents, including the
Subordination Agreement, were last
updated pursuant to the Paperwork
Reduction Act (PRA) in 2018. However,
HUD was not able to complete its
review of public comments received in
connection with the 30-day Federal
Register notice (83 FR 29815; 30-day
notice) published for the previous PRA
renewal for the Closing Documents prior
to the OMB deadline. Therefore, when
HUD initiates a new PRA process for the
Closing Documents later this year, it
will include, as a starting point, changes
HUD anticipated making in response to
the public comments received with the
30-day notice.
Notwithstanding, due to concerns that
state and local housing finance agencies
(HFAs) have expressed concerning
certain terms and conditions in the 2018
Subordination Agreement, HUD is
initiating this separate PRA renewal
effort in order to allow HFAs and other
interested members of the public an
opportunity to comment on the form
and HUD to make agreed upon changes
on a more immediate timeline. It is
HUD’s goal that the PRA process for the
Subordination Agreement will result in
a form that is widely accepted by HFAs
to promote greater efficiency and
consistency in the FHA multifamily
VerDate Sep<11>2014
18:03 May 15, 2020
Jkt 250001
closing process, while also allowing
flexibility for HFA requested changes
necessary for state or local law, as
discussed immediately below.
Revisions to the Subordination
Agreement
HUD added the following instruction
at the request of OMB given HUD’s
policy of considering requested
Subordination Agreement changes to
accommodate state or local law: ‘‘HUD
will consider requested changes to this
form that are necessary to comply with
state or local law. All such requests
must be accompanied by a substantive
explanation prepared by counsel to the
Subordinate Lender. HUD’s written
acceptance of any changes for state or
local law will result in a template
Subordination Agreement—Public, for a
given jurisdiction and program.
Consistent with the PRA, permission to
use any such HUD-approved template
will expire upon implementation of the
next OMB-approved version of this
form. When a new OMB form is issued,
public lenders may request HUD
consideration of changes to the new
form in accordance with the level of
flexibility the new form provides.’’ HUD
notes that the underlying PRA burden
estimate for the Subordination
Agreement now accounts for any legal
opinions that may be required to justify
state or local law changes.
Similarly, HUD added an instruction
in section 3(b) to ensure the
Subordination Agreement is consistent
with existing HUD policy allowing an
exception (on a case-by-case basis) to
the requirement that the subordinate
loan mature no earlier than the FHAinsured senior loan for deal-specific
situations where the resulting risk is
appropriately underwritten. Outside of
this allowance to permit maturity of the
subordinate loan before the FHAinsured senior loan and other existing
instructions allowing flexibility for
certain other terms (e.g., section 3(c)(4)
exception to prohibition against
compounding interest for LIHTC
transactions), HUD does not anticipate
accommodating deal-specific requests
for additional changes to the form.
HFAs and other interested parties are
encouraged to request, and provide a
rationale for, any changes deemed
necessary during this PRA process.
In response to the 30-day notice, one
commenter objected to section 3(c) that
requires HUD language be inserted into
the subordinate note because many
subordinate lenders use pre-approved
template documents. HUD rejects this
comment because FHA-insured
multifamily financing is a national
program that requires uniformity to
PO 00000
Frm 00059
Fmt 4703
Sfmt 4703
29737
ensure fairness and efficiency in
closings. Thus, it is critical that every
subordinate loan contain the HUD
required language in order to
accomplish this goal. HUD is, however,
sympathetic to the fact that various
HFAs have templates that must go
through an approval process; therefore,
HUD will permit the HUD-required
subordinate note language to be
incorporated by reference into the
subordinate note.
HUD also rejects a comment objecting
to section 3(c)(3) that restricts a transfer
of the subordinate note without HUD
consent. Section 3(c)(3) reflects HUD’s
longstanding policy that Surplus Cash
Notes are not negotiable instruments or
transferable without HUD consent. This
policy has been in existence since at
least 2011, and since 2002 with the then
applicable Secondary Financing Rider
that was included in the 2002 MAP
Guide The rationale behind this policy
is that HUD needs to be able to assess
whether such transfers will cause
unacceptable risk to the project.
A commenter objected to the language
in section 3(c)(6) that the terms and
provisions of the subordinate lender’s
note are enforceable by HUD and cannot
be amended without HUD’s consent.
HUD rejects this comment. This is
standard language in several of the
Closing Documents. Changing the terms
of the subordinate loan without HUD
consent could negatively impact HUD.
In response to an informal comment
received from an outside party
concerning the policy change previously
made in in section 6(b) to allow
subordinate lenders to exercise their
remedies for subordinate loan defaults
after a 180-day standstill, HUD proposes
to explicitly clarify that such exercise of
remedies is only available for covenant
events of default, and not monetary
events of default. This clarification is
consistent with the rationale discussed
in the 60-day Federal Register notice
published on September 5, 2017 (82 FR
41977).
One commenter took issue with the
section 7(b) prohibition against a crossdefault provision in the subordinate
loan documents. HUD rejects this
comment as a cross-default prohibition
has been in the form since its adoption
in 2011. Numerous transactions with
public secondary debt have closed
without any objection to the
prohibition, which can also be found in
the MAP Guide. The FHA lender and
HUD must control what happens to the
property in the event of a default under
the FHA-insured loan and whether to
remove the borrower through a
foreclosure, not the subordinate lender.
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Federal Register / Vol. 85, No. 96 / Monday, May 18, 2020 / Notices
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One commenter objected to the
requirement in section 10(c) that the
maturity on the subordinate loan
automatically be extended if the FHA
loan is extended due to a deferment of
amortization or forbearance. HUD
rejects this comment as the language in
question reflects current MAP Guide
policy to reserve this protection as
insurer of the first mortgage loan to
allow maximum flexibility in distressed
project situations.
HUD agrees with an HFA’s request to
remove language in section 10(e) that
would force a subordinate lender to
allow an ownership change and
assumption of its loan upon HUD
approval. Further, HUD also agrees with
an HFA’s request to remove the
requirement in section 10(f) that limits
the funds the subordinate lender can
receive upon transfer or sale of the
property to 75% of net proceeds; HUD
will be making a corresponding change
to remove this requirement from the
MAP Guide.
Respondents (i.e., affected public):
FHA lenders, borrowers, housing
finance agencies and other government
agencies that support affordable
housing, and HFA counsel.
Estimated Number of Respondents:
17,468.
Estimated Number of Responses:
17,468.
Frequency of Response: Once per
annum.
Average Hours per Response: 1.5
hours.
Total Estimated Burden: 14,286.85.
B. Solicitation of Public Comment
This notice is soliciting comments
from members of the public and affected
parties concerning the collection of
information described in Section A on
the following:
(1) Whether the proposed collection
of information is necessary for the
proper performance of the functions of
the agency, including whether the
information will have practical utility.
(2) The accuracy of the agency’s
estimate of the burden of the proposed
collection of information.
(3) Ways to enhance the quality,
utility, and clarity of the information to
be collected.
(4) Ways to minimize the burden of
the collection of information on those
who are to respond; including through
the use of appropriate automated
collection techniques or other forms of
information technology, e.g., permitting
electronic submission of responses.
HUD requests that commenters
provide comments and proposed
changes in narrative and/or bulleted
form, accompanied by a detailed
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18:03 May 15, 2020
Jkt 250001
explanation and rationale for each
requested change. Commenters may
include in their detailed explanation
and rationale the relevant excerpt(s)
from the Subordination Agreement with
redlines/strikeouts.
C. Authority
Section 3507 of the Paperwork
Reduction Act of 1995, 44 U.S.C.
Chapter 3507.
Dated: May 12, 2020.
Nacheshia Foxx,
Federal Register Liaison for the Department
for Housing and Urban Development.
[FR Doc. 2020–10516 Filed 5–15–20; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–7027–N–14; OMB Control
No.: 2502–0595]
60-Day Notice of Proposed Information
Collection: FHA-Insured Mortgage
Loan Servicing of Payments,
Prepayments, Terminations,
Assumptions, and Transfers
Office of the Assistant
Secretary for Housing- Federal Housing
Commissioner, HUD.
ACTION: Notice.
AGENCY:
HUD is seeking approval from
the Office of Management and Budget
(OMB) for the information collection
described below. In accordance with the
Paperwork Reduction Act, HUD is
requesting comment from all interested
parties on the proposed collection of
information. The purpose of this notice
is to allow for 60 days of public
comment.
DATES: Comments Due Date: July 17,
2020.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposal. Comments should refer to
the proposal by name and/or OMB
Control Number and should be sent to:
Colette Pollard, Reports Management
Officer, QDAM, Department of Housing
and Urban Development, 451 7th Street
SW, Room 4176, Washington, DC
20410–5000; telephone 202–402–3400
(this is not a toll-free number) or email
at Colette.Pollard@hud.gov for a copy of
the proposed forms or other available
information. Persons with hearing or
speech impairments may access this
number through TTY by calling the tollfree Federal Relay Service at (800) 877–
8339.
FOR FURTHER INFORMATION CONTACT:
Colette Pollard, Reports Management
Officer, QDAM, Department of Housing
SUMMARY:
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
and Urban Development, 451 7th Street
SW, Room 4176, Washington, DC
20410–5000; telephone 202–402–3400
(this is not a toll-free number) or email
at Colette.Pollard@hud.gov for a copy of
the proposed forms or other available
information. Persons with hearing or
speech impairments may access this
number through TTY by calling the tollfree Federal Relay Service at (800) 877–
8339. Copies of available documents
submitted to OMB may be obtained
from Ms. Pollard.
SUPPLEMENTARY INFORMATION: This
notice informs the public that HUD is
seeking approval from OMB for the
information collection described in
Section A.
A. Overview of Information Collection
Title of Information Collection: FHAInsured Mortgage Loan Servicing of
Payments, Prepayments, Terminations,
Assumptions, and Transfers.
OMB Approval Number: 2502–0595.
Type of Request: Revision of currently
approved collection.
Form Numbers: HUD–92210.1.
Description of the need for the
information and proposed use: FHA
insurance is an important source of
mortgage credit for low and moderateincome borrowers. It is essential that the
Federal Housing Administration (FHA)
maintain a healthy mortgage insurance
fund through premiums charged to the
borrower by FHA. Providing policy and
guidance to the single family housing
mortgage industry regarding changes in
FHA’s program is essential to protect
the fund. The information requests
referred to in this PRA submission is to
provide information to support HUD’s
policy and guidance.
Respondents: Business or other for
profit and Individuals or households.
Estimated Number of Respondents:
182.
Estimated Number of Responses:
15,834.
Frequency of Response: On occasion.
Average Hours per Response: 60
minutes to 67 minutes.
Total Estimated Burdens: 17,813.
B. Solicitation of Public Comment
This notice is soliciting comments
from members of the public and affected
parties concerning the collection of
information described in Section A on
the following:
(1) Whether the proposed collection
of information is necessary for the
proper performance of the functions of
the agency, including whether the
information will have practical utility;
(2) The accuracy of the agency’s
estimate of the burden of the proposed
collection of information; (3) Ways to
E:\FR\FM\18MYN1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 96 (Monday, May 18, 2020)]
[Notices]
[Pages 29736-29738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10516]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-7027-N-13]
60-Day Notice of Proposed Information Collection: HUD Multifamily
Rental Project Closing Documents; OMB Control No.: 2502-0598
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: HUD is seeking approval from the Office of Management and
Budget (OMB) for the information collection described below in
accordance with the Paperwork Reduction Act (PRA). The purpose of this
notice is to allow for 60 days of public comment.
DATES: Comments Due Date: July 17, 2020.
ADDRESSES: Interested persons are invited to submit comments regarding
this information collection. Comments should refer to the collection by
name and/or OMB Control Number and should be sent to: Colette Pollard,
Reports Management Officer, QDAM, Department of Housing and Urban
Development, 451 7th Street SW, Room 4176, Washington, DC 20410-5000;
telephone 202-402-3400 (this is not a toll-free number) or email at
[email protected] for a copy of the proposed forms or other
available information. Persons with hearing or speech impairments may
access this number through TTY by calling the toll-free Federal Relay
Service at (800) 877-8339.
FOR FURTHER INFORMATION CONTACT: Colette Pollard, Reports Management
Officer, QDAM, Department of Housing and Urban Development, 451 7th
Street SW, Washington, DC 20410; email Colette Pollard at
[email protected] or telephone 202-402-3400. 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.
Copies of the documents to be submitted to OMB may be provided by
Ken Doresky.
SUPPLEMENTARY INFORMATION: This notice informs the public that HUD is
[[Page 29737]]
seeking approval from OMB for the information collection described in
Section A.
A. Overview of Information Collection
Title of Information Collection: HUD Multifamily Rental Project
Closing Documents.
OMB Approval Number: 2502-0598.
OMB Expiration Date: 09/30/2021.
Type of Request: Revision of currently approved collection.
Form Number Being Revised: HUD-92420M.
Description of the need for the information and proposed use: The
form, Subordination Agreement, HUD-92420M, is used in FHA-insured
multifamily rental project loan closings with secured, publicly
financed secondary debt, often to promote affordable housing. The
document is used to subordinate such secured, secondary financing to
the lien of the FHA-insured mortgage, which must be in a first lien
position as required by the National Housing Act (12 U.S.C. 1701 et.
seq.), on terms and conditions that are legally and administratively
acceptable to HUD.
The Subordination Agreement is part of a larger information
collection (OMB Control No. 2502-0598) that consists of numerous other
closing forms (Closing Documents) used in FHA-insured multifamily
transactions. The Closing Documents, including the Subordination
Agreement, were last updated pursuant to the Paperwork Reduction Act
(PRA) in 2018. However, HUD was not able to complete its review of
public comments received in connection with the 30-day Federal Register
notice (83 FR 29815; 30-day notice) published for the previous PRA
renewal for the Closing Documents prior to the OMB deadline. Therefore,
when HUD initiates a new PRA process for the Closing Documents later
this year, it will include, as a starting point, changes HUD
anticipated making in response to the public comments received with the
30-day notice.
Notwithstanding, due to concerns that state and local housing
finance agencies (HFAs) have expressed concerning certain terms and
conditions in the 2018 Subordination Agreement, HUD is initiating this
separate PRA renewal effort in order to allow HFAs and other interested
members of the public an opportunity to comment on the form and HUD to
make agreed upon changes on a more immediate timeline. It is HUD's goal
that the PRA process for the Subordination Agreement will result in a
form that is widely accepted by HFAs to promote greater efficiency and
consistency in the FHA multifamily closing process, while also allowing
flexibility for HFA requested changes necessary for state or local law,
as discussed immediately below.
Revisions to the Subordination Agreement
HUD added the following instruction at the request of OMB given
HUD's policy of considering requested Subordination Agreement changes
to accommodate state or local law: ``HUD will consider requested
changes to this form that are necessary to comply with state or local
law. All such requests must be accompanied by a substantive explanation
prepared by counsel to the Subordinate Lender. HUD's written acceptance
of any changes for state or local law will result in a template
Subordination Agreement--Public, for a given jurisdiction and program.
Consistent with the PRA, permission to use any such HUD-approved
template will expire upon implementation of the next OMB-approved
version of this form. When a new OMB form is issued, public lenders may
request HUD consideration of changes to the new form in accordance with
the level of flexibility the new form provides.'' HUD notes that the
underlying PRA burden estimate for the Subordination Agreement now
accounts for any legal opinions that may be required to justify state
or local law changes.
Similarly, HUD added an instruction in section 3(b) to ensure the
Subordination Agreement is consistent with existing HUD policy allowing
an exception (on a case-by-case basis) to the requirement that the
subordinate loan mature no earlier than the FHA-insured senior loan for
deal-specific situations where the resulting risk is appropriately
underwritten. Outside of this allowance to permit maturity of the
subordinate loan before the FHA-insured senior loan and other existing
instructions allowing flexibility for certain other terms (e.g.,
section 3(c)(4) exception to prohibition against compounding interest
for LIHTC transactions), HUD does not anticipate accommodating deal-
specific requests for additional changes to the form. HFAs and other
interested parties are encouraged to request, and provide a rationale
for, any changes deemed necessary during this PRA process.
In response to the 30-day notice, one commenter objected to section
3(c) that requires HUD language be inserted into the subordinate note
because many subordinate lenders use pre-approved template documents.
HUD rejects this comment because FHA-insured multifamily financing is a
national program that requires uniformity to ensure fairness and
efficiency in closings. Thus, it is critical that every subordinate
loan contain the HUD required language in order to accomplish this
goal. HUD is, however, sympathetic to the fact that various HFAs have
templates that must go through an approval process; therefore, HUD will
permit the HUD-required subordinate note language to be incorporated by
reference into the subordinate note.
HUD also rejects a comment objecting to section 3(c)(3) that
restricts a transfer of the subordinate note without HUD consent.
Section 3(c)(3) reflects HUD's longstanding policy that Surplus Cash
Notes are not negotiable instruments or transferable without HUD
consent. This policy has been in existence since at least 2011, and
since 2002 with the then applicable Secondary Financing Rider that was
included in the 2002 MAP Guide The rationale behind this policy is that
HUD needs to be able to assess whether such transfers will cause
unacceptable risk to the project.
A commenter objected to the language in section 3(c)(6) that the
terms and provisions of the subordinate lender's note are enforceable
by HUD and cannot be amended without HUD's consent. HUD rejects this
comment. This is standard language in several of the Closing Documents.
Changing the terms of the subordinate loan without HUD consent could
negatively impact HUD.
In response to an informal comment received from an outside party
concerning the policy change previously made in in section 6(b) to
allow subordinate lenders to exercise their remedies for subordinate
loan defaults after a 180-day standstill, HUD proposes to explicitly
clarify that such exercise of remedies is only available for covenant
events of default, and not monetary events of default. This
clarification is consistent with the rationale discussed in the 60-day
Federal Register notice published on September 5, 2017 (82 FR 41977).
One commenter took issue with the section 7(b) prohibition against
a cross-default provision in the subordinate loan documents. HUD
rejects this comment as a cross-default prohibition has been in the
form since its adoption in 2011. Numerous transactions with public
secondary debt have closed without any objection to the prohibition,
which can also be found in the MAP Guide. The FHA lender and HUD must
control what happens to the property in the event of a default under
the FHA-insured loan and whether to remove the borrower through a
foreclosure, not the subordinate lender.
[[Page 29738]]
One commenter objected to the requirement in section 10(c) that the
maturity on the subordinate loan automatically be extended if the FHA
loan is extended due to a deferment of amortization or forbearance. HUD
rejects this comment as the language in question reflects current MAP
Guide policy to reserve this protection as insurer of the first
mortgage loan to allow maximum flexibility in distressed project
situations.
HUD agrees with an HFA's request to remove language in section
10(e) that would force a subordinate lender to allow an ownership
change and assumption of its loan upon HUD approval. Further, HUD also
agrees with an HFA's request to remove the requirement in section 10(f)
that limits the funds the subordinate lender can receive upon transfer
or sale of the property to 75% of net proceeds; HUD will be making a
corresponding change to remove this requirement from the MAP Guide.
Respondents (i.e., affected public): FHA lenders, borrowers,
housing finance agencies and other government agencies that support
affordable housing, and HFA counsel.
Estimated Number of Respondents: 17,468.
Estimated Number of Responses: 17,468.
Frequency of Response: Once per annum.
Average Hours per Response: 1.5 hours.
Total Estimated Burden: 14,286.85.
B. Solicitation of Public Comment
This notice is soliciting comments from members of the public and
affected parties concerning the collection of information described in
Section A on the following:
(1) Whether the proposed collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility.
(2) The accuracy of the agency's estimate of the burden of the
proposed collection of information.
(3) Ways to enhance the quality, utility, and clarity of the
information to be collected.
(4) Ways to minimize the burden of the collection of information on
those who are to respond; including through the use of appropriate
automated collection techniques or other forms of information
technology, e.g., permitting electronic submission of responses.
HUD requests that commenters provide comments and proposed changes
in narrative and/or bulleted form, accompanied by a detailed
explanation and rationale for each requested change. Commenters may
include in their detailed explanation and rationale the relevant
excerpt(s) from the Subordination Agreement with redlines/strikeouts.
C. Authority
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C.
Chapter 3507.
Dated: May 12, 2020.
Nacheshia Foxx,
Federal Register Liaison for the Department for Housing and Urban
Development.
[FR Doc. 2020-10516 Filed 5-15-20; 8:45 am]
BILLING CODE 4210-67-P
