Federal Housing Administration (FHA): Home Equity Conversion Mortgage (HECM) HECM for Purchase-Acceptable Monetary Investment Funding Sources and Interested Party Contributions, 73040-73042 [2023-23429]

Download as PDF ddrumheller on DSK120RN23PROD with NOTICES1 73040 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices Personal Identity Verification Management System and Department policy to request a DHS Personal Identity Verification Official (PIV–O) credential, and if applicable, a shield (i.e., metallic law enforcement or nonlaw enforcement badge) to accompany the credential. A DHS PIV–O credential describes authorities delegated to specific DHS employees, contractors, and affiliates who interact with the public or federal, state, local, or tribal entities to perform authorized official functions pursuant to law, statute, regulation, or DHS Directive. The collection of information is obtained from (or on behalf of) the respondent, who may be a current or prospective DHS contractor (i.e., member of the public). The information is collected electronically using a fillable PDF form submitted to the respective DHS credentialing office. The respondent is responsible for only completing Sections 1, 2, and 3 of DHS Form 11000–16; the remaining sections of the form (Sections 4, 5, and 6) are completed by DHS federal employees. Qualified personnel within the DHS credentialing office holding a requisite role in the Identity and Credential System(s) of Record use the collected information to adjudicate the action requested in Section 1 of the DHS Form 11000–16, and as necessary, enroll, identify, and retrieve the applicant’s record in the DHS Identity and Credential System(s) of Record. The collection of information is obtained from the respondent electronically using a fillable PDF form: upon completion, the form is submitted to the respective DHS Component credentialing office in accordance with internal procedures. This information collection does not have an impact on small businesses or other small entities. Collection of the information on DHS Form 11000–16 is voluntary; however, failure to provide the information requested may prevent the respondent (i.e., applicant) from receiving the requested DHS PIV–O credential and/or shield. There is no assurance of confidentiality provided to the respondents. Consistent with DHS’s information sharing mission, this information collection may be shared with Federal, state, local, tribal, foreign or international government agencies, including other DHS Components and offices. This sharing will only take place after DHS determines that the receiving entity has a need to know the information to carry out national security, law enforcement, immigration, intelligence, or other functions VerDate Sep<11>2014 17:08 Oct 23, 2023 Jkt 262001 consistent with the routine uses set forth in Privacy Impact Assessment, DHS/ALL/PIA–014 Personal Identity Verification/Identity Management System (PIV/IDMS) and System of Records Notice, DHS/ALL–026 Department of Homeland Security Personal Identity Verification Management System. This is a new collection. The Office of Management and Budget is particularly interested in comments which: 5. 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; 6. 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; 7. Enhance the quality, utility, and clarity of the information to be collected; and 8. 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: Personal Identity Verification Official (PIV–O) Credential and Shield Request. OMB Number: 1601–NEW. Frequency: Annually. Affected Public: Individuals or Households. Number of Respondents: 1,500. Estimated Time per Respondent: 15 mins. Total Burden Hours: 375 hrs. Robert Porter Dorr, Executive Director, Business Management Directorate. [FR Doc. 2023–23405 Filed 10–23–23; 8:45 am] [Docket No. FR–6382–N–01] Federal Housing Administration (FHA): Home Equity Conversion Mortgage (HECM) HECM for Purchase— Acceptable Monetary Investment Funding Sources and Interested Party Contributions Office of the Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development (HUD). ACTION: Notice. AGENCY: This notice serves to inform members of the public and affected program participants of changes to the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) for Purchase program that HUD intends to make in a future update to HUD’s Single Family Housing Policy Handbook. Pursuant to the FHA Commissioner’s (‘‘Commissioner’’) regulatory authority, FHA will expand the list of acceptable funding sources used to satisfy the borrower’s monetary investment requirement and will permit additional interested party contributions. This notice also informs the public that FHA will remove existing restrictions that prohibit the borrower from accepting cash from a seller or another person or entity that financially benefits from the HECM for Purchase transaction. This notice seeks public comment on these changes. DATES: Comment Due Date: November 24, 2023. FOR FURTHER INFORMATION CONTACT: Mary Jo Sullivan, Acting Director, Office of Single Family Program Development, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW, Room 9266, Washington, DC 20410–9000, telephone number 202– 402–2378 (this is not a toll-free number); email address sffeedback@ hud.gov. HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit: https://www.fcc.gov/consumers/guides/ telecommunications-relay-service-trs. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background: Statutory Authority, Regulations, and Administrative Guidance BILLING CODE 9112–FL–P PO 00000 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Section 2122(a)(9) of the Housing and Economic Recovery Act of 2008 (HERA) amended Section 255 of the National Frm 00054 Fmt 4703 Sfmt 4703 E:\FR\FM\24OCN1.SGM 24OCN1 ddrumheller on DSK120RN23PROD with NOTICES1 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices Housing Act to authorize the Department of Housing and Urban Development (HUD) to insure HECMs used for the purchase of a 1- to 4-family dwelling unit, one unit of which will serve as the borrower’s principal residence. In 2008, based on the authority in section 255, FHA implemented the HECM for Purchase program through Mortgagee Letter (ML) 2008–33, permitting mortgagees to originate HECM for Purchase transactions. ML 2008–33 was superseded by Mortgage Letter 2009–11, which required borrowers to satisfy a monetary investment using cash on hand or cash from the sale or liquidation of the mortgagor’s assets, or certain additional funding sources defined in HUD Handbook 4155.1 REV– 5, section 2–10. FHA through ML 2009–11, however, prohibited certain funding sources for the borrower’s required monetary investment. Specifically, borrowers were prohibited from satisfying the monetary investment requirement using sweat equity, trade equity, rent credit, or cash or its equivalent, in whole or in part, received from the seller or any other person or entity that financially benefits from the HECM for Purchase transaction, or any third party or entity that is reimbursed, directly or indirectly, by the seller or any other person or entity that financially benefits from the HECM for Purchase transaction. Additionally, ML 2009–11 prohibited seller contributions, also known as seller concessions, in any HECM for Purchase transaction. Seller concessions were defined as the use of loan discount points, interest rate buydowns, closing cost down payment assistance, builder incentives, gifts or personal property given by the seller, or any other party involved in the transaction. These limitations on funding sources and interested party contributions redirected expenses customarily paid by the seller or other interested parties to the HECM for Purchase borrower. On January 19, 2017, FHA codified the requirements for the HECM for Purchase program, and other program changes, in the ‘‘Federal Housing Administration (FHA): Strengthening the Home Equity Conversion Mortgage Program’’ Final Rule (82 FR 7094) (‘‘the final rule’’) amending 24 CFR part 206. The final rule changed the funding source restrictions from ML 2009–11, to permit interested party contributions to pay fees required to be paid by the seller under state or local law, for fees that are customarily paid by a seller in the locality of the subject property, and for VerDate Sep<11>2014 17:08 Oct 23, 2023 Jkt 262001 purchase of the Home Warranty policy by the seller (24 CFR 206.44(c)(1)). FHA also codified three permitted funding sources for the borrower’s required monetary investment: cash on hand, cash from the sale or liquidation of the borrower’s assets, and HECM proceeds. The final rule codified regulatory provisions that grant the Commissioner the authority to permit additional funding sources and interested party contributions through future notice in the Federal Register, 24 CFR 206.44(b)(4) and (c)(2), respectively. Based on the foregoing regulatory authority, FHA is issuing this notice to permit additional funding sources and interested party contributions in HECM for Purchase transactions. II. This Notice HECM for Purchase requires Borrowers to contribute substantial liquid assets to meet the negotiated contract sales price for the property plus standard origination fees and charges. By expanding the list of permitted interested party contributions, FHA is more closely aligning its HECM interested party contribution policies with FHA’s forward mortgage programs, while meaningfully increasing the sources of funds available for HECM borrowers to satisfy their capital requirements to originate a HECM for Purchase. For example, a borrower purchasing a property in the state of Arizona with a HECM for Purchase, where: • Contract sales price is $491,974.00; • Borrower’s Closing Costs are $20,300.00; • Appraised Value is $492,000.00; and • Principal Limit is $189, 902.00 (maximum proceeds available to borrower from the HECM). Under current policy, the total amount of cash due from the borrower at closing to complete this transaction is $322,372 ($491,974 plus $20,300 minus $189,902). Under the proposed notice, interested parties could contribute up to 6 percent of the sales price, or $29,518.44, toward the borrower’s monetary requirements, reducing the total amount due from the borrower at closing from $322,372 to $292,853.56. Therefore, pursuant to the Commissioner’s authority under 24 CFR 206.44(b)(4) and 206.44(c)(2), HUD is, through this notice, informing the public and program participants of changes to the FHA’s HECM program, which HUD intends to make effective in a future update to HUD’s Single Family Housing Policy Handbook. PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 73041 For the HECM for Purchase program, FHA will permit the use of an ‘‘interested party contribution,’’ up to six percent of the sales price. ‘‘Interested party contribution’’ will be defined as a payment by an interested party 1 or combination of parties, toward the borrower’s origination fees, other closing costs including any items paid outside of closing, prepaid items, and discount points. The six percent limit may be applied towards but may not exceed the cost of: origination fees; other closing costs paid outside of closing, such as a credit report and appraisal; prepaid items; discount points; interested party payment for permanent and temporary interest rate buydowns; and payment of the initial mortgage insurance premium. Through this notice, FHA will permit additional funding sources that may be used to satisfy the borrower’s monetary investment including premium pricing; 2 gifts; disaster relief grants; and employer assistance. These permitted sources are in addition to cash on hand, cash from the sale or liquidation of the borrower’s assets, and HECM proceeds that are already permitted by regulation. Premium pricing credits from the mortgagee or third-party originator will be excluded from the six percent interested party contribution limit, provided the mortgagee or third-party originator is not the seller, real estate agent, builder, or developer. Fees required to be paid by a seller under state or local law or customarily paid by a seller in the subject property locality, including real estate agent commissions or fees, and the purchase of the Home Warranty policy by the seller are already permitted under § 206.44(c)(1) 3 and will be excluded from the six percent interested party contribution limit. Further, as with FHA’s policy for forward-mortgages, FHA will exclude the satisfaction of a Property Assessed Clean Energy (‘‘PACE’’) lien or obligation against the property by the property seller from the definition of an interested party contribution in the HECM for Purchase program. This document seeks comment from interested members of the public on this document generally, and on the issues 1 ‘‘Interested Parties’’ refer to sellers, real estate agents, builders, developers, Mortgagees, ThirdParty Originators, or other parties with an interest in the transaction. 2 ‘‘Premium Pricing’’ refers to the aggregate credits from a mortgagee or third-party originator at the interest rate chosen. 3 24 CFR 206.44(c)(1) permits interested party contributions that are defined as fees required to be paid by a seller under state or local law, fees customarily paid by a seller in the subject property locality, or the purchase of the Home Warranty policy by the seller. E:\FR\FM\24OCN1.SGM 24OCN1 73042 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices discussed previously in this notice. HUD will carefully consider the public comments received through this solicitation as part of a future policy update. Julia R. Gordon, Assistant Secretary for Housing—Federal Housing Commissioner. [FR Doc. 2023–23429 Filed 10–23–23; 8:45 am] BILLING CODE 4210–67–P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management [OMB Control Number 1010–0191; Docket ID: BOEM–2023–0004] Agency Information Collection Activities; Negotiated Noncompetitive Agreement for the Use of Sand, Gravel, and/or Shell Resources on the Outer Continental Shelf Bureau of Ocean Energy Management, Interior. ACTION: Notice of information collection; request for comment. AGENCY: In accordance with the Paperwork Reduction Act of 1995, the Bureau of Ocean Energy Management (BOEM) proposes this information collection request (ICR) to renew Office of Management and Budget (OMB) control number 1010–0191. DATES: Comments must be received by the OMB desk officer no later than November 24, 2023. ADDRESSES: Submit your written comments on this ICR to the OMB desk officer for the Department of the Interior at www.reginfo.gov/public/do/PRAMain. From the www.reginfo.gov/public/do/ PRAMain landing page, find this information collection by selecting ‘‘Currently under Review—Open for Public Comments’’ or by using the search function. Please provide a copy of your comments by parcel delivery service or U.S. mail to the BOEM Information Collection Clearance Officer, Anna Atkinson, Bureau of Ocean Energy Management, 45600 Woodland Road, Sterling, Virginia 20166; or by email to anna.atkinson@ boem.gov. Please reference OMB control number 1010–0191 in the subject line of your comments. You may also comment by searching the docket number ‘‘BOEM–2023–0004’’ at www.regulations.gov. ddrumheller on DSK120RN23PROD with NOTICES1 SUMMARY: FOR FURTHER INFORMATION CONTACT: Anna Atkinson by email at anna.atkinson@boem.gov, or by telephone at 703–787–1025. Individuals in the United States who are deaf, VerDate Sep<11>2014 17:08 Oct 23, 2023 Jkt 262001 deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside of the United States should use the relay services offered within their country to make international calls to the point-ofcontact in the United States. SUPPLEMENTARY INFORMATION: In accordance with the Paperwork Reduction Act of 1995, BOEM provides the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps BOEM assess the impact of its information collection requirements and minimize the public’s reporting burden. It also helps the public understand BOEM’s information collection requirements and provide the requested data in the desired format. Title of Collection: ‘‘30 CFR part 583, Negotiated Noncompetitive Agreements for the Use of Outer Continental Shelf Sand, Gravel, and/or Shell Resources.’’ Abstract: Part 583 in title 30 of the Code of Federal Regulations addresses the use of Outer Continental Shelf (OCS) sand, gravel, and shell resources for shore protection, beach restoration, or coastal wetlands restoration projects undertaken by Federal, State, or local government agencies, or for use in construction projects authorized by or funded in whole or in part by the Federal Government. The OCS Lands Act, 43 U.S.C. 1331 et seq., authorizes the Secretary of the Interior to prescribe rules and regulations to administer leasing of mineral resources on the OCS. Section 1337(k)(2) of title 43 authorizes the Secretary to ‘‘. . . negotiate with any person an agreement for the use of Outer Continental Shelf sand, gravel and shell resources—(i) for use in a program of, or project for, shore protection, beach restoration, or coastal wetlands restoration undertaken by a Federal, State, or local government agency; or (ii) for use in a construction project . . . that is funded in whole or in part by or authorized by the Federal Government.’’ The Secretary delegated this authority to BOEM. This ICR allows BOEM to collect information from an applicant requesting a non-competitive, negotiated agreement. This information is used to determine if the applicant is qualified to enter into such an agreement and to determine if the requested action is warranted. OMB Control Number: 1010–0191. Form Number: None. Type of Review: Extension of a currently approved collection. PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 Respondents/Affected Public: Potential respondents include Federal, State, or local governments. Total Estimated Number of Annual Responses: 45 responses. Total Estimated Number of Annual Burden Hours: 299 hours (Hours are same as currently approved). Respondent’s Obligation: Required to retain or obtain a benefit. Frequency of Collection: On occasion. Total Estimated Annual Non-hour Burden Cost: BOEM has identified no non-hour paperwork cost burdens for this collection. A Federal Register notice with a 60day public comment period on the proposed ICR was published on May 26, 2023 (88 FR 34182). BOEM did not receive any comments. BOEM is again soliciting comments on the proposed ICR. BOEM is especially interested in public comments addressing the following issues: (1) is the collection necessary to the proper functions of BOEM; (2) what can BOEM do to ensure that this information is processed and used in a timely manner; (3) is the burden estimate accurate; (4) how might BOEM enhance the quality, utility, and clarity of the information to be collected; and (5) how might BOEM minimize the burden of this collection on the respondents, including minimizing the burden through the use of information technology? Comments submitted in response to this notice are a matter of public record and will be available for public review on www.reginfo.gov. You should be aware that your entire comment— including your address, phone number, email address, or other personally identifiable information included in your comment—may be made publicly available at any time. In order for BOEM to consider withholding from disclosure your personal identifying information, you must identify, in a cover letter, any information contained in your comment that, if released, would constitute a clearly unwarranted invasion of your personal privacy. You must also briefly describe any possible harmful consequences of the disclosure of information, such as embarrassment, injury, or other harm. Note that BOEM will make available for public inspection all comments in their entirety (except for proprietary information submitted by organizations and businesses, or by individuals identifying themselves as representatives of organizations or businesses). Even if BOEM withholds your information in the context of this ICR, your comment is subject to the Freedom E:\FR\FM\24OCN1.SGM 24OCN1

Agencies

[Federal Register Volume 88, Number 204 (Tuesday, October 24, 2023)]
[Notices]
[Pages 73040-73042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23429]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6382-N-01]


Federal Housing Administration (FHA): Home Equity Conversion 
Mortgage (HECM) HECM for Purchase--Acceptable Monetary Investment 
Funding Sources and Interested Party Contributions

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, Department of Housing and Urban Development (HUD).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice serves to inform members of the public and 
affected program participants of changes to the Federal Housing 
Administration's (FHA) Home Equity Conversion Mortgage (HECM) for 
Purchase program that HUD intends to make in a future update to HUD's 
Single Family Housing Policy Handbook. Pursuant to the FHA 
Commissioner's (``Commissioner'') regulatory authority, FHA will expand 
the list of acceptable funding sources used to satisfy the borrower's 
monetary investment requirement and will permit additional interested 
party contributions. This notice also informs the public that FHA will 
remove existing restrictions that prohibit the borrower from accepting 
cash from a seller or another person or entity that financially 
benefits from the HECM for Purchase transaction. This notice seeks 
public comment on these changes.

DATES: Comment Due Date: November 24, 2023.

FOR FURTHER INFORMATION CONTACT: Mary Jo Sullivan, Acting Director, 
Office of Single Family Program Development, Office of Housing, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
9266, Washington, DC 20410-9000, telephone number 202-402-2378 (this is 
not a toll-free number); email address [email protected]. HUD welcomes 
and is prepared to receive calls from individuals who are deaf or hard 
of hearing, as well as individuals with speech or communication 
disabilities. To learn more about how to make an accessible telephone 
call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background: Statutory Authority, Regulations, and Administrative 
Guidance

    Section 2122(a)(9) of the Housing and Economic Recovery Act of 2008 
(HERA) amended Section 255 of the National

[[Page 73041]]

Housing Act to authorize the Department of Housing and Urban 
Development (HUD) to insure HECMs used for the purchase of a 1- to 4-
family dwelling unit, one unit of which will serve as the borrower's 
principal residence. In 2008, based on the authority in section 255, 
FHA implemented the HECM for Purchase program through Mortgagee Letter 
(ML) 2008-33, permitting mortgagees to originate HECM for Purchase 
transactions. ML 2008-33 was superseded by Mortgage Letter 2009-11, 
which required borrowers to satisfy a monetary investment using cash on 
hand or cash from the sale or liquidation of the mortgagor's assets, or 
certain additional funding sources defined in HUD Handbook 4155.1 REV-
5, section 2-10.
    FHA through ML 2009-11, however, prohibited certain funding sources 
for the borrower's required monetary investment. Specifically, 
borrowers were prohibited from satisfying the monetary investment 
requirement using sweat equity, trade equity, rent credit, or cash or 
its equivalent, in whole or in part, received from the seller or any 
other person or entity that financially benefits from the HECM for 
Purchase transaction, or any third party or entity that is reimbursed, 
directly or indirectly, by the seller or any other person or entity 
that financially benefits from the HECM for Purchase transaction. 
Additionally, ML 2009-11 prohibited seller contributions, also known as 
seller concessions, in any HECM for Purchase transaction. Seller 
concessions were defined as the use of loan discount points, interest 
rate buy-downs, closing cost down payment assistance, builder 
incentives, gifts or personal property given by the seller, or any 
other party involved in the transaction. These limitations on funding 
sources and interested party contributions redirected expenses 
customarily paid by the seller or other interested parties to the HECM 
for Purchase borrower.
    On January 19, 2017, FHA codified the requirements for the HECM for 
Purchase program, and other program changes, in the ``Federal Housing 
Administration (FHA): Strengthening the Home Equity Conversion Mortgage 
Program'' Final Rule (82 FR 7094) (``the final rule'') amending 24 CFR 
part 206. The final rule changed the funding source restrictions from 
ML 2009-11, to permit interested party contributions to pay fees 
required to be paid by the seller under state or local law, for fees 
that are customarily paid by a seller in the locality of the subject 
property, and for purchase of the Home Warranty policy by the seller 
(24 CFR 206.44(c)(1)).
    FHA also codified three permitted funding sources for the 
borrower's required monetary investment: cash on hand, cash from the 
sale or liquidation of the borrower's assets, and HECM proceeds. The 
final rule codified regulatory provisions that grant the Commissioner 
the authority to permit additional funding sources and interested party 
contributions through future notice in the Federal Register, 24 CFR 
206.44(b)(4) and (c)(2), respectively. Based on the foregoing 
regulatory authority, FHA is issuing this notice to permit additional 
funding sources and interested party contributions in HECM for Purchase 
transactions.

II. This Notice

    HECM for Purchase requires Borrowers to contribute substantial 
liquid assets to meet the negotiated contract sales price for the 
property plus standard origination fees and charges. By expanding the 
list of permitted interested party contributions, FHA is more closely 
aligning its HECM interested party contribution policies with FHA's 
forward mortgage programs, while meaningfully increasing the sources of 
funds available for HECM borrowers to satisfy their capital 
requirements to originate a HECM for Purchase.
    For example, a borrower purchasing a property in the state of 
Arizona with a HECM for Purchase, where:
     Contract sales price is $491,974.00;
     Borrower's Closing Costs are $20,300.00;
     Appraised Value is $492,000.00; and
     Principal Limit is $189, 902.00 (maximum proceeds 
available to borrower from the HECM).
    Under current policy, the total amount of cash due from the 
borrower at closing to complete this transaction is $322,372 ($491,974 
plus $20,300 minus $189,902). Under the proposed notice, interested 
parties could contribute up to 6 percent of the sales price, or 
$29,518.44, toward the borrower's monetary requirements, reducing the 
total amount due from the borrower at closing from $322,372 to 
$292,853.56.
    Therefore, pursuant to the Commissioner's authority under 24 CFR 
206.44(b)(4) and 206.44(c)(2), HUD is, through this notice, informing 
the public and program participants of changes to the FHA's HECM 
program, which HUD intends to make effective in a future update to 
HUD's Single Family Housing Policy Handbook.
    For the HECM for Purchase program, FHA will permit the use of an 
``interested party contribution,'' up to six percent of the sales 
price. ``Interested party contribution'' will be defined as a payment 
by an interested party \1\ or combination of parties, toward the 
borrower's origination fees, other closing costs including any items 
paid outside of closing, prepaid items, and discount points. The six 
percent limit may be applied towards but may not exceed the cost of: 
origination fees; other closing costs paid outside of closing, such as 
a credit report and appraisal; prepaid items; discount points; 
interested party payment for permanent and temporary interest rate 
buydowns; and payment of the initial mortgage insurance premium.
---------------------------------------------------------------------------

    \1\ ``Interested Parties'' refer to sellers, real estate agents, 
builders, developers, Mortgagees, Third-Party Originators, or other 
parties with an interest in the transaction.
---------------------------------------------------------------------------

    Through this notice, FHA will permit additional funding sources 
that may be used to satisfy the borrower's monetary investment 
including premium pricing; \2\ gifts; disaster relief grants; and 
employer assistance. These permitted sources are in addition to cash on 
hand, cash from the sale or liquidation of the borrower's assets, and 
HECM proceeds that are already permitted by regulation.
---------------------------------------------------------------------------

    \2\ ``Premium Pricing'' refers to the aggregate credits from a 
mortgagee or third-party originator at the interest rate chosen.
---------------------------------------------------------------------------

    Premium pricing credits from the mortgagee or third-party 
originator will be excluded from the six percent interested party 
contribution limit, provided the mortgagee or third-party originator is 
not the seller, real estate agent, builder, or developer. Fees required 
to be paid by a seller under state or local law or customarily paid by 
a seller in the subject property locality, including real estate agent 
commissions or fees, and the purchase of the Home Warranty policy by 
the seller are already permitted under Sec.  206.44(c)(1) \3\ and will 
be excluded from the six percent interested party contribution limit. 
Further, as with FHA's policy for forward-mortgages, FHA will exclude 
the satisfaction of a Property Assessed Clean Energy (``PACE'') lien or 
obligation against the property by the property seller from the 
definition of an interested party contribution in the HECM for Purchase 
program.
---------------------------------------------------------------------------

    \3\ 24 CFR 206.44(c)(1) permits interested party contributions 
that are defined as fees required to be paid by a seller under state 
or local law, fees customarily paid by a seller in the subject 
property locality, or the purchase of the Home Warranty policy by 
the seller.
---------------------------------------------------------------------------

    This document seeks comment from interested members of the public 
on this document generally, and on the issues

[[Page 73042]]

discussed previously in this notice. HUD will carefully consider the 
public comments received through this solicitation as part of a future 
---------------------------------------------------------------------------
policy update.

Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2023-23429 Filed 10-23-23; 8:45 am]
BILLING CODE 4210-67-P
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