Waiver of Regulations Issued by HUD: Restatement of Policy, 63959-63962 [2024-17034]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 89, Number 151 (Tuesday, August 6, 2024)]
[Notices]
[Pages 63959-63962]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17034]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6461-N-01]


Waiver of Regulations Issued by HUD: Restatement of Policy

AGENCY: Office of the Secretary, Department of Housing and Urban 
Development (HUD).

ACTION: Notice of statement of policy.

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SUMMARY: This notice reiterates HUD's statement of policy concerning 
the procedures that govern the waiver of regulations and directives 
issued by HUD. This policy was first announced by notice published in 
1991, following enactment of the Department of Housing and Urban 
Development Reform Act of 1989. In 2001, HUD published a notice that 
clarified how these procedures are implemented during a period of 
Administration transition. In 2008, HUD published a notice 
consolidating and updating the 1991 and 2001 notices. This notice 
updates information to reflect current HUD operations and procedures.

DATES: Applicable date July 29, 2024.

FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Associate General 
Counsel for Legislation and Regulations, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
10282, Washington, DC 20410, telephone number 202-708-1793 (this is not 
a toll-free number). 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

    Section 106 of the Department of Housing and Urban Development 
Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989) added 
a new section 7(q) to the Department of Housing and Urban Development 
Act. (See 42 U.S.C. 3535(q).) This provision specifies that all waivers 
of HUD regulations:
     Must be in writing and indicate the grounds for granting 
the waiver;
     May be delegated by the Secretary only to an individual of 
Assistant Secretary or equivalent rank, who is authorized to issue the 
regulation to be waived; and
     Must provide notification to the public through a notice 
published at least quarterly in the Federal Register. (See 42 U.S.C. 
3535(q)(1) through (3).)
    Section 7(q) also provides that any waiver of a provision of a HUD 
handbook (which is included in HUD's definition of ``directive'') must 
be in writing, specify the grounds for the waiver, and be indexed and 
made available for public inspection for a period of 3 years. (See 42 
U.S.C. 3535(q)(4).) Section 7(q) contains only procedural requirements 
with respect to waivers of regulations and handbooks. These include 
requirements governing the form and content of a waiver, who may grant 
the waiver, and public notification of the waiver. Section 7(q) made no 
change in the substantive grounds upon which, or the circumstances in 
which, HUD may grant a waiver.

II. Statement of Policy on Waiver of Regulations and Directives

    This statement sets forth HUD's policy and procedures governing the 
waivers of HUD regulations and directives. These procedures are 
consistent with the requirements of section 7(q) of the Department of 
Housing and Urban Development Act, as added by section 106 of the 
Department of Housing and Urban Development Reform Act of 1989 (42 
U.S.C. 3535(q)). HUD's regulation at 24 CFR 5.110 also sets forth HUD's 
obligation to comply with the waiver requirements of 42 U.S.C. 3535(q). 
This policy was first announced by notice

[[Page 63960]]

published in 1991 (April 22, 1991, 56 FR 16337), following enactment of 
the Department of Housing and Urban Development Reform Act of 1989. In 
2001 (March 8, 2001, 66 FR 13944), HUD published a notice that 
clarified how these procedures are implemented during a period of 
Administration transition. In 2008 (December 17, 2008, 73 FR 76674), 
HUD published a notice consolidating and updating the 1991 and 2001 
notices. This notice updates information to reflect current HUD 
operations and procedures. These operations and procedures apply during 
periods of Administration transition and non-transition periods.

A. Definitions as Used in This Statement of Policy

    Assistant Secretary means an Assistant Secretary of the Department 
under section 4(a) of the Department of Housing and Urban Development 
Act (42 U.S.C. 3533(a)), or an individual of equivalent rank (as such 
term is defined in this section).
    Department or HUD means the United States Department of Housing and 
Urban Development.
    Deputy Secretary means the Deputy Secretary of Housing and Urban 
Development.
    HUD Act means the Department of Housing and Urban Development Act 
(42 U.S.C. 3531 et seq.).
    Directive means a handbook (including a change or supplement), 
notice, and any other issuance that HUD may classify as a directive.
    Individual of equivalent rank means an individual with rank 
equivalent to an Assistant Secretary, such as the General Counsel, the 
Chief Financial Officer, the Inspector General, and the President of 
the Government National Mortgage Association, or the highest-ranking 
individual administering a HUD program office pursuant to the office's 
Order of Succession, written Delegation of Authority, or designation.
    Regulation means:
     Any material contained in Title 24, Code of Federal 
Regulations;
     Any notice published in the Federal Register announcing 
the availability of funds (referred to as a notice of funding 
opportunity or NOFO), or the criteria to be used to select recipients 
of the funds, under any program administered by HUD; and
     Any other notice published in the Federal Register that 
establishes program requirements pursuant to a statute that authorizes 
HUD to administer the program by Federal Register publication, pending 
issuance of effective regulations amending Title 24, Code of Federal 
Regulations.
    Secretary means the Secretary of Housing and Urban Development.

B. Waiver of Regulations

    1. Actions Subject to Section 7(q).
    Section 7(q) of the HUD Act only covers waivers of non-statutory 
regulatory requirements. Many HUD regulations reflect statutory 
requirements, and section 7(q) grants no authority to waive statutory 
requirements that may be codified in HUD regulations. Therefore, HUD 
officials must always exercise caution that a waiver of a HUD 
regulation is not a waiver of a statutory requirement.
    Section 7(q), however, is not applicable to HUD regulations that 
contain, within the regulation, the authority to grant an exception to 
the overall requirement stated in the regulation under certain 
specified criteria. This type of regulation was established to provide 
``built-in'' exceptions to the general regulatory requirement, thereby 
allowing the applicable HUD official to act on such exceptions under 
the exception criteria specified without undertaking the more formal 
regulatory waiver process. Examples of this type of regulation can be 
found in the following regulations:
    a. 24 CFR 203.43(c)(2)
    Sec.  203.43 Eligibility of Miscellaneous Type Mortgages
* * * * *
    (c) The Commissioner may insure under this part, without regard to 
any limitation upon eligibility contained in the other provisions of 
this subpart, any mortgage given to refinance an existing mortgage 
insured under the National Housing Act. The refinancing mortgage must 
meet the following special requirements:
* * * * *
    (2) It must have a term which does not exceed the unexpired term of 
the existing mortgage, except that in any case where the Commissioner 
determines that an extension of the term of the mortgage will inure to 
the benefit of the applicable insurance fund, taking into consideration 
the outstanding insurance liability under the existing insured 
mortgage, the term may be extended to the lesser of (i) 30 years or 
(ii) the unexpired term of the existing mortgage, plus 12 years; 
(Emphasis added).
    Section 203.43 specifies the conditions under which the Federal 
Housing Commissioner may grant an exception to the general condition 
that a refinanced mortgage must have a term that does not exceed the 
unexpired term of the existing mortgage.
    b. 24 CFR 201.5
    Sec.  201.5 Waivers
    Waiver of lender's noncompliance. The Secretary may waive a 
lender's noncompliance with any provision of this part, subject to 
statutory limitations, when it is determined that enforcement of the 
regulations would impose an injustice upon a lender which has 
substantially complied with the regulations in good faith and refunded 
or credited any excess charge made, and when such waiver does not 
involve an increase in the Secretary's obligation beyond that which 
would have been involved if the lender was in full compliance with the 
regulations.
    Section 201.5 provides a built-in waiver provision and specifies 
the basis upon which the waiver may be granted.
    2. Form and Content of Waivers. Each waiver of a HUD regulation 
must be in writing and specify the grounds for granting the waiver.
    3. Who May Grant a Waiver? The Secretary is the ultimate repository 
of the authority both to issue and to waive HUD regulations. The Deputy 
Secretary has been delegated concurrent authority with the Secretary to 
issue and waive HUD regulations. The Secretary and the Deputy Secretary 
may delegate each of these powers to HUD Assistant Secretaries or other 
individuals of equivalent rank, as defined in this notice, and as 
provided in this section. Typically, the authority to issue final 
regulations is delegated to an Assistant Secretary or an individual 
with equivalent rank.
    The authority to waive a regulation may not be delegated below the 
Assistant Secretary or equivalent rank (as defined in Section A of this 
Notice). An individual formally authorized to act for the Secretary, 
Deputy Secretary, or an Assistant Secretary, or an individual of 
equivalent rank in that official's absence may exercise the waiver 
authority of that individual. Use of this power is limited to 
situations in which an official is designated as, and is performing the 
duties of, the absent official pursuant to a current, written 
designation or order of succession signed by the appropriate official 
and subject to the limitations of the Federal Vacancies Reform Act of 
1998 (5 U.S.C. 3345 et. seq.), or the Inspector General Act of 1978 (5 
U.S.C. 403(h)) as amended by the Securing Inspector General 
Independence Act of 2022 (Title LII, Subtitle A, of Pub. L. 117-263, 
Sec.  5203). Note: Special issues are raised by the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970, as 
amended (42 U.S.C. 4601 et seq.) (``URA''). The URA statute authorizes 
the Department of Transportation, as the lead agency, to

[[Page 63961]]

issue regulations. (See 42 U.S.C. 4633 and the implementing regulations 
at 49 CFR part 24.) Section 24.7 of the Department of Transportation 
regulations (49 CFR 24.7) authorizes HUD, as a federal funding agency 
to waive certain non-statutory requirements of 49 CFR part 24 subject 
to certain restrictions imposed by the lead agency. Under 49 CFR 24.7, 
HUD may waive any requirement in 49 CFR part 24 that is not required by 
law, if HUD determines that the waiver does not reduce any assistance 
or protection provided to an owner or displaced person under 49 CFR 
part 24. Any request for a waiver shall be justified on a case-by-case 
basis. Accordingly, the authority to issue URA regulations in 49 CFR 
part 24 and the authority to waive regulations in 49 CFR part 24 are in 
different agencies. HUD's position is that the authority to waive 
provisions of 49 CFR part 24 given to HUD in 49 CFR 24.7 is not subject 
to section 7(q) of the HUD Act because section 7(q) addresses only 
regulations that the Secretary has the authority to issue. HUD's 
authority to issue waiver of relocation regulations in title 24 of the 
Code of Federal Regulations that are not required under the URA statute 
remains subject to section 7(q).
    4. Legal Concurrence on Waivers. A proposed waiver of a regulation 
subject to section 7(q) must be concurred on by the General Counsel (or 
the General Counsel's designee with responsibility for the legal area 
involving the waiver), if the waiver would:
    a. Be precedential in effect;
    b. Affect in any way the competitive ``ground rules'' under which 
assistance is distributed to recipients;
    c. Relate to litigation involving HUD or its programs; or
    d. Otherwise present novel decisions or circumstances.
    A proposed waiver that does not meet any of these criteria may be 
granted without the concurrence of the Office of General Counsel.
    5. Concurrence on Waivers of Nondiscrimination Provisions. Any 
proposed waiver of a regulation that prohibits discrimination on the 
basis of race, color, religion, national origin, sex, disability, age, 
or familial status, or that sets forth related affirmative obligations 
subject to section 7(q), must be concurred on by the Assistant 
Secretary for Fair Housing and Equal Opportunity, or the Assistant 
Secretary's designee.
    6. Notification to the Public.
    a. In General. HUD will notify the public of all waivers of 
regulations subject to section 7(q) that are granted by HUD through 
notice published in the Federal Register.
    b. Timing of Notice. Each notice will be published not less 
frequently than quarterly and will provide information on all waivers 
of regulations subject to section 7(q) since the end of the period 
covered by the last Federal Register notice containing all the waivers 
granted during the reporting period.
    c. Content of Notice. The notice will contain the following 
information for each waiver:
    i. An identification of the project or activity that is the subject 
of the regulatory waiver;
    ii. A description of the nature of the requirement that has been 
waived and a specification of the provision involved, including the 
citation to the Code of Federal Regulations (CFR), if the provision is 
codified in the CFR;
    iii. The name and title of the official who granted the waiver;
    iv. A brief description of the grounds for granting the waiver; and
    v. A statement of how more information about the waiver, a copy of 
any request, and the approval of the waiver may be obtained.
    d. Public Inspection of Waivers. A record of each waiver of a HUD 
regulation (including the information specified in Section B.6.c. of 
this notice) is maintained by the office of the HUD official who 
granted the waiver, and will be published in the Federal Register not 
less than quarterly as required by section 7(q)(3). Information about 
specific waivers granted should be directed to the office that granted 
the waiver. General information about the procedures for granting 
waivers of regulations may be obtained from the Regulations Division, 
Office of General Counsel, Department of Housing and Urban Development, 
451 7th Street SW, Room 10276, Washington, DC 20410, telephone number 
202-708-2084 (this is not a toll-free number). 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.

C. Waiver of Directives

    1. Form and Content of Waivers. Each waiver of a provision in a HUD 
directive will be in writing and will specify the grounds for granting 
it.
    2. Who May Grant a Waiver? The HUD officer who is authorized to 
issue a directive may also grant waivers of its provisions. This 
authority may be delegated to any officer or employee in the issuing 
official's organization, as well as to any officer or employee in a HUD 
Field or Regional Office. Any such delegation must be in writing, 
although a published delegation of authority is not necessary to 
delegate the power to waive the provisions of directives.
    3. What May be Waived? This notice applies only to a waiver that is 
intended to provide a benefit to, or to remove an obstacle to 
participation in a HUD program by specific individuals or entities 
outside the Department. Waivers of provisions governing internal HUD 
operations, and any action establishing guidance that applies to all 
individuals or entities that are in similar circumstances, are not 
subject to the waiver requirements of this notice. Issuance of a new 
directive is not a waiver for purposes of this notice.
    HUD officials must be alert and cognizant that waiver of a 
directive provision that restates or summarizes a regulation may 
constitute a regulatory waiver. In determining whether a directive 
provision is to be treated as a regulatory waiver, HUD will consider 
whether the waiver of the directive would also require a regulatory 
waiver. If so, the waiver must meet the regulatory waiver requirements 
set forth in this notice.
    All prohibitions against discrimination on the basis of race, sex, 
color, national origin, religion, handicap, age, or familial status, 
and all related affirmative obligations that are direct derivatives of 
regulations, are considered regulatory prohibitions.
    4. Public Inspection of Waivers. A record of each waiver of a HUD 
directive (including the grounds for granting the waiver) will be made 
available to the public. For more information on where and how this 
information may be inspected, interested members of the public are to 
contact the HUD office that granted the waiver. The record of the 
waiver will be maintained in indexed form for not less than the 3-year 
period beginning on the date the waiver is granted.

III. Findings and Certifications

    Environmental Review. This notice 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. 
Accordingly, under 24 CFR 50.19(c)(1), this notice is categorically 
excluded from environmental review under the National Environmental 
Policy Act of

[[Page 63962]]

1969 (42 U.S.C. 4321). It should be noted that the actual grant of a 
waiver pursuant to this notice may require environmental review. If 
this occurs, the environmental considerations will be assessed at that 
time and in that context.
    Executive Order 13132, Federalism. Executive Order 13132 (entitled 
``Federalism'') prohibits, to the extent practicable and permitted by 
law, an agency from promulgating a regulation that has federalism 
implications and either imposes substantial direct compliance costs on 
state and local governments and is not required by statute, or preempts 
state law, unless the relevant requirements of section 6 of the 
Executive Order are met. The statement of policy sets forth only the 
procedures for granting waivers of regulations and directives, and for 
notifying the public of the waiver. Accordingly, this statement of 
policy does not have federalism implications and does not impose 
substantial direct compliance costs on state and local governments or 
preempt state law within the meaning of the Executive Order.
    Authority: Sections 7(d) and 7(q) of the United States Department 
of Housing and Urban Development Act, 42 U.S.C. 3535(d) and 3535(q).

Damon Smith,
General Counsel.
[FR Doc. 2024-17034 Filed 8-5-24; 8:45 am]
BILLING CODE 4210-67-P