Modernizing the Delivery of Housing Counseling Services, 75497-75502 [2024-20946]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 89, Number 179 (Monday, September 16, 2024)]
[Rules and Regulations]
[Pages 75497-75502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20946]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 214

[Docket No. FR-6388-F-02]
RIN 2502-AJ70


Modernizing the Delivery of Housing Counseling Services

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

ACTION: Final rule.

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SUMMARY: The Department of Housing and Urban Development (HUD) is 
issuing this final rule to update HUD's regulations that require 
participating agencies to provide in-person counseling to clients that 
prefer this format to reflect advances in technology, align with client 
engagement preferences, and preserve consumer protections. The final 
rule amends HUD's regulations to allow housing counseling agencies to 
use alternative communication methods, including virtual meeting tools, 
in lieu of providing in-person services. Participating agencies that 
choose not to provide in-person services are required to refer clients 
to local providers that provide such services, when requested. After 
considering public comments received in response to the proposed rule 
HUD published on October 25, 2023, this final rule adopts the proposed 
rule without change.

DATES: Effective October 16, 2024.

FOR FURTHER INFORMATION CONTACT: David Valdez, Senior Housing Program 
Specialist, Department of Housing and Urban Development, 1331 Lamar St. 
Suite 550, Houston, TX 77002, telephone 713-718-3178 (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 Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x) (Section 106) authorizes HUD's Housing Counseling program 
(see Sections 106(a)(1)(iii) and 106(a)(2)). On October 25, 2023, HUD 
published the ``Modernizing the Delivery of Housing Counseling 
Services'' proposed rule (``the proposed rule'') in the Federal 
Register, at 88 FR 73298, to revise the current regulations governing 
HUD's Housing Counseling program to align with client engagement 
preferences, and to preserve consumer protections, while leaving in 
place existing guardrails that ensure participating agencies 
demonstrate knowledge and a connection to the community they serve, 
whether they choose to do so by providing virtual, in-person, or hybrid 
services.
    As described in the proposed rule, on September 28, 2007, HUD 
published a final rule titled, ``Housing Counseling Program,'' at 72 FR 
55637, which established regulations for HUD's Housing Counseling 
program (see 24 CFR 214.103(l) and 24 CFR 214.300, in particular). 
These regulations had not been amended since they were established. 
Section 214.300(a)(3) required agencies that provide housing counseling 
services to provide in-person counseling services at one of the 
agency's facilities or an alternate location to clients that preferred 
that format. When this requirement was adopted, housing counseling and 
education were primarily conducted in-person and the conventional 
wisdom was that in-person service was the most effective service 
delivery method. However, alternatives to in-person service have also 
proven to be effective.
    In 2020, due to ongoing public health concerns around the spread of 
Coronavirus Disease 2019 (COVID-19), HUD issued a Temporary Partial 
Waiver of 24 CFR 214.300(a)(3), In-Person Housing Counseling 
Requirement, that allowed housing counseling agencies to utilize 
alternative methods to conduct housing counseling and education with 
clients in lieu of meeting in-person. Feedback received regarding this 
waiver indicated that these alternative methods were more practical, 
cost-effective, and accessible, and did not lead to adverse compliance 
issues or negative financial impacts. This feedback, increased consumer 
preference for virtual service delivery, and reduced burdens and costs 
for participating agencies, all weigh in favor of modernizing the 
current regulations.
    HUD's proposed rule, then, proposed amending the regulations such 
that participating agencies must maintain at least one facility and may 
provide remote housing counseling. Additional details about the 
proposed rule may be found at 88 FR 73298 (October 25, 2023).

II. Final Rule

    This final rule adopts the proposed rule without change. This rule 
will help reduce the costs of providing housing counseling by allowing 
participating agencies to provide housing counseling services at a 
facility or at an alternate location, via telephone, or via 
collaborative online software. All facilities must have an identified, 
private space available for the provision of counseling services, 
whether those services are in-person or virtual, and housing counseling 
agencies that do not provide in-person counseling services must refer 
clients to agencies that provide in-person counseling services upon a 
client's request. This rule does not change the requirements that every 
housing counseling agency must continue to meet for HUD approval as a 
counseling agency, regardless of the setting or format of housing 
counseling services, including having functioned for at least one year 
in the geographical area(s) the agency identified in its housing 
counseling work plan, having sufficient resources to implement that 
proposed work plan, and being able to demonstrate knowledge of local 
housing markets and community resources.

III. The Public Comments

    HUD received 33 public comments on the proposed rule from various 
interested parties, including housing finance companies, housing 
counseling service agencies (including HUD-approved agencies), housing 
counselors, state housing agency associations, community development 
and other nonprofit organizations, and other individuals and entities.

Support for the Rule

    Most commenters supported HUD's proposal and supported providing 
individuals with options for different formats and types of housing 
counseling services, including telephonic and online services. Some 
commenters cited general benefits such as increased

[[Page 75498]]

flexibility and convenience, and reduced costs, for clients, consumers, 
those providing services such as housing counseling agencies and social 
workers, and landlords.
    Some commenters focused on benefits that the shift to virtual and 
other housing counseling service formats has already provided. Some 
commenters stated that, as shown during the COVID-19 pandemic, the 
temporary partial waiver (TPW) of in-person housing counseling 
requirements and the use of virtual services was not only implementable 
but resulted in benefits such as an increase in the area served and 
number of clients served, more effective use of agency funding, a 
reduction in transportation and scheduling burdens, and the prevention 
of the spread of disease and illnesses. One commenter said that 
reducing costs would permit more Americans to access housing counseling 
services, and that the proposed rule took these costs and benefits into 
account. Another commenter noted that the move to virtual options has 
especially benefited those clients living at or below 80% of the area's 
median income by reducing childcare and transportation needs and costs. 
Some commenters also emphasized that their organizations have been able 
to provide more and more accessible services to rural communities and 
to those with disabilities.
    Some commenters focused on benefits that the rule's changes, if 
implemented, would provide in the future. Some commenters stated that 
HUD's proposed changes would continue to help individuals in rural, 
suburban, and remote areas, particularly those who do not drive or own 
a vehicle. Other commenters stated that other barriers would be 
eliminated, such as social anxiety concerns associated with in-person 
counseling and long lines or wait times.
    Some commenters said that the use of virtual and alternative 
housing counseling methods and a referral system for in-person services 
during the period of the TPW did not create adverse compliance or 
financial impacts. One commenter also stated that there would not be 
future adverse impacts.
    One commenter encouraged HUD to promote access to all types of 
modern resources that assist housing counseling service providers. 
Another commenter stated that the government should respond to consumer 
preferences as communicated through research studies, including 
preferences for more telephonic options.
    One commenter stated that most consumers in the commenter's 
community prefer virtual services and do not want to return to, and do 
not often request, in-person formats. This commenter also explained 
that electronic communication better facilitates good recordkeeping 
practices such as date- and time-stamping client files and documents.
    One commenter agreed with HUD's proposal to leave other 
requirements of the housing counseling program (those not discussed in 
the proposed rule) unchanged.
    HUD Response: HUD appreciates the commenters' support and feedback. 
This final rule aims to modernize the delivery of housing counseling by 
allowing the use of alternative communication methods to reflect 
advances in technology and shifting client engagement preferences. HUD 
agrees with the commenters that virtual or telephonic housing 
counseling increases flexibility, promotes convenience and access, 
responds to consumer preferences, and reduces cost barriers for clients 
and participating agencies. HUD believes that the housing counseling 
service formats provided for in this rulemaking, including telephonic, 
virtual, and collaborative online software, will sufficiently modernize 
a participating agency's delivery of housing counseling services and 
related recordkeeping practices.
    HUD also agrees with commenters who state that this final rule 
creates the opportunity to broaden the reach of housing counseling. HUD 
recognizes that difficulties for many groups may include the distance 
and cost of travel to the nearest housing counseling agency, a lack of 
available transportation, or scheduling issues. Allowing for 
alternative methods of housing counseling will increase access to 
services for those groups of individuals mentioned by the commenters, 
including individuals with disabilities that may experience difficulty 
traveling, and those residing in rural areas that may face similar 
difficulties.
    HUD agrees with the commenters that state there are already proven 
benefits to this change and continued positive outcomes are likely. As 
some commenters indicated, HUD allowed for a temporary partial waiver 
of the in-person housing counseling requirement during the COVID-19 
pandemic. During the pandemic, agencies adapted to alternative methods 
of service delivery that HUD determined were more practical, cost-
effective, accessible, and without adverse compliance issues or 
negative financial impacts.

Opposition to the Rule

    One commenter opposed HUD's proposal. This commenter stated that 
persons seeking housing counseling are more likely than others to not 
have the ability to negotiate financing and real estate on their own, 
and online or remote interactions may increase barriers for those most 
at risk and in the most need.
    HUD Response: HUD believes that barriers to housing counseling 
should be eliminated and HUD will continue to review options that 
reduce barriers to housing counseling. Research shows that the impact 
of in-person services is no different from the impact of remote 
services.\1\ HUD continues to support in-person services to address 
each client's unique situation. Increasing access to alternative 
methods of counseling does not diminish the importance of in-person 
counseling. Rather, it promotes choice in how a client meets their 
housing goal or addresses their housing problem. HUD's revised 
regulations promote choice between virtual and in-person services by 
allowing all participating agencies to offer virtual and remote 
services, but this does not preclude participating agencies from 
offering in-person services. Additionally, any client seeking in-person 
housing counseling may express this preference at any time, and, if the 
participating agency does not provide in-person services, it must help 
ensure that that client's preference is fulfilled by referring the 
client to a participating agency that does provide in-person services.
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    \1\ https://www.huduser.gov/portal//portal/sites/default/files/pdf/Long-Term-Impact-Report-HUD-First-Time-Homebuyer-Education-Counseling-Demonstration.pdf at pgs. 64-65. This report was 
conducted by Abt Associates in partnership with participating 
lenders and housing counseling agencies.
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Comments About ``Guardrails To Mitigate Risks''

    Some commenters supported HUD's proposal to include ``safeguards'' 
or ``guardrails'' such as requiring participating agencies to have at 
least one year of experience in their chosen geographic area and 
ensuring that housing counselors understand local housing programs. A 
commenter stated that, regardless of the form or mode through which 
housing counseling services are provided, these safeguards are 
essential to ensure that such services continue to be efficient.
    One commenter requested clarification of the requirement for 
housing counselors to have functioned for at least a year in the 
geographical area set forth in the work plan. The

[[Page 75499]]

commenter suggested that virtual work should count toward this 
requirement and that this not be limited to having maintained a 
facility within the geographical area. Specifically, the commenter 
suggested that virtual work as provided under a contract with a housing 
market participant, such as a state agency or national non-profit 
working within the geographic area, should be evidence of such a 
working relationship.
    One commenter said that, as drafted, the proposed rule's guardrails 
may pose barriers to a housing counseling agency's ability to hire 
qualified staff who may not be from the area. The commenter suggested 
that HUD change its regulatory requirements to capture the following: 
``Housing Counselors must possess knowledge, or be able to attain 
knowledge, of the local housing market, establish working relationships 
with private and public community resources, demonstrating that the 
agency maintains a sufficient community base.''
    HUD Response: HUD agrees with the commenters that support the 
guardrails in place. The regulations will continue to require 
participating agencies to have functioned for at least a year in the 
geographic area set forth in their work plan (see 24 CFR 214.103(d)), 
and housing counseling staff to possess a working knowledge of HUD's 
housing and single-family mortgage insurance programs, other state and 
local housing programs available in the community, consolidated plans, 
and the local housing market (see 24 CFR 214.103(h)). This experience 
and knowledge may be acquired through virtual or in-person work in the 
geographic area. These provisions ensure that participating agencies 
demonstrate knowledge and a connection to the community they serve, 
whether they choose to do so by providing virtual, in-person, or hybrid 
services.
    HUD recognizes that hiring qualified housing counseling staff may 
be challenging at times; however, HUD does not believe that the 
guardrails contribute to this challenge. Instead, promoting the choice 
to deliver counseling services via alternative methods may expand 
hiring opportunities by eliminating the barrier that physical presence 
in a geographical area may pose. Housing Counseling Agencies may also 
gain experience and knowledge of community resources via the use of 
software that connects counselors with local resources and aids in 
connecting clients to social service providers or programs in their 
area.

Comments Requesting Clarification of ``Collaborative Online Software''

    One commenter requested that HUD clarify the meaning of 
``collaborative online software,'' as the meaning was not clear in the 
proposed rule, and that HUD provide examples of which online software 
is sufficient and has the necessary security in place.
    HUD Response: HUD appreciates the opportunity to further clarify 
the term ``collaborative online software'' as mentioned in the proposed 
rule. This term encompasses a range of virtual meeting tools designed 
to support collaboration and communication between the counselor and 
client. Specifically, these tools offer functions such as real-time 
messaging (chat), video conferencing, and the ability to share and 
collaborate on documents. Examples of such software include platforms 
like Zoom, Microsoft Teams, and Google Workspace.
    Regardless of the collaborative online software chosen, program 
participants must continue to follow HUD's client confidentiality and 
privacy standards. HUD's regulations at 24 CFR 214.315 require that all 
information remains secure and private, no matter the method of service 
delivery. HUD encourages all participating agencies to conduct thorough 
due diligence when selecting any software to ensure it complies with 
all applicable security requirements and privacy laws, thereby 
safeguarding the integrity of client information and interactions.

Comments Expressing Concern That The Rule Will Result in the 
Unavailability of In-Person Housing Counseling for Clients Who Need or 
Prefer That Format of Service Provision

    Some commenters emphasized that HUD's regulations still need to be 
inclusive of those who need or would prefer in-person services. Some 
commenters stated that this flexibility is particularly important for 
the elderly, disabled persons, persons living on Native Lands, those 
who cannot access or use technology, and those who do not want to 
discuss the required information in a distanced, virtual format.
    Some commenters stated that the proposed rule already attempts to 
address these concerns by requiring participating agencies that choose 
not to provide in-person services to refer clients to local providers 
that do provide such services, when requested. One commenter stated 
that, even with this provision, there must be mechanisms in place to 
ensure there are enough providers who provide in-person housing 
counseling to meet any demand or need. Additionally, the commenter 
stated that participating housing counseling agencies should provide 
information about in-person and virtual housing counseling service 
options before any such services have commenced, in addition to when 
in-person services are requested, to provide consumers with more 
control in how they receive housing counseling services.
    One commenter asserted that HUD's proposal lacks any requirements 
meant to address those with accessibility needs and older adults, which 
may result in additional barriers for these vulnerable populations when 
they seek out housing counseling services and ultimately prevent them 
from benefitting from proposed changes.
    HUD Response: HUD's housing counseling program recognizes the 
importance of continuing to serve those clients who need or prefer in-
person services, including individuals who belong to the groups 
identified by commenters and others who lack sufficient access to the 
necessary technology. The updated regulations do not preclude 
participating agencies from continuing to maintain a physical presence 
in the communities they serve and, if an agency is unable to serve the 
client in the format the client prefers or requires, the agency must, 
upon the client's request, refer the client to another participating 
agency.
    The proposed rule amended the text of 24 CFR 214.300 to remind 
participating agencies that telephonic and collaborative online 
software, and any other form of counseling, must be accessible for 
persons with disabilities in accordance with section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), 24 CFR parts 8 and 9, and 
the Americans with Disabilities Act (42 U.S.C. 12101 et seq.). 
Additionally, under HUD's existing regulations at 24 CFR 214.103(l)(3), 
which HUD is not substantively changing through this rulemaking, all 
housing counseling facilities of the HUD-approved agency and its 
branches, affiliates, and subgrantees must provide accessibility 
features or make alternate accommodations for persons with 
disabilities, in accordance with section 504 of the Rehabilitation Act 
of 1973 (29 U.S.C. 794), 24 CFR parts 8 and 9, and the Americans with 
Disabilities Act (42 U.S.C. 12101 et seq.). 24 CFR 214.103(l)(3). This 
includes the requirement that a participating agency must ensure 
effective communication with individuals with disabilities, including 
through the provision of appropriate auxiliary aids and services,

[[Page 75500]]

regardless of whether it provides in-person or alternative format 
counseling services.

Comments About HUD Grants for Technology and Program Purchases

    One commenter strongly urged HUD to consider allowing the use of 
HUD grants for technology and program purchases to further assist 
housing counseling agencies. This may include, but is not limited to, 
purchases of internet hotspots and/or devices to enhance access to 
areas without reliable internet and/or cellphone coverage.
    HUD Response: The commenter's point is beyond the scope of this 
rulemaking; however, HUD's housing counseling program recognizes the 
importance of technology and internet access in an increasingly hybrid 
and virtual office environment. Pursuant to the annual Grant Agreement 
and Uniform Guidance, HUD already allows reimbursement for technology 
purchases.

Comments About Online Services To Locate Housing Counseling Facilities

    One commenter stated that the online services at hud.gov that 
assist users in locating nearby housing counseling facilities did not 
work.
    HUD Response: HUD publishes information about its housing 
counseling program and how to locate a housing counseling agency in an 
individual's locale on the HUD website https://www.hud.gov/counseling 
and the Consumer Financial Protection Bureau's website https://www.consumerfinance.gov/find-a-housing-counselor/. If telephonic 
communication is preferred, please call 800-569-4287 (202-708-1455 
TTY).

Comments Requesting New Requirements To Address Limited English 
Proficiency Concerns

    One commenter emphasized the need to ensure that HUD's proposed 
changes do not inadvertently create barriers for low- and moderate-
income Asian American, Native Hawaiian, and Pacific Islander 
individuals with limited English proficiency (LEP). The commenter 
recommended that HUD incorporate new provisions through this rulemaking 
that would help reduce language barriers. For example, the commenter 
suggested that HUD require that alternative communication meeting tools 
and methods be equipped with multilingual capabilities; that HUD ensure 
that housing counseling agencies are adequately resourced to hire and 
train linguistically capable and culturally competent housing 
counselors; that HUD ensure that compensation structures account for 
the added workload in LEP cases; and that HUD ensure the establishment 
of robust referral mechanisms that would account for LEP needs in the 
referral process.
    This commenter also urged HUD to consider how to collect 
disaggregated race and ethnicity data to help service providers reach 
certain populations. The commenter suggested using the data collection 
standards recently proposed by the Office of Management and Budget 
(OMB),\2\ but with additional disaggregation whenever possible.
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    \2\ 88 FR 5375, https://www.federalregister.gov/documents/2023/01/27/2023-01635/initial-proposals-for-updating-ombs-race-and-ethnicity-statistical-standards.
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    HUD Response: HUD agrees with the commenter and recognizes the 
importance of serving clients with limited English proficiency 
including Asian Americans, Native Hawaiians, and Pacific Islanders. 
However, many of the commenter's proposed changes are outside the scope 
of this rulemaking, and HUD's existing regulations account for the 
commenter's concerns. HUD Housing Counseling Program regulations 
currently require all participating agencies to maintain ``housing 
counselor(s) who are fluent in the language of the clients they serve, 
or use the services of an interpreter, or must refer the client to an 
agency that can meet their client's needs.'' See 24 CFR 214.103(g)(3). 
HUD is not proposing to amend this regulation through this rulemaking; 
this is an existing requirement. However, HUD is, in this rulemaking, 
emphasizing in new 24 CFR 214.300(a)(4) that regardless of setting or 
format all participating agencies must continue to meet the 
requirements of 24 CFR 214.103(g), as well as 214.103(d) and 
214.103(h). Additionally, Title VI of the Civil Rights Act of 1964 
requires recipients of federal financial assistance to take reasonable 
steps to ensure meaningful access to their programs, services, and 
activities by individuals with LEP. This and other civil rights 
requirements apply to the Housing Counseling program. See 24 CFR 
214.503 and 5.105.
    HUD agrees with the suggestion of using the data collection 
standards recently proposed by the Office of Management and Budget and 
already follows OMB's Statistical Policy Directive No. 15: Standards 
for Maintaining, Collecting, and Presenting Federal Data on Race and 
Ethnicity (89 FR 22182).

Comments Suggesting Structural Changes for Housing Counseling Services

    One commenter suggested that HUD set up counseling service 
locations and counselors for first-time and low-income homebuyers that 
would assist these buyers before closing, to help reduce the complexity 
of issues and the need for housing counselors later in the process. The 
commenter suggested that this counseling include basic home 
maintenance, improvement, and energy management, which would reduce 
costs for new homeowners and reduce the chances of default and 
foreclosure. The commenter also urged HUD to help educate new 
homeowners about how to recognize when they should seek housing 
counseling.
    HUD Response: HUD agrees with the commenter that pre-purchase 
clients benefit from understanding the obligations of homeownership 
after purchase, including basic home maintenance, improvement, and 
energy management. These topics are outside the scope of this 
rulemaking but are approved housing counseling, education, and outreach 
topics that participating agencies may provide to and discuss with 
clients under HUD regulations at 24 CFR 214.300(e) and the HUD Housing 
Counseling Handbook 7610.1--REV 6, under the section titled, ``Approved 
Housing Counseling, Education, and Outreach Topics.''
    HUD also agrees with the commenter that homeowners could benefit 
from resolving or preventing mortgage delinquency and, though this 
topic is also outside the scope of this rulemaking, this topic is an 
approved housing counseling, education, and outreach topic that 
participating agencies may provide to and discuss with clients under 
HUD regulations at 24 CFR 214.300(e) and the HUD Housing Counseling 
Handbook 7610.1--REV 6, under the sections titled ``Non-Delinquency 
Post-Purchase Counseling'' and ``Resolving or Preventing Forward or 
Reverse Mortgage Delinquency or Default.''

Comments Requesting Information About the Housing Counseling Program

    One commenter requested more information about HUD's Housing 
Counseling program.
    HUD Response: HUD publishes information about its housing 
counseling program and how to locate a housing counseling agency in an 
individual's locale on the HUD website https://www.hud.gov/counseling. 
If telephonic communication is preferred,

[[Page 75501]]

please call 800-569-4287 (202-708-1455 TTY).

Comments About HECM Counseling

    One commenter suggested that HUD pursue modernization efforts for 
HECM counseling.
    HUD Response: HECM counseling is outside the scope of this 
rulemaking, but HUD recently clarified, in its HUD Housing Counseling 
Handbook 7610.1 REV.6, that agencies are allowed to provide HECM 
counseling using virtual meeting tools designed to support 
collaboration and communication between the counselor and client.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866, 13563, and 14094

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the Order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned. Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. Executive Order 14094, entitled ``Modernizing 
Regulatory Review'' (hereinafter referred to as the ``Modernizing 
E.O.''), amends section 3(f) of Executive Order 12866 (Regulatory 
Planning and Review), among other things.
    The final rule allows counseling agencies to provide services 
through virtual methods of service delivery and to refer clients who 
prefer in-person counseling to other agencies that offer that service. 
HUD is not changing other requirements, for example the requirement 
that a participating agency demonstrate knowledge of and a connection 
to the community they serve, and the requirement that a participating 
agency comply with state and local laws in each geographic area in 
which the participating agency operates. The final rule was not subject 
to OMB review. The final rule is not a ``significant regulatory 
action'' as defined in Section 3(f) of Executive Order 12866 and is not 
an economically significant regulatory action.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
The changes described in this final rule will modernize the regulations 
governing HUD's Housing Counseling Program to allow housing counseling 
agencies to use alternative communication methods, including virtual 
meeting tools, in lieu of providing in-person services. Participating 
agencies that do not provide in-person services will be required to 
refer clients to local providers that provide such services, when 
requested. The final rule will help reduce the costs of maintaining 
multiple physical locations, shifting the emphasis to demonstrating 
knowledge of the local housing market and community resources and 
whether a housing counseling agency has established a sufficient 
community base to operate in the area covered by its work plan. These 
revisions do not impose a significant economic impact on a substantial 
number of small entities. Therefore, the undersigned certifies that 
this rule will not have a significant impact on a substantial number of 
small entities.

Environmental Impact

    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction; or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
final rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either: (i) imposes substantial direct compliance costs on State and 
local governments and is not required by statute, or (ii) preempts 
State law, unless the agency meets the consultation and funding 
requirements of section 6 of the Executive Order. This final rule 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.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for Federal agencies to 
assess the effects of their regulatory actions on State, local, and 
Tribal governments, and on the private sector. This final rule does not 
impose any Federal mandates on any State, local, or Tribal governments, 
or on the private sector, within the meaning of the UMRA.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520), an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information, unless the 
collection displays a currently valid Office of Management and Budget 
(OMB) control number. The information collection requirements contained 
in this final rule have been approved by OMB under the Paperwork 
Reduction Act and assigned OMB control numbers 2502-0574 and 2502-0614.

List of Subjects in 24 CFR Part 214

    Administrative practice and procedure; Grant programs--housing and 
community development; Loan programs--housing and community 
development; Organization and functions (government agencies); 
Reporting and recordkeeping requirements.

    Accordingly, for the reasons stated in the preamble above, HUD 
amends 24 CFR part 214 as follows:

PART 214--HOUSING COUNSELING PROGRAM

0
1. The authority citation for part 214 continues to read as follows:

    Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 3535(d).


0
2. Revise Sec.  214.103(l) to read as follows:


Sec.  214.103  Approval Criteria.

* * * * *
    (l) Facilities. All participating agencies must maintain at least 
one facility. All facilities must meet the following criteria:
    (1) Have a clearly identified space available for the provision of 
housing counseling services;

[[Page 75502]]

    (2) Provide privacy for counseling services and confidentiality of 
client records; and
    (3) Provide accessibility features or make alternative 
accommodations for persons with disabilities, in accordance with 
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), 24 CFR 
parts 8 and 9, and the Americans with Disabilities Act (42 U.S.C. 12101 
et seq.).
* * * * *

0
3. In Sec.  214.300:
0
a. Revise paragraph (a)(3);
0
b. Redesignate paragraphs (a)(4) through (9) as paragraphs (5) through 
(10) respectively; and
0
c. Add new paragraph (a)(4).
    The revision and addition read as follows:


Sec.  214.300  Counseling Services.

    (a) * * *
    (3) Counseling may take place at the housing counseling agency 
facility or at an alternate location, and may be conducted by 
telephone, or via collaborative online software. Agencies must ensure 
that any telephonic or collaborative online software, or any form of 
counseling, is accessible for persons with disabilities, in accordance 
with section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), 24 
CFR parts 8 and 9, and the Americans with Disabilities Act (42 U.S.C. 
12101 et seq.). All agencies participating in HUD's Housing Counseling 
program must, upon a client's request, refer clients to participating 
agencies that provide in-person counseling services in accordance with 
Sec.  214.303(e).
    (4) Regardless of setting or format, all participating agencies 
must continue to meet the requirements of Sec.  214.103(d), 214.103(g), 
and 214.103(h).
* * * * *

Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2024-20946 Filed 9-13-24; 8:45 am]
BILLING CODE 4210-67-P