November 21, 2001

Mr. Richard A. Hauser
General Counsel
Department of Housing and Urban Development
451 Seventh Street, SW
Washington, D.C. 20410

Dear Mr. Hauser:

     On August 27, 2001 the Department of Housing and Urban Development (HUD) submitted a draft proposed rule for Office of Management and Budget (OMB) review under Executive Order No. 12866. This rule, titled "Public Housing Capital Fund Program," would govern the use of capital assistance by public housing agencies. It complements a final rule published last year that established the formula under which funding is allocated.

     As we have discussed with your staff, this proposed rule should be consistent with Administration policy regarding funding for public housing that is currently being developed as part of the President's 2003 Budget. Since collaborative work by OMB and HUD policy and budget officials will be occurring over the next several weeks, all changes that should be incorporated into this draft regulation cannot be fully identified at this time.

     Since this rulemaking can only proceed in conjunction with decisions being made on the President's 2003 Budget, I am returning this rule for your reconsideration. OMB staff is available for further discussion. We look forward to working with you on this matter and anticipate an expeditious review of a revised draft rule upon its resubmission



John D. Graham
Office of Information and Regulatory Affairs