Director, Office of Single Family Asset Management

2502-AJ50 201910 The Regulatory Plan and the Unified Agenda of Federal Regulatory and Deregulatory Actions 2502 Office of Housing OH 2500 Department of Housing and Urban Development HUD Mortgage Insurance for Mortgage Transactions Involving Downpayment Assistance Programs (FR-6150)

The Housing and Economic Recovery Act of 2008 (HERA) amended the National Housing Act to add a prohibited sources clause, under section 203(b)(9)(C). This requirement prohibits any portion of a borrower’s the minimum cash investment, as required by section 203(b)(9)(A) from being provided by: (i) the seller or any other person or entity that financially benefits from the transaction, or (ii) any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i). While section 203(b)(9) prohibits assistance from a seller involved in the transaction, FHA continues to receive questions regarding the prohibition on persons or entities that may financially benefit from the transaction. In particular, FHA has received questions regarding whether downpayment assistance programs operated by government entities are being operated in a fashion that would render such assistance prohibited. This rule would establish through rulemaking the circumstances in which governmental entities are deriving a prohibited financial benefit.

]]> Other Significant Previously Published in The Unified Agenda Proposed Rule Stage No No Other 24 CFR 203 12 U.S.C. 1709 42 U.S.C. 3535(d) Yes

The rule is needed to ensure that governmental entities are acting consistent with the National Housing Act and are not accruing financial benefits. Obtaining financial benefit other than recouping costs from operating a downpayment assistance program would violate the statute and increase risk to the insurance fund.

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This rule would resolve continuing issues with downpayment assistance (DPA) programs when HUD mortgage insurance is involved, by defining what types of DPA programs comply with statute.

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None

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HUD expects that the neither the total economic costs nor the total efficiency gains will exceed $100 million.

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There is a risk that entities may be more reluctant to provide downpayment assistance. However, since most the cost of compliance with the rule is low, this is viewed as an extremely small risk.

]]> NPRM 01/00/2020 No No Local State No No No No Elissa Saunders Director, Office of Single Family Asset Management 2502 Office of Housing OH 202 402-2378 100 South Charles Street , 11th Floor, Baltimore MD 21201