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HUD/OH | RIN: 2502-AG95 | Publication ID: Fall 1998 |
Title: Strengthening the Title I Property Improvement Loan Insurance Program (FR-4246) | |
Abstract: This rule proposes to amend HUD's regulations for the title I Property Improvement Loan Insurance Program. This rule would require that at least some of the loan proceeds must be used for correcting code violations, health and safety defects accessibility improvements, or energy improvements. This rule would also require the lender to certify that no party that is debarred or subject to a limited denial of participation will be involved in connection with the loan; that the property has been inspected and the proposed work meets the eligibility requirements; and that a post-completion inspection and verification of completion of the work has occurred. This rule would also establish time limits for completing improvements and streamline requirements, where appropriate. HUD anticipates that this rule will be finalized in conjunction with FR-3718. | |
Agency: Department of Housing and Urban Development(HUD) | Priority: Other Significant |
RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Proposed Rule Stage |
Major: No | Unfunded Mandates: No |
CFR Citation: 24 CFR 201 | |
Legal Authority: 12 USC 1703 42 USC 1436a 42 USC 3535(d) |
Statement of Need: This rule will propose changes to the title I Property Improvement Loan Program necessary to reflect the market and economic changes in home improvement lending in this country. With regard to the market, many new conventional no-equity or low-equity loan products have been introduced in the last few years. Economically, the Department wants to reduce fraud and abuse in the program to mitigate the financial impact on the FHA Insurance Fund. In addition, changes are needed to ensure that use of the program complies with the Congressional intent of the program. |
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Summary of the Legal Basis: Title I of the National Housing Act, as amended. |
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Alternatives: There has been too much abuse and fraud in the existing program to leave the current rules unchanged. Insufficient information is available to judge the merits and disadvantages of terminating the whole program. |
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Anticipated Costs and Benefits: Lenders will incur some minor additional costs for additional documentation and review of borrower and contractor performance. However, the benefits of the reduced defaults that are projected should offset these additional costs. A program with less fraud and abuse should attract additional lenders to the program making the program more readily available to borrowers. |
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Risks: Some existing lenders have already decided to reduce their participation in the current program by focusing on alternative loan products. These changes could accelerate this situation and reduce the availability of title I loans in some markets. |
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Timetable:
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Regulatory Flexibility Analysis Required: No | Government Levels Affected: None |
Included in the Regulatory Plan: Yes | |
Agency Contact: Margaret Burns Director, Office of Single Family Program Development Department of Housing and Urban Development Office of Housing 451 7th Street SW., Washington, DC 20410-0001 Phone:202 402-2121 |