HUD recently published a proposed rule in the Federal Register which would amend current regulations covering the contract rights and obligations of mortgagees participating in Federal Housing Administration’s (FHA) multifamily mortgage insurance programs, to address reimbursement to FHA of excess claim proceeds. Typically when a mortgagee finances mortgages through the issuance and sale of bonds or through bond anticipation notes, the mortgagee uses the FHA insurance claim funds to pay off the remaining bond debts. At times, the amount paid by the FHA insurance claim is greater than the remaining bond debts. This proposed rule would require mortgagees to return to FHA the excess bond funds that remain after FHA’s payment is used to satisfy the bonds. HUD currently requires similar payments of excess bond funds of public housing agencies (PHAs), so the agency claims the proposed rule would provide consistency in the administration of HUD’s bond financing programs.
Public comments on the proposed rule are due by September 9, 2013 and should be submitted electronically through the Federal eRulemaking Portal at www.regulations.gov or by mail to:
Office of General Counsel, Regulations Division
Department of Housing and Urban Development
451 7th Street SW., Room 10276
Washington, DC 20410-0500