24 CFR Part 5, Subpart D - Definitions for Section 8 and Public Housing Assistance Under the United States Housing Act of 1937

HUD's housing counseling program provides housing counseling to consumers seeking information about financing, maintaining, renting, or owning a home. The housing counseling statute was amended to improve the effectiveness of housing counseling in HUD programs by, among other things: establishing the Office of Housing Counseling and giving this office the authority over the establishment, coordination, and administration of all regulations, requirements, standards, and performance measures under programs and laws administered by HUD that relate to housing counseling; requiring that organizations providing housing counseling required under or in connection with HUD programs be approved to participate in the Housing Counseling Program (Housing Counseling Agencies, or HCAs) and have all individuals providing such housing counseling certified by HUD as competent to provide such services; prohibiting the distribution of housing counseling grant funds awarded to agencies participating in HUD's Housing Counseling Program that are found in violation of Federal election laws or that have employees found in violation of Federal election laws; and requiring the reimbursement to HUD of housing counseling grant funds that HUD finds were misused. HUD issued a proposed rule on September 13, 2013, to establish in regulation the statutory changes made to the housing counseling program and solicited public comment. This final rule revises HUD's Housing Counseling Program regulations to adopt the new requirements established in the housing counseling statute. Additionally, this rule amends HUD's general and other program regulations to clarify for grantees the requirement that housing counseling under Other HUD Programs must be provided by HCAs. HUD will issue a separate Federal Register notice to announce the start of the testing and certification process, and entities and individuals providing housing counseling will have 36 months to be approved or certified by the Office of Housing Counseling.

On November 16, 2016, HUD published a final rule implementing in HUD's regulations the requirements of the 2013 reauthorization of the Violence Against Women Act (VAWA). After publication, HUD discovered an incorrect compliance date in the preamble and an incorrect paragraph designation in the regulatory text. The compliance date, with respect to completing an emergency transfer plan and providing emergency transfers, and associated recordkeeping and reporting requirements, was incorrectly listed as May 15, 2017, in the preamble. The regulatory text provided the correct date of June 14, 2017. This document makes the necessary correction to the preamble to reflect the compliance date in the regulatory text of June 14, 2017 and the paragraph designations in the regulatory text.

As the Nation's housing agency, HUD has the unique charge to promote the Federal goal of providing decent housing and a suitable living environment for all. In February 2012, HUD issued a final rule requiring HUD programs to make eligibility determinations for individuals seeking admission to HUD-assisted or -insured housing without regard to sexual orientation, gender identity, or marital status. The 2012 rule did not, however, cover HUD's Native American and Native Hawaiian programs. Through this final rule, HUD revises its Native American and Native Hawaiian program regulations to ensure all eligible individuals and families, regardless of sexual orientation, gender identity, or marital status, have access to these programs. This final rule seeks to provide consistency across HUD programs and restates the Department's commitment that eligibility for admission and continued occupancy in HUD-assisted and -insured housing is not based on sexual orientation, gender identity, or marital status.

This final rule implements in HUD's regulations the requirements of the 2013 reauthorization of the Violence Against Women Act (VAWA), which applies for all victims of domestic violence, dating violence, sexual assault, and stalking, regardless of sex, gender identity, or sexual orientation, and which must be applied consistent with all nondiscrimination and fair housing requirements. The 2013 reauthorization (VAWA 2013) expands housing protections to HUD programs beyond HUD's public housing program and HUD's tenant-based and project-based Section 8 programs (collectively, the Section 8 programs) that were covered by the 2005 reauthorization of the Violence Against Women Act (VAWA 2005). Additionally, the 2013 law provides enhanced protections and options for victims of domestic violence, dating violence, sexual assault, and stalking. Specifically, this rule amends HUD's generally applicable regulations, HUD's regulations for the public housing and Section 8 programs that already pertain to VAWA, and the regulations of programs newly covered by VAWA 2013. In addition to this final rule, HUD is publishing a notice titled the Notice of Occupancy Rights under the Violence Against Women Act (Notice of Occupancy Rights) that certain housing providers must give to tenants and applicants to ensure they are aware of their rights under VAWA and these implementing regulations, a model emergency transfer plan that may be used by housing providers to develop their own emergency transfer plans, a model emergency transfer request form that housing providers could provide to tenants requesting an emergency transfer under these regulations, and a new certification form for documenting incidents of domestic violence, dating violence, sexual assault, and stalking that must be used by housing providers. This rule reflects the statutory changes made by VAWA 2013, as well as HUD's recognition of the importance of providing housing protections and rights to victims of domestic violence, dating violence, sexual assault, and stalking. By increasing opportunities for all individuals to live in safe housing, this will reduce the risk of homelessness and further HUD's mission of utilizing housing to improve quality of life.

Through this final rule, HUD ensures equal access for individuals in accordance with their gender identity in programs and shelter funded under programs administered by HUD's Office of Community Planning and Development (CPD). This rule builds upon HUD's February 2012 final rule entitled “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” (2012 Equal Access Rule), which aimed to ensure that HUD's housing programs would be open to all eligible individuals and families regardless of sexual orientation, gender identity, or marital status. The 2012 Equal Access Rule, however, did not address how transgender and gender non-conforming individuals should be accommodated in temporary, emergency shelters, and other buildings and facilities used for shelter, that have physical limitations or configurations that require and that are permitted to have shared sleeping quarters or shared bathing facilities. This final rule follows HUD's November 2015 proposed rule, which addressed this issue and solicited public comment on measures to ensure that recipients and subrecipients of CPD funding—as well as owners, operators, and managers of shelters and other buildings and facilities and providers of services funded by CPD—grant equal access to such facilities and services to individuals in accordance with an individual's gender identity. This rule amends HUD's definition of “gender identity” to more clearly reflect the difference between actual and perceived gender identity and eliminates the prohibition on inquiries related to sexual orientation or gender identity, so that service providers can ensure compliance with this rule. The removal of the prohibition on inquiries related to sexual orientation or gender identity does not alter the requirement to make housing assisted by HUD and housing insured by the Federal Housing Administration (FHA) available without regard to actual or perceived sexual orientation or gender identity. Lastly, without changing the scope of the requirement to provide equal access without regard to sexual orientation, this rule makes a technical amendment to the definition of “sexual orientation,” which HUD adopted from the Office of Personnel Management's (OPM) definition of the term in 2012, to conform to OPM's current definition. In order to ensure that individuals are aware of their rights to equal access, HUD is publishing elsewhere in this issue of the Federal Register for public comment, in accordance with the Paperwork Reduction Act of 1995, a document entitled “Equal Access Regardless of Sexual Orientation, Gender Identity, or Marital Status” for owners or operators of CPD-funded shelters, housing, facilities, and other buildings to post on bulletin boards and in other public spaces where information is typically made available.

Through this proposed rule, HUD continues its efforts to narrow the digital divide in low-income communities served by HUD by providing, where feasible and with HUD funding, broadband infrastructure to communities in need of such infrastructure. Broadband is the common term used to refer to a very fast connection to the Internet. Such connection is also referred to as high-speed broadband, broadband Internet, or high-speed Internet. In this proposed rule, HUD proposes to require installation of broadband infrastructure at the time of new construction or substantial rehabilitation of multifamily rental housing that is funded or supported by HUD. Installation of broadband infrastructure at the time of new construction or substantial rehabilitation is generally easier and less costly than when such installation is undertaken as a stand-alone effort. The proposed rule, however, recognizes that installation of broadband infrastructure may not be feasible for all new construction or substantial rehabilitation, and, therefore, the proposed rule allows limited exceptions to the installation requirements. Installing unit-based broadband infrastructure in multifamily rental housing that is newly constructed or substantially rehabilitated with or supported by HUD funding will provide a platform for individuals and families residing in such housing to participate in the digital economy, and increase their access to economic opportunities.

The Agencies publishing this final rule amend or establish their regulations to implement Executive Order 13279, as amended by Executive Order 13559. Executive Order 13279 established fundamental principles to guide the policies of Federal agencies regarding the participation of faith-based and other community organizations in programs that the Federal agencies administer. Executive Order 13559 amended Executive Order 13279 to clarify those principles and add certain protections for beneficiaries of Federal social service programs.

The Department of Housing and Urban Development Appropriations Act, 2014 (2014 Appropriations Act), made several changes to the United States Housing Act of 1937 (1937 Act). Section 243 of the 2014 Appropriations Act authorized HUD to implement these changes through notice, followed by notice-and-comment rulemaking. Notices implementing the changes were published on May 19, 2014, and June 25, 2014. HUD issued a proposed rule on January 6, 2015, to codify these changes in regulation. In addition, the January 2015 rule proposed changes to streamline regulatory requirements pertaining to certain elements of the Housing Choice Voucher (HCV), Public Housing (PH), and various multifamily housing (MFH) rental assistance programs; to reduce the administrative burden on public housing agencies (PHAs) and MFH owners; and to align, where feasible, requirements across programs, including the Housing Opportunities for Persons with AIDS (HOPWA) and HOME Investment Partnerships (HOME), which are administered by HUD's Office of Community Planning and Development (CPD). HUD also issued an interim rule on September 8, 2015, implementing changes to flat rents in the Public Housing program made by the Department of Housing and Urban Development Appropriations Act, 2015 (2015 Appropriations Act). This final rule makes changes to the regulatory text as presented in the January 2015 proposed rule, including additional changes in response to public comment as well as further consideration by HUD of changes proposed in January 2015, and finalizes the regulatory changes contained in the September 2015 interim rule.

On December 19, 2014, the Office of Management and Budget (OMB) published a joint, Governmentwide interim rule with all Federal award-making agencies, entitled “Federal Awarding Agency Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” In that rule, all Federal award-making agencies, including HUD, implemented the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. HUD also amended its administrative requirements for grants and cooperative agreements. This final rule conforms HUD's regulations to OMB's rule, revises cross references within affected HUD regulations, and makes other conforming changes and corrections.

As the Nation's housing agency, HUD administers programs designed to meet the goal of ensuring decent housing and a suitable living environment for all. In furtherance of this goal, in February 2012, HUD promulgated a final rule entitled “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” (Equal Access Rule), which requires that HUD-assisted and HUD-insured housing be made available without regard to actual or perceived sexual orientation, gender identity, or marital status, and which generally prohibits inquiries into sexual orientation or gender identity for the purpose of determining eligibility for such housing or otherwise making such housing available. HUD's Equal Access Rule provides a limited exception for inquiries about the sex of an individual to determine eligibility for housing provided or to be provided to the individual when the housing is a temporary, emergency shelter that involves the sharing of sleeping areas or bathrooms, or for inquiries made for the purpose of determining the number of bedrooms to which a household may be entitled. At that time, HUD decided not to set national policy regarding how transgender persons would be accommodated in temporary, emergency shelters that involve shared sleeping quarters or shared bathing facilities, but instead decided to monitor and review its programs to determine if transgender individuals had greater access to temporary, emergency shelters as a result of the rule or if additional guidance or a national policy was warranted. HUD also committed to review the prohibition on inquiries contained in the Equal Access Rule. HUD has now monitored and reviewed its programs and, based on that review, is proposing this rule to require recipients and subrecipients of assistance from HUD's Office of Community Planning and Development (CPD), as well as owners, operators, and managers of shelters, buildings, and other facilities and providers of services covered by CPD's programs, to provide transgender persons and other persons who do not identify with the sex they were assigned at birth with access to programs, benefits, services, and accommodations in accordance with their gender identity. This proposed rule would also amend the definition of “gender identity” included in HUD's Equal Access Rule so the definition more clearly reflects the difference between actual and perceived gender identity. Finally, HUD has completed its review of the inquiries provision, and the proposed rule would eliminate the Equal Access Rule's current prohibition on inquiries related to sexual orientation or gender identity, while maintaining the prohibition against discrimination on those bases.

This rule proposes to revise HUD's regulation that covers the equal participation of faith-based (religious) organizations in HUD Programs, including all of HUD's Native American Programs, as well as several program-specific regulations regarding the equal participation of faith-based organizations. These revisions are being undertaken to implement Executive Order 13559, Fundamental Principles and Policymaking Criteria for Partnerships with Faith-Based and Other Neighborhood Organizations. Executive Order 13559 revised Executive Order 13279, Equal Protection of the Laws for Faith-Based and Community Organizations, which provides the legal basis for HUD's current equal participation regulations. This rule implements changes to Executive Order 13279 made by Executive Order 13559, including changes to specific terminology, additional beneficiary protections, and clarifications on the responsibilities of intermediaries. In addition to proposing regulatory amendments to implement Executive Order 13559, HUD is also publishing for public comment a sample notice of beneficiary protections for use by faith-based organizations.

This document corrects a typographical error in HUD's final rule on Affirmatively Furthering Fair Housing, published on July 16, 2015.

Through this final rule, HUD provides HUD program participants with an approach to more effectively and efficiently incorporate into their planning processes the duty to affirmatively further the purposes and policies of the Fair Housing Act, which is title VIII of the Civil Rights Act of 1968. The Fair Housing Act not only prohibits discrimination but, in conjunction with other statutes, directs HUD's program participants to take significant actions to overcome historic patterns of segregation, achieve truly balanced and integrated living patterns, promote fair housing choice, and foster inclusive communities that are free from discrimination. The approach to affirmatively furthering fair housing carried out by HUD program participants prior to this rule, which involved an analysis of impediments to fair housing choice and a certification that the program participant will affirmatively further fair housing, has not been as effective as originally envisioned. This rule refines the prior approach by replacing the analysis of impediments with a fair housing assessment that should better inform program participants' planning processes with a view toward better aiding HUD program participants to fulfill this statutory obligation. Through this rule, HUD commits to provide states, local governments, public housing agencies (PHAs), the communities they serve, and the general public, to the fullest extent possible, with local and regional data on integrated and segregated living patterns, racially or ethnically concentrated areas of poverty, the location of certain publicly supported housing, access to opportunity afforded by key community assets, and disproportionate housing needs based on classes protected by the Fair Housing Act. Through the availability of such data and available local data and knowledge, the approach provided by this rule is intended to make program participants better able to evaluate their present environment to assess fair housing issues such as segregation, conditions that restrict fair housing choice, and disparities in access to housing and opportunity, identify the factors that primarily contribute to the creation or perpetuation of fair housing issues, and establish fair housing priorities and goals.

This proposed rule would amend HUD's regulations to fully implement the requirements of the Violence Against Women Act (VAWA) as reauthorized in 2013 under the Violence Against Women Reauthorization Act of 2013 (VAWA 2013). VAWA 2013 provides enhanced statutory protections for victims of domestic violence, dating violence, sexual assault, and stalking. VAWA 2013 also expands VAWA protections to HUD programs beyond HUD's public housing and Section 8 programs, which were covered by the reauthorization of VAWA in 2005 (VAWA 2005). In addition to proposing regulatory amendments to fully implement VAWA 2013, HUD is also publishing for public comment two documents concerning tenant protections required by VAWA 2013—a notice of occupancy rights and an emergency transfer plan. Although VAWA refers to women in its title, the statute makes clear that the protections are for all victims of domestic violence, dating violence, sexual assault, and stalking, regardless of sex, gender identity, sexual orientation, or age.

On July 19, 2013, HUD published a proposed rule on Affirmatively Furthering Fair Housing. The comment period for the proposed rule closed on September 17, 2013. HUD received over 1,000 public comments in response to the proposed rule. While many commenters expressed outright support for HUD's proposal, and other commenters expressed outright opposition, the majority of the commenters provided valuable feedback and suggestions on HUD's proposal. One area of concern expressed by many commenters was the ability of program participants, those that are small or those that receive small grants or allocations of HUD funds, to prepare and submit the Assessment of Fair Housing (AFH) in accordance with the process set out in HUD's proposed rule, and by the proposed submission deadline. Commenters comprised of State jurisdictions or their representatives also expressed concern about the ability to complete an AFH, which they commented did not take into consideration the unique role of States. These commenters stated that HUD's proposed AFH was tailored to entitlement jurisdictions. In response to these comments, HUD is considering providing certain HUD program participants—States, Insular Areas, qualified PHAs, jurisdictions receiving a small Community Development Block (CDBG) grant (which is based on a percentage of the CDBG formula appropriation, as described in this notice)—with the option of submitting their first AFH at a date later than would otherwise be required for program participants that are not States or Insular Areas, not qualified PHAs, and are not grantees receiving a small CDBG grant, as proposed to be defined in this notice. This supplemental notice of proposed rulemaking therefore re-opens the public comment period on the Affirmatively Furthering Fair Housing proposed rule for an additional 30 days solely to seek comment on these specific issues. HUD is not soliciting comment on any other issues related to HUD's July 19, 2013, proposed rule.

Section 243 of the Department of Housing and Urban Development Appropriations Act, 2014 (2014 Appropriations Act), authorized HUD to implement certain statutory changes to the United States Housing Act of 1937 (1937 Act) made by the 2014 Appropriations Act through notice, followed by notice and comment rulemaking. Notices implementing the changes were published on May 19, 2014, and June 25, 2014. Consistent with statutory direction, this proposed rule commences the rulemaking process to codify in regulation the statutory changes made to the 1937 Act by the 2014 Appropriations Act and to solicit comment on HUD's implementation of these changes through the published notices. HUD intends to address the FY14 provision on consortia through separate rulemaking. In addition, this rulemaking also proposes changes to streamline regulatory requirements pertaining to certain elements of the Housing Choice Voucher (HCV), Public Housing (PH), and various multifamily housing (MFH) rental assistance programs; to reduce the administrative burden on public housing agencies (PHAs) and MFH owners; and to align, where feasible, requirements across programs. One of the proposed changes would also affect the HOME Investment Partnerships program, Continuum of Care program, and the Housing Opportunities for Persons With AIDS (HOPWA) program which are administered by HUD's Office of Community Planning and Development.

On September 16, 2014, HUD published an interim rule that revised the financial reporting deadlines for operators participating in FHA's program for insurance of health care facilities under section 232 of the National Housing Act (Section 232 program) to bring them in-line with the reporting periods prescribed in HUD's Uniform Financial Reporting Standards, to which owners and borrowers participating in the Section 232 program are subject. HUD received no public comments in response to its solicitation of comment in the September 16, 2014, rule, and is therefore adopting the interim rule without change.

On September 16, 2014, HUD published an interim rule that revised the financial reporting deadlines for operators participating in FHA's program for insurance of health care facilities under section 232 of the National Housing Act (Section 232 program) to bring the operators in-line with the reporting periods prescribed in HUD's Uniform Financial Reporting Standards. In accordance with HUD's regulations implementing its Uniform Financial Reporting Standards, HUD is providing notice that it has issued guidance on the manner in which the reports by operators are to be submitted to HUD.

Through a final rule published on September 7, 2012, HUD revised the regulations for FHA's program for insurance of health care facilities under section 232 of the National Housing Act (Section 232 program). In the September 7, 2012, final rule, HUD retained the longstanding requirement that owners and borrowers participating in the Section 232 program submit audited financial statements to HUD, and added the requirement that operators of Section 232 facilities also submit financial statements to HUD on a quarterly and annual basis. However, the September 7, 2012, rule placed operators on a different submission deadline than that required of owners. This interim rule revises the financial reporting deadlines for operators to bring them in-line with the reporting periods prescribed in HUD's Uniform Financial Reporting Standards, to which owners and borrowers are subject.

On June, 25, 2014, HUD published a document implementing statutory changes made by the Department of Housing and Urban Development Appropriations Act, 2014 to certain programs administered by HUD's Office of Housing and HUD's Office of Public and Indian Housing. In the discussion of implementation of the new definition of “extremely low-income” applicable to multifamily projects administered by HUD's Office of Housing, the document referred to “contract administrators” and it should have referenced “owners.” This document makes that correction.

This proposed rule would revise HUD's public housing agency (PHA) consortium regulations. These regulations provide the procedures by which PHAs may choose to administer their public housing and Section 8 programs. The changes proposed are intended to increase administrative efficiencies associated with forming a consortium and to help ensure maximum family choice in locating suitable housing. The proposed rule focuses mainly on establishing a new category of consortia for administration of the Section 8 Housing Choice Voucher (HCV) program. This type of consortium would be comprised of multiple PHAs that would become a single PHA, with a single jurisdiction and a single set of reporting and audit requirements, for purposes of administering the Section 8 HCV program. This type of consortium would be in addition to the consortium structure established in current consortium regulations which the Department is referring to as multiple-ACC consortium in this proposed rule. The proposed rule would also revise the categories of Section 8 programs eligible to be administered under a consortium, and establish new requirements regarding the timeframes for the establishment and dissolution of a consortium. Further, HUD has taken the opportunity afforded by this proposed rule to make several technical, nonsubstantive changes to improve the clarity and organization of the consortia regulations. HUD has also taken the opportunity afforded by this proposed rule to amend the definition of “public housing agency” to be consistent with amendments to the United States Housing Act of 1937 (1937 Act), as provided for in the Consolidated Appropriations Act of 2014.

This rule streamlines the FHA financial statement reporting requirements for lenders and mortgagees who are supervised by federal banking agencies and whose consolidated assets do not meet the thresholds set by their supervising federal banking agencies for submission of audited financial statements (currently set at $500 million in consolidated assets). HUD's regulations currently require all supervised lenders and mortgagees to submit annual audited financial statements as a condition of FHA lender approval and recertification. Through this rule, in lieu of the annual audited financial statements, small supervised lenders and mortgagees would be required to submit their unaudited financial regulatory reports that align with their fiscal year ends and are required to be submitted to their supervising federal banking agencies. Small supervised lenders and mortgagees would only be required to submit audited financial statements if HUD determines that the supervised lenders or mortgagees pose heightened risk to the FHA insurance fund. This rule does not impact FHA's annual audited financial statements submission requirement for nonsupervised and large supervised lenders and mortgagees. The rule also does not impact those supervised lenders and mortgagees with consolidated assets in an amount that requires that lenders or mortgagees submit audited financial statements to their respective supervising federal banking agencies. Additionally, this final rule, consistent with the proposed rule, makes three technical changes to current regulations regarding reporting requirements for FHA-approved supervised lenders and mortgagees.

Through this rule, HUD proposes to provide HUD program participants with more effective means to affirmatively further the purposes and policies of the Fair Housing Act, which is Title VIII of the Civil Rights Act of 1968. The Fair Housing Act not only prohibits discrimination but, in conjunction with other statutes, directs HUD's program participants to take steps proactively to overcome historic patterns of segregation, promote fair housing choice, and foster inclusive communities for all. As acknowledged by the U.S. Government Accountability Office (GAO) and many stakeholders, advocates, and program participants, the current practice of affirmatively furthering fair housing carried out by HUD grantees, which involves an analysis of impediments to fair housing choice and a certification that the grantee will affirmatively further fair housing, has not been as effective as had been envisioned. This rule accordingly proposes to refine existing requirements with a fair housing assessment and planning process that will better aid HUD program participants fulfill this statutory obligation and address specific comments the GAO raised. To facilitate this new approach, HUD will provide states, local governments, insular areas, and public housing agencies (PHAs), as well as the communities they serve, with data on patterns of integration and segregation; racially and ethnically concentrated areas of poverty; access to education, employment, low-poverty, transportation, and environmental health, among other critical assets; disproportionate housing needs based on the classes protected under the Fair Housing Act; data on individuals with disabilities and families with children; and discrimination. From these data, program participants will evaluate their present environment to assess fair housing issues, identify the primary determinants that account for those issues, and set forth fair housing priorities and goals. The benefit of this approach is that these priorities and goals will then better inform program participant's strategies and actions by improving the integration of the assessment of fair housing through enhanced coordination with current planning exercises. This proposed rule further commits HUD to greater engagement and better guidance for program participants in fulfilling their obligation to affirmatively further fair housing. With this new clarity through guidance, a template for the assessment, and a HUD-review process, program participants should achieve more meaningful outcomes that affirmatively further fair housing.

HUD regulations governing multifamily rental housing for the elderly or persons with disabilities allow for the residents of such housing to own common household pets, subject to the residents' paying a refundable pet deposit. Currently, the regulations require that owners of HUD-assisted multifamily rental housing for the elderly or persons with disabilities collect the deposit and any increases in the deposit from the pet owner only through gradual accumulation; that is, an initial payment followed by subsequent monthly payments. This requirement does not exist for public housing agencies (PHAs) and owners of other HUD-assisted multifamily rental housing. Rather, HUD regulations provide PHAs and owners of other HUD-assisted multifamily rental housing discretion to determine whether to gradually accumulate a pet deposit and any increases to the pet deposit. This proposed rule would provide owners of HUD-assisted multifamily rental housing for the elderly or persons with disabilities, now subject to the gradual-accumulation pet deposit requirement, with the same flexibility, thereby bringing consistency to the pet deposit requirements for HUD programs and better enabling owners of such housing to handle the costs associated with pet ownership by tenants. This proposed rule only applies to policies for pets and not to service or assistance animals for persons with disabilities.

On September 7, 2012, HUD published a final rule that revised the regulations governing the insurance of healthcare facilities under section 232 of the National Housing Act (Section 232). HUD's Section 232 program insures mortgage loans to facilitate the construction, substantial rehabilitation, purchase, and refinancing of nursing homes, intermediate care facilities, board and care homes, and assisted-living facilities. The amendments made by the September 7, 2012, final rule updated the Section 232 regulations to reflect current policy and practices, improve accountability and strengthen risk management in the program. The final rule provided an applicability date of April 9, 2013, for certain of the updated requirements. This final rule amendment changes the applicability date to July 12, 2013, for the purpose of allowing more time to transition to the new requirements.

This proposed rule would streamline the FHA financial statement reporting requirements for lenders and mortgagees who are supervised by federal banking agencies and whose consolidated assets do not meet the thresholds set by their supervising federal banking agencies for submission of audited financial statements (currently set at $500 million in consolidated assets). HUD's regulations currently require all supervised lenders and mortgagees to submit annual audited financial statements as a condition of FHA lender approval and recertification. Through this proposed rule, in lieu of the annual audited financial statements, small supervised lenders and mortgagees would be required to submit the unaudited financial regulatory reports that align with their fiscal year ends and are required to be submitted to their supervising federal banking agencies. Small supervised lenders and mortgagees would only be required to submit audited financial statements if HUD determines that the supervised lenders or mortgagees pose heightened risk to the FHA insurance fund. This rule does not impact FHA's annual audited financial statements submission requirement for nonsupervised and large supervised lenders and mortgagees. The rule also does not impact those supervised lenders and mortgagees with consolidated assets in an amount that requires that lenders or mortgagees submit audited financial statements to their respective supervising federal banking agencies. Finally, HUD has taken the opportunity afforded by this proposed rule to make three technical changes to current regulations regarding reporting requirements for FHA-approved supervised lenders and mortgagees.

In 2010 through 2011, HUD commenced and completed the process of revising regulations applicable to, and closing documents used in, FHA insurance of multifamily rental projects, to reflect current policy and practices in the multifamily mortgage market. This final rule results from a similar process that was initiated in 2011 for revising and updating the regulations governing, and the transactional documents used in, the program for insurance of healthcare facilities under section 232 of the National Housing Act (Section 232 program). HUD's Section 232 program insures mortgage loans to facilitate the construction, substantial rehabilitation, purchase, and refinancing of nursing homes, intermediate care facilities, board and care homes, and assisted-living facilities. This rule revises the Section 232 program regulations to reflect current policy and practices, and improve accountability and strengthen risk management in the Section 232 program.

HERA, enacted into law on July 30, 2008, made comprehensive and significant reforms to several HUD programs, including HUD's Public Housing, Section 8 Tenant-Based Voucher, and Project-Based Voucher programs. On November 24, 2008, HUD published a notice that provided information about the applicability of certain HERA provisions to these programs. The notice identified: (1) Those statutory provisions that are self-executing and required no action on the part of HUD for the program changes made by HERA to be implemented; and (2) those statutory provisions that require new regulations or regulatory changes by HUD for the HERA provisions to be implemented. The notice also offered the opportunity for public comment on the guidance provided. This proposed rule follows the November 24, 2008, notice for the purpose of establishing, in regulation, the reforms made to HERA as discussed in that notice, and to make other related regulatory changes. This proposed rule would make conforming changes to the regulations of the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher programs to reflect the self-executing provisions of HERA, and would also amend the regulations required to implement those statutory provisions of HERA that are not self-implementing. Additionally, this rule would make such other changes for the purposes of updating certain regulations to reflect current practices, and clarifying other regulations which, based on experience, HUD determined would benefit from clarification. While the conforming and clarifying changes are not implementing new policy, HUD nevertheless welcomes comment on the clarity and comprehensibility of the language proposed to be codified. This rule also takes into consideration the two public comments received in response to issuance of the November 2008 notice, and solicits additional public comment. HERA changes affecting the public housing program are being addressed by separate rulemaking.

In 2010 through 2011, HUD commenced and completed the process of revising regulations applicable to, and closing documents used in, FHA insurance of multifamily rental projects, to reflect current policy and practices in the multifamily mortgage market. The multifamily rental project regulations and closing documents had not been updated in more than 20 years. Through this proposed rule, HUD commences a similar process for its regulations governing insurance of healthcare facilities under section 232 of the National Housing Act, and the closing documents used in such transactions. HUD's Section 232 program insures mortgage loans to facilitate the construction, substantial rehabilitation, purchase, and refinancing of nursing homes, intermediate care facilities, board and care homes, and assisted-living facilities. This rule proposes amendments to update HUD's Section 232 regulations, to reflect current policy and practices, and to improve accountability and strengthen risk management.