Skip to Content

Notice

Federal Housing Administration (FHA): Multifamily Accelerated Processing (MAP)-Lender and Underwriter Eligibility Criteria and Credit Watch for MAP Lenders

Document Details

Information about this document as published in the Federal Register.

Enhanced Content

Relevant information about this document from Regulations.gov provides additional context. This information is not part of the official Federal Register document.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

ACTION:

Notice.

SUMMARY:

This proposed notice provides additional, detailed information to FHA-approved lenders and members of the public about HUD's processes for determining lender and underwriter eligibility and tier qualification for MAP participation. This proposed notice accompanies HUD's proposed rule on the same topic, published elsewhere in today's Federal Register. This notice includes the quantity, specific characteristics, and recentness of transactions that a lender or underwriter must have undertaken in order to qualify for each tier of MAP approval.

DATES:

Comment Due Date: June 11, 2012.

ADDRESSES:

Interested persons are invited to submit comments on this notice to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.

1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.

2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

Note:

To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the rule.

No Facsimile Comments. Facsimile (FAX) comments are not acceptable.

Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service, toll-free, at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Terry W. Clark, Office of Multifamily Development, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 6134, Washington DC 20410; telephone number (202) 402-2663 (this is not a toll-free number). Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

Under its proposed rule, published elsewhere in today's Federal Register, HUD would revise 24 CFR part 200, subpart Y, to provide for tiered approval of new and existing MAP lenders and underwriters, such that only lenders and underwriters with adequate experience and qualifications could underwrite loans involving more complex multifamily housing programs and transactions.

II. Purpose

This proposed notice provides the tiered MAP approval lender and underwriter experience requirements referenced in the proposed amendment to 24 CFR part 200, “Multifamily Accelerated Processing (MAP); MAP Lender Quality Assurance Enforcement.” Under the terms of the proposed rule, HUD may establish and from time to time propose to revise these experience requirements for new and existing MAP lenders and underwriters, as market conditions or HUD's experience indicate would be prudent to adequately protect the FHA General Insurance Fund from unacceptable risk, through notice and the opportunity for public comment. The purpose of this notice is to propose the minimum number and type of closings required for MAP lender and underwriter approval at each qualification tier, and the time frame within which the loans must have closed within the tier to be found by HUD to be acceptable experience.

This practice would mitigate risk, since MAP lenders and underwriters will now be approved at a tier level commensurate to their demonstrated experience.

III. Tier Approval Experience Requirements

As would be provided in § 200.1411(b) of the proposed rule, an FHA lender or underwriter may use MAP to process or underwrite only those loan transactions that are covered by the lender or underwriter's MAP approval tier. The tiers are as follows:

Tier 1: Acquisition and refinancing programs (i.e., the FHA 223(f) or 223(a)(7) programs) without government subsidies;

Tier 2: Acquisition and refinancing programs (i.e., the FHA 223(f) or 223(a)(7) programs) with or without government subsidies;

Tier 3: All MAP-eligible programs (i.e., the FHA 220, 223(f), 223(a)(7), 221(d), 231, and 241 programs) without government subsidies; and

Tier 4: All MAP-eligible programs (i.e., the FHA 220, 223(f), 223(a)(7), 221(d), 231, and 241 programs), with or without government subsidies.

In accordance with § 200.1413(b) and § 200.1415(b) of the proposed rule, a MAP lender or underwriter would be approved at a tier level commensurate with the lender or underwriter's experience in underwriting and in processing transactions that are covered by that tier, or in underwriting and processing equivalent non-FHA loan transactions. (A non-FHA transaction may be deemed equivalent to a given FHA-covered loan transaction as provided in § 200.1413(b)(1)(i) or § 200.1415(a)(1), as applicable.) To qualify a lender or underwriter for MAP approval at a tier level, the loan transactions would be required to have closed and to be of the quantities, characteristics, and recentness provided in the following table:

TierExperience requirements
Tier 1Five firm commitments issued or closings of 223(f) or closing of equivalent transactions within the past 5 years.
Tier 2Five firm commitments issued or closings of 223(f) or closing of equivalent transactions within the past 5 years, and at least three of the transactions must have been with government subsidies.*
Tier 3Five firm commitments issued or closings of 220, 221(d), 231, 232, or 241 or equivalent transactions within the past 5 years.
Tier 4Five firm commitments issued or closings of 220, 221(d), 231, 232, or 241 or equivalent transactions within the past 5 years, and at least three of the transactions must have been with government subsidies.*
* See section II.A of the proposed rule's preamble for a discussion of qualifying government subsidies.

The requirement for new and existing lenders and underwriters to have undertaken five transactions within 5 years in order to demonstrate qualification at a tier represents an increase compared to HUD's current policy of requiring underwriters to have undertaken three transactions within 3 years for general MAP approval. HUD has observed that lenders whose underwriters had only three qualifying transactions within 3 years have often had insufficient familiarity with the programs and their responsibilities under the MAP program. To ensure appropriate management of risk to the FHA insurance fund, it is essential that new and existing MAP lenders and underwriters have adequate transactional experience before they undertake their first transaction pursuant to their MAP approval at a given tier. HUD, therefore, proposes to increase the minimum number of transactions to five, but, accordingly, to provide that the transactions must have occurred within 5 years of when approval is sought, rather than within 3 years.

Dated: March 16, 2012.

Carol J. Galante,

Acting Assistant Secretary for Housing—Federal Housing Commissioner.

[FR Doc. 2012-8679 Filed 4-11-12; 8:45 am]

BILLING CODE 4210-67-P