Withdrawal of Proposed Rule on Sources of Homeowner Downpayment Pursuant to Section 203 of the National Housing Act

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 203

[Docket No. FR-4469-N-02]

RIN 2502-AH38

Withdrawal of Proposed Rule on Sources of Homeowner Downpayment Pursuant to Section 203 of the National Housing Act

AGENCY:

Office of the Assistant Secretary for Housing-Federal Housing Commissioner, HUD.

ACTION:

Withdrawal of proposed rule.

SUMMARY:

This Notice withdraws a proposed rule that would have prohibited gifts from non-profit organizations being used for the mortgagor's investment in a mortgaged property if the organization received the funds for the gift either directly or indirectly from the seller.

DATES:

This notice is effective January 12, 2001.

FOR FURTHER INFORMATION CONTACT:

Vance Morris, Director, Home Mortgage Insurance Division, Room 9266, Department of Housing and Urban Development, 451 Seventh Street, SW, Washington, DC 20410-8000, (202) 708-2700 (this is not a toll-free number). For hearing-and speech-impaired persons, this number may be accessed via TTY (text telephone) by calling the Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Background

On September 14, 1999, HUD published in the

Federal Register

a proposed rule to establish standards for the use of gifts provided by non-profit organizations as a source of the mortgagor's investment in the mortgaged property. The regulation would have permitted certain gifts by non-profit corporations for use as the mortgagor's investment, but would have prohibited them whenever they were directly or indirectly derived from the seller of the property, or if the seller

paid other consideration or reimbursement to the nonprofit for making the gift.

The comment period closed on November 15, 1999. By the time of the close of the comment period, HUD received 1,871 comments. Only 21 of these comments favored the rule. The overwhelming majority of comments opposed the rule.

Based on these public comments, HUD has determined to withdraw this proposed rule on sources of homeowner downpayment.

Dated: January 2, 2001.

William C. Apgar,

Assistant Secretary for Housing-Federal Housing Commissioner.

[FR Doc. 01-1000 Filed 1-11-01; 8:45 am]

BILLING CODE 4210-27-P