ua14no94 DEPARTMENT OF THE INTERIOR (DOI)...

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)
Statement of Regulatory Priorities
In January of 1993, the incoming Administration found a HUD suffering 
from years of reductions in resources, with no clear sense of direction 
or mission. Secretary Henry Cisneros immediately embarked on a program 
to ``Reinvent HUD'' which would involve every HUD employee and key 
program partners and customers. This effort defined HUD's mission, 
established priorities for the coming year and identified the most 
significant program and management problems in need of resolution.
Among the significant obstacles to effective performance identified by 
HUD staff and customers was the lengthy and cumbersome process required 
to issue regulations. One of the many sources of frustration with HUD 
on the part of the public and Congress was the failure to issue 
regulations on a timely basis to implement programs and statutory 
changes. HUD's regulatory program is a mission-oriented program, with 
most regulations implementing program requirements. Timely issuance of 
regulations is a key factor in effective program implementation.
In July 1993, the Reinventing HUD Task Force issued a report of 
``Employee Recommendations for Internal Management Improvements That 
Can Be Implemented Within a Six-month Timeframe.'' The regulation 
issuance process was one of five major problem areas identified. Those 
recommendations which were found to be within management control were 
implemented by the Deputy Secretary on October 7, 1993. The most 
significant change in the rules process has been the implementation of 
the Top 25 Rules procedure. The highest priority rules under 
development are identified and reviewed with key staff every two weeks 
at a meeting co-chaired by the Deputy Secretary and Chief of Staff. 
This results in a common focus by the responsible policy officials and 
support organizations on the most significant rules.
The Task Force Report also identified external review requirements as 
an additional source of delay of regulations. The issuance of Executive 
Order 12866 on September 30, 1993, has addressed the concern for 
improvement of the external review of regulations by the Office of 
Management and Budget. The streamlining of the reviews to focus on the 
Department's significant regulations has resulted in better turnaround 
and more opportunity for meaningful discussion of significant issues. 
To make the process still more effective, the Top 25 listing is shared 
with the Office of Information and Regulatory Affairs and used as a 
basis for assuring that the critical rules are expedited.
Using this process, the Department has been able to focus in the past 
year on completing action on outstanding legislative mandates and on 
preparing regulations to implement the 1994 Multifamily Property 
Disposition Reform Act. At the same time, the basis has been laid for 
substantial improvement to major programs through legislative change 
and revised regulation. The extensive discussions with State and local 
governments, housing authorities and community development agencies, 
residents, nonprofit organizations, foundations, associations 
representing all of these groups and other program participants as part 
of the reinvention process provided recommendations for change which 
have been invaluable in developing the regulatory and legislative 
program.
Carrying out the intent of Executive Order 12866, public participation 
in the process has been improved by including program partners and the 
ultimate beneficiaries in working groups and by more extensive use of 
public meetings. New formats are also being devised to make regulations 
more comprehensible and workable. Where appropriate, the Department is 
working closely with other Federal agencies to develop rules.
In addition, the Department is making greater use of modern information 
technology both internally and externally to support the rules 
development process and as an integral part of improving program 
delivery. The Department's internal tracking system is being improved 
and a new system, HUDCLIPS, is being implemented which will give the 
public access to Departmental regulations electronically. Information 
technology is being used to support implementation of streamlined 
program requirements for the consolidated Community Planning and 
Development Plan as described below. Innovative techniques are also 
being used to support the rulemaking process such as the recently 
completed electronic conference on the RESPA rule described below.
 The 1994 Regulatory Plan of the Department of Housing and Urban 
Development will support the achievement of the Department's mission of 
helping to create cohesive, economically healthy communities all across 
America, and accomplishment of the five program priorities established 
to fulfill the mission. In the coming year, we will complete or 
initiate regulatory actions which support this mission.
In the plan which follows, we identify the specific regulatory actions 
we anticipate to support each priority. Further details on all of these 
actions are included in the descriptions which follow. In some cases, 
significant legislative initiatives are pending which will become major 
elements in our plans when enacted. In those cases, specific details on 
the regulatory action are not available.
Priority: Reducing Homelessness
Reduce the number of homeless Americans through partnerships with local 
governments and private-sector nonprofit groups that help people gain 
access to housing and the services they need.
Regulatory Action: Implement the ``Stewart B. McKinney Homeless 
Assistance Reorganization Act of 1994''
Currently, HUD provides homeless assistance to communities through 
several programs which have separate applications and program 
requirements, creating an administrative burden for both grantees and 
HUD. The proposed legislation will reorganize six separate homeless 
assistance grant programs into a single program that will be formula-
based, flexible and designed to help States and cities develop and 
implement community-devised continuum of care systems. The specific 
details and timing of the regulations required to support the new 
program will be determined after enactment.
Priority: Turning Around Public Housing
Make public housing a source of pride to communities by encouraging 
resident participation in its management, downsizing large 
developments, restoring deteriorating buildings, offering residents 
opportunities to move to low-poverty areas, giving residents incentives 
to work and lift themselves economically, and ensuring that these 
developments become safe, healthy, and attractive places to live and 
raise children.
To support the achievement of this priority, the Department has 
conducted a comprehensive review of all statutes, regulations and 
related issuances on the public housing program. The review teams 
included housing authority employees and residents, legal services 
representatives and HUD employees. Based on information provided by 
their review, detailed plans have been developed to improve the program 
in five functional areas: organization, management and personnel; 
financial management; facilities management; marketing and lease 
management; and community relations and involvement. In each of the 
areas action plans have been developed which include proposals for 
legislative change and revisions to regulations and directives. As the 
changes emanating from this process are implemented, the regulations 
will be revised to simplify existing language, reduce the number of 
regulations, allow greater flexibility, and make the program more 
effective. Specific examples of revisions to major regulations which 
are in process follow.
In addition to these initiatives, the Department has proposed 
legislation to reform the public housing rent structure and to create 
the Community Partnerships Against Crime (COMPAC) to expand the tools 
available to eliminate crime in public housing. Implementation of these 
initiatives will be priorities after enactment.
Regulatory Action: Indian Housing Deregulation
This rule proposes amendments to the Indian Housing Consolidated 
Program regulations to simplify program processes, reduce the number of 
regulatory requirements, and to provide more flexibility to local 
Tribal and Indian housing authority (IHA) officials in the 
administration of the Indian housing program. The rule will provide 
greater discretion and responsibility to IHAs in carrying out their 
housing programs, thereby returning them to local control.
The rule was developed with input from program participants beginning 
in September 1993. In March 1994, a session to discuss the proposed 
changes was held in Washington, DC, with the National American Indian 
Housing Council, eight regional IHA associations, and Tribal leaders, 
as well as a number of representatives from other IHAs. Additional 
verbal comments were received from the Native American housing 
community at that time and the six Office of Native American Programs 
offices continued to involve affected parties in the process by 
conducting sessions with IHAs and Tribes on the proposed changes.
Regulatory Action: Revision of the Public Housing Management Assessment 
Program
The Public Housing Management Assessment Program is the major tool for 
assessing the performance of public housing authorities. However, the 
current system includes some process- oriented, staff-intensive 
reporting requirements that are thought not to be necessarily accurate 
or objective measures of results. The proposed revisions will eliminate 
unnecessary paperwork and provide better measures of performance and 
program results to promote better management of public housing 
developments. The rule incorporates recommendations made as a result of 
the review of program regulations.
Regulatory Action: Public Housing Development Program Revision
The current public housing development program regulations are outdated 
and contain unnecessary restrictions on the flexibility of public 
housing authorities (PHAs). The regulations will be revised to provide 
more flexibility for all participants with even greater flexibility to 
the best performers. ``High performer'' PHAs will have maximum latitude 
to develop public housing within very broad parameters, and with 
minimal HUD oversight (with the exception of those elements that the 
Department, by statute, must perform). Remaining PHAs will be given 
broadened responsibility commensurate with their abilities and areas of 
expertise. HUD will retain the option of reviewing any PHA action, thus 
minimizing risk to the Department.
Streamlining the program will help to reduce a substantial 
preconstruction pipeline and expedite the provision of replacement 
housing for developments that should be fully or partially replaced. 
The proposed regulation will reflect the recommendations resulting from 
the review of the public housing program.
Priority: Expanding Housing Opportunities
Expand Housing opportunities for low- and moderate-income people 
through partnerships with state and local governments, private 
developers, lending institutions, and nonprofit agencies, and 
reestablish the Federal Housing Administration as an active facilitator 
of homeownership for low- and moderate-income families.
In May 1994, Secretary Cisneros called for a study on the future of 
FHA. The study will re-examine how FHA can be reorganized to eliminate 
bureaucratic barriers and to transform it into a more entrepreneurial, 
mission-driven institution.
Eight public forums are being held throughout the country this year by 
Assistant Secretary for Housing-FHA Commissioner Nicolas Retsinas to 
discuss various aspects of the FHA program and how it could be 
improved. As this effort continues, the results will be incorporated 
into plans for revisions of the regulations for the mortgage insurance 
programs.
The specific actions identified below will support the goal of making 
housing opportunities available at lower cost.
Regulatory Action: Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992--Implementing Regulations
This rule will include housing goals for Fannie Mae and Freddie Mac 
(the Government-Sponsored Enterprises, the ``GSEs'') for 1995 and 
beyond, fair-lending requirements, guidelines for new program approval, 
regulations for proprietary information, reporting requirements, and 
other issues. The rule will focus additional financing efforts by the 
GSEs on underserved areas and lower-income families facing 
affordability problems. It will provide final guidance to replace the 
Interim Notice under which the GSEs' affordable housing programs are 
operating.
Prior to drafting this proposed rule, HUD met many times with the GSEs 
to discuss issues relating to the Interim Notice under which the GSEs 
were operating. HUD also held two roundtables to discuss the definition 
of ``underserved'' used in establishing the central cities, rural 
areas, and other underserved areas goals. Roundtable participants 
included the GSEs, researchers, other Federal agencies (Department of 
Agriculture, Farmers Home, Census Bureau), the Congressional Budget 
Office, and public-interest groups. HUD also held four meetings with 
the GSEs during the drafting of the proposed rule for the purpose of 
allowing HUD to clarify assumptions it was making about the GSEs' 
operations and projections of future activities.
Regulatory Action: Regulations Implementing the Multifamily Housing 
Property Disposition Reform Act of 1994
The Reform Act will expedite the foreclosure of multifamily projects 
with HUD-held mortgages and the sale of multifamily HUD-owned projects. 
Expediting the foreclosure and disposition process will reduce the cost 
to the Federal Government of this program and facilitate the return of 
the housing inventory to the private housing market. It also will free 
HUD staff to focus on other housing priorities.
The regulations will utilize a user-friendly question-and-answer 
format, as well as several charts to explain the more complicated 
sections.
Regulatory Action: RESPA: Computer Loan Origination and Controlled 
Business Amendments
This regulation will amend the RESPA rule issued November 2, 1992. It 
will revise the rule's provisions on use of computer loan origination 
services and employer-employee exempted payments. This rule promotes 
the use of interactive electronic technology. In September 1994, the 
Department sponsored a demonstration of this technology for use in 
computer loan origination. In addition, the Department conducted an 
electronic conference on the rule from August 19, 1994, through 
September 30, 1994.
Regulatory Action: GNMA Multiclass Securities Program--Final Rule
The GNMA Multiclass Securities Program provides increased demand for 
federally insured and guaranteed mortgages by allowing sponsors to 
create multiclass securities, backed by GNMA single class mortgage-
backed securities, to meet various investors' particular needs. As a 
result the program enhances liquidity and promotes expanded housing 
opportunities for low- and moderate-income people by effectively 
lowering interest rates to the homebuyer.
Priority: Opening Housing Markets
Open housing markets to minorities through vigorous enforcement of fair 
housing laws and support for creative metropolitan-wide housing and 
urban development initiatives.
The rules proposed in this section of the plan support not only the 
Secretary's priority but also the implementation of Executive Order 
12892 of January 17, 1994, Leadership and Coordination of Fair Housing 
in Federal Programs: Affirmatively Furthering Fair Housing.
Regulatory Action: Implement Fair Housing Planning To Affirmatively 
Further Fair Housing in Community Planning and Development Programs
The Fair Housing Plan rule will establish clear requirements for 
entitlement recipients on their obligations to affirmatively further 
fair housing, promote significantly greater housing choice and 
opportunity for protected classes, and promote customized remedies for 
locally identified housing and related discriminatory practices.
Regulatory Action: Regulation on Affirmatively Furthering Fair Housing 
in All HUD Programs
This rule will provide clear guidance for HUD staff and program 
participants on the requirement for affirmatively furthering fair 
housing in all HUD programs. It will demonstrate the Department's 
commitment to affirmatively further fair housing.
Regulatory Action: Regulation on Significant Facilities and Services
This rule sets forth the requirements which must be met for housing for 
persons 55 or older to qualify for exemption from the provisions of the 
Fair Housing Act prohibiting discrimination based on familial status. 
The proposed rule published July 7, 1994, uses a new approach to 
rulemaking by providing extensive examples and fact patterns describing 
circumstances which may be a violation of the Act.
To assure adequate opportunities for public comment, the proposed rule 
provides for a 90-day public comment period and the Department is 
conducting four public meetings to solicit additional comments before 
preparation of a final rule.
Regulatory Action: Mortgage Lending Rule: Implementation of Provisions 
of Title VIII Which Prohibit Discrimination in Lending and the 
Provision of Other Financial Assistance
This rule will set forth policies and practices in the provision of 
mortgage lending which may be violations of the Fair Housing Act. It 
will also implement provisions of the Fair Housing Act that prohibit 
discrimination in the making, purchasing, selling, and servicing of 
home mortgage loans, and the provision of other financial assistance 
relating to dwellings.
This rule will also contain an appendix with extensive examples of 
different fact patterns and circumstances that may be violations of the 
Act. Four public meetings will be conducted on this issue before 
publication of a proposed rule.
Regulatory Action: Regulation on Property Insurance
This rule will set forth the policies and practices in the provision of 
property insurance which may be violations of the Fair Housing Act. It 
will provide guidance to the property insurance industry on compliance 
with the Act and improve the effectiveness of HUD's enforcement.
This rule will also contain an appendix with extensive examples of 
different fact patterns and circumstances that may be violations of the 
Act. To assure broad public participation in the development of this 
rule, HUD published an advance notice of proposed rulemaking on August 
16, 1994. Four public meetings will also be conducted on this issue 
before publication of a proposed rule.
Regulatory Action: Disparate Impact Rule
This rule will set standards for determining if business practices 
which are neutral on their face are violations of Title VIII of the 
Fair Housing Act. This rule will indicate that a violation of the Act 

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