[Federal Register: December 11, 2007 (Volume 72, Number 237)]
[Rules and Regulations]
[Page 70220-70222]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11de07-2]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Rural Business--Cooperative Service
Rural Utilities Service
Farm Service Agency
7 CFR Parts 1924 and 1944
Rural Housing Service
7 CFR Part 3550
RIN 0575-AC65
Thermal Standards
AGENCY: Rural Housing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Housing Service (Agency) is amending its regulations
to be consistent with other Federal agencies. The current thermal
standards for existing single family housing can impose an unnecessary
financial burden on the borrower and are not always cost-effective.
Removing the thermal standards for existing single family housing will
provide consistency with HUD. This change will not affect the thermal
standards for new construction; such requirements are generally
prescribed by adopted building and model energy codes. Construction
materials and building techniques have improved tremendously during the
last thirty years, creating many alternatives to achieve thermally
efficient homes. Removing the Agency's imposed thermal standards for
existing single family housing will give a borrower the opportunity to
allocate money towards other improvements which may result in higher
cost savings. The rule will not result in any increase in costs or
prices to consumers; non-profit organizations; businesses; Federal,
State, or local government agencies; or geographic regions.
DATES: Effective Date: January 10, 2008.
FOR FURTHER INFORMATION CONTACT: Michel Mitias, Technical Support
Branch, Program Support Staff, Rural Housing Service, U.S. Department
of Agriculture, STOP 0761, 1400 Independence Avenue, SW., Washington,
DC 20250-0761; Telephone: 202-720-9653; FAX: 202-690-4335; E-mail:
michel.mitias@wdc.usda.gov.
SUPPLEMENTARY INFORMATION:
Classification
This rule has been determined to be not significant for purposes of
Executive Order 12866 and, therefore, has not been reviewed by the
Office of Management and Budget (OMB).
Civil Justice Reform
In accordance with this rule: (1) All State and local laws and
regulations that are in conflict with this rule will be preempted, (2)
no retroactive effect will be given to this rule, and (3)
administrative proceedings in accordance with 7 CFR part 11 must be
exhausted before bringing suit in court challenging action taken under
this rule, unless those regulations specifically allow bringing suit at
an earlier time.
Regulatory Flexibility Act
The Administrator of the Agency has determined that this rule will
not have a significant economic impact on a substantial number of small
entities as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.). New provisions included in this rule will not impact a
substantial number of small entities to a greater extent than large
entities. Therefore, a regulatory flexibility analysis was not
performed.
Unfunded Mandates Reform Act
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for
State, local, and tribal governments or the private sector. Thus, this
rule is not subject to the requirements of sections 202 and 205 of the
Unfunded Mandates Reform Act of 1995.
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' The Agency has determined that
this action does not constitute a major Federal action significantly
affecting the quality of the human environment, and, in accordance with
the National Environmental Policy Act of 1969, Public Law 91-190, an
Environmental Impact Statement is not required.
Programs Affected
The programs affected are listed in the Catalog of Federal Domestic
Assistance under Number 10.410, Very Low to Moderate Income Housing
Loans (Direct and Guaranteed/Insured).
Federalism
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the National
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on State and local
governments. Therefore, consultation with the States is not required.
Intergovernmental Review
The Agency conducts intergovernmental consultation in the manner
delineated in RD Instruction 1940-J, ``Intergovernmental Review of
Rural Development Programs and Activities,'' and in 7 CFR part 3015,
subpart V. The Very Low to Moderate Income Housing Loans Program,
Number 10.410, is not subject to the provisions of Executive Order
12372, which requires intergovernmental consultation with State and
local officials. An intergovernmental review for this revision is not
required or applicable.
Paperwork Reduction Act
There are no new reporting and recordkeeping requirements
associated with this rule.
E-Government Act Compliance
The Agency is committed to complying with the E-Government Act, to
promote the use of the Internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes. For information
pertinent to E-GOV compliance related to this final rule, please
contact Michel Mitias, 202-720-9653.
Background
The quality of construction, age, and condition of an existing
dwelling financed through the Agency's single family housing programs
may have a significant impact on the unit's thermal efficiency. The
Agency should consider the thermal performance of a home as part of its
overall condition, rather than a separate factor.
Newer residences, or older residences currently in average or good
condition, generally can be accepted as being representative of their
community, and
[[Page 70221]]
are likely to have average thermal efficiency for the market in which
they are located. These homes represent a typical residence in terms of
overall design, construction, and appeal in the marketplace, and can be
presumed to have reasonable, overall thermal performance.
Aging residences, particularly those with significant deficiencies,
or those designated as being in only fair condition or less could
represent a higher risk to the borrower and the Agency. Homes with
older effective ages or in fair condition may be financed in some
circumstances with certain upgrades, but should be thoroughly and
carefully inspected to insure the overall soundness of the collateral,
including thermal components. These homes may require thermal and
insulation upgrades in order to ensure reasonable (average) heating and
cooling costs for borrowers.
The Agency's thermal standards for existing construction, or
similar standard, may serve as a guide for an energy efficient home;
however we recognize that incremental improvements to existing homes to
reach this standard may not always be cost effective. The Agency should
look at homes to be financed based on their overall condition. When a
home needs improvement in order to be acceptable for our financing, the
focus should be on reducing the effective age by improving the existing
overall condition as well as increasing energy efficiency.
A combination of Uniform Residential Appraisal Report (URAR)
designations for ``quality of construction'' and ``condition'', as well
as ``age'' and ``effective age'' may be used to judge the overall
condition of a home, and whether additional analysis needs to be
undertaken to ensure the dwelling will be reasonably thermally
efficient for the market in which it is located. In addition, an on-
site inspection by an Agency representative or designee may provide
further information on the thermal performance of a home. Hence, the
Agency has determined that it is no longer necessary to impose thermal
standards for existing single family housing.
This change will not be subject to Section 509(a) of the Housing
Act of 1949 because it pertains only to existing single family housing.
All new single family housing construction must comply with the Minimum
Property Standards (MPS) adopted by the Department of Housing and Urban
Development (HUD), as well as national model codes adopted by the
applicable jurisdiction, locality, or state.
Comments on the Proposed Rule and Responses
The Proposed Rule was published on May 16, 2007 [72 FR 27470-
27471]. The Agency received a total of 51 comments. Only one comment
was negative. A majority of the comments addressed the additional
burden of thermal requirements for existing construction as a hindrance
in the loan making process. Commenters also noted that these
requirements did not increase the efficiency of the home significantly
with the standards that have been in place over the last 20 years. A
majority of the comments addressed the fact that more loans will be
able to be provided to rural America by not imposing thermal standards
on homes with materials and systems that have improved since this
requirement was imposed. The general consensus is that the importance
of energy efficient housing should be of utmost importance, but should
not be a contingency upon which a home loan approval is determined.
This goal can be met without imposing the existing thermal standards
and can be accomplished by homebuyer education, as well as other
government sponsored programs supporting energy efficient methods and
systems. The end result will allow the Agency to provide more loans to
eligible borrowers, while streamlining this process to conform to other
government agencies. In general, the comments were very supportive of
the proposed rule.
The negative comment (Comment Reference RHS-07-SFH-0012-0004)
mainly focused on the need for energy conservation and that this rule
would not support this goal. There are other methods of energy
conservation for existing construction that can be more beneficial to
the borrowers than what the Agency has required. The Agency has added
guidance to its Handbook that provides alternative methods and
practices to achieve an energy efficient home. This was put into effect
as an alternative to imposed thermal requirements on potential
borrowers seeking Agency financing for existing housing.
List of Subjects
7 CFR Part 1924
Agriculture, Construction management, Construction and repair,
Energy conservation, Housing, Loan programs--Agriculture, Low and
moderate income housing.
7 CFR Part 1944
Grant programs--Housing and community development, Home
improvement, Rural housing, Nonprofit organizations, Loan programs--
Housing and community development.
7 CFR Part 3550
Accounting, Grant programs--Housing and community development,
Housing, Loan programs--Housing and community development, Low and
moderate income housing, Manufactured homes, Reporting and
recordkeeping requirements, Rural areas, Subsidies.
0
Accordingly, chapters XVIII and XXXV, title 7, of the Code of Federal
Regulations are amended to read as follows:
PART 1924--CONSTRUCTION AND REPAIR
0
1. The authority citation for part 1924 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.
Subpart A--Planning and Performing Construction and Other
Development
0
2. Exhibit D of subpart A is amended by:
0
A. Removing the last sentence in paragraph II;
0
B. Removing and reserving paragraph IV B;
0
C. Revising the words ``paragraphs IV A and IV B'' in paragraph IV C 1
to read ``paragraph IV A'';
0
D. Revising the words ``paragraphs IV A and B'' in paragraph IV C 2 to
read ``paragraph IV A'';
0
E. Revising the words ``paragraphs IV A or B'' in the first and last
sentences of paragraph IV C 2b, and in paragraphs IV C 3 introductory
text, IV C 3a and IV C 3b to read ``paragraph IV A''; and
0
F. Removing the words ``or B'' in paragraphs IV C introductory text and
IV C 3c.
PART 1944--HOUSING
0
3. The authority citation for part 1944 continues to read as follows:
Authority: 5 U.S.C. 301; 42 U.S.C. 1480.
Subpart N--Housing Preservation Grants
Sec. 1944.656 [Amended]
0
4. Section 1944.656 is amended by:
0
A. Revising the second sentence in the definition for ``Housing
preservation'' to read ``As a result of these activities, the overall
condition of the unit or dwelling must be raised to meet Thermal
Standards for existing structures adopted by the locality/jurisdiction
and applicable development standards for existing housing recognized by
RHS in subpart A of part 1924 or standards
[[Page 70222]]
contained in any of the voluntary national model codes acceptable upon
review by RHS.''
0
B. Revising the third sentence in the definition for ``Replacement
housing'' to read ``The overall condition of the unit or dwelling must
meet Thermal Standards adopted by the locality/jurisdiction for new or
existing structures and applicable development standards for new or
existing housing recognized by RHS in subpart A of part 1924 or
standards contained in any of the voluntary national model codes
acceptable upon review by RHS.''
PART 3550--DIRECT SINGLE FAMLY HOUSING LOANS AND GRANTS
0
5. The authority citation for part 3550 continues to read as follows:
Authority: 5 U.S.C. 301; 42 U.S.C. 1480.
Subpart B--Section 502 Origination
Sec. 3550.57 [Amended]
0
6. Section 3550.57(c) is amended by adding the word ``and'' after the
word ``systems;'' and by removing ``and meet the thermal performance
requirements for existing dwellings of 7 CFR part 1924, subpart A''.
Subpart C--Section 504 Origination and Section 306C Water and Waste
Disposal Grants
Sec. 3550.106 [Amended]
0
7. Section 3550.106(b) is amended by removing the words ``or thermal
performance standards''.
Dated: November 28, 2007.
Russell T. Davis,
Administrator, Rural Housing Service.
[FR Doc. 07-6009 Filed 12-10-07; 8:45 am]
BILLING CODE 3410-XV-P