[Federal Register Volume 75, Number 220 (Tuesday, November 16, 2010)]
[Rules and Regulations]
[Pages 69871-69878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28756]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 239
[DOD-2009-OS-0090; RIN 0790-AI58]
Homeowners Assistance Program--Application Processing
AGENCY: Under Secretary of Defense for Acquisition, Technology, and
Logistics, Office of the Deputy Under Secretary of Defense
(Installations and Environment), DoD.
ACTION: Final rule.
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SUMMARY: This part continues to authorize the Homeowners Assistance
Program (HAP) to financially compensate eligible military and civilian
Federal employee homeowners when the real estate market is adversely
affected directly related to the closure or reduction-in-scope of
operations due to Base Realignment and Closure (BRAC).
The American Recovery and Reinvestment Act of 2009 (ARRA) expanded
the HAP to provide assistance to: Wounded members of the Armed Forces
(30 percent or greater disability), surviving spouses of fallen
warriors, and wounded Department of Defense (DoD) civilian homeowners
reassigned in furtherance of medical treatment or rehabilitation or due
to medical retirement in connection with their disability; Base
Realignment and Closure (BRAC) 2005 impacted homeowners relocating
during the mortgage crisis; and Service member homeowners undergoing
Permanent Change of Station (PCS) moves during the mortgage crisis.
DATES: Effective Date: January 18, 2011.
FOR FURTHER INFORMATION CONTACT: Deanna Buchner, (703) 602-4353.
SUPPLEMENTARY INFORMATION:
The prompt implementation of the Final Rule is of critical
importance in meeting the goals of the Department of Defense to provide
financial stability and increase quality of life for those impacted by
the mortgage crisis. The Department of Defense will provide financial
assistance to offset financial losses of homeowners who need to sell
their homes in conjunction with PCS moves, base closures, combat
injuries, or loss of spouse in the line of duty.
The Under Secretary of Defense for Acquisition, Technology, and
Logistics has overall responsibility and provides oversight for this
program through the Deputy Under Secretary of Defense for Installations
and Environment (DUSD(I&E)). The Army, acting as the DoD Executive
Agent for administering the HAP and Expanded HAP, uses the
Headquarters, U.S. Army Corps of Engineers (HQUSACE), to implement the
program.
Comments: The Interim Final Rule was published in the Federal
Register on September 30, 2009 (74 FR 50109-50115). In response to the
Interim Final Rule, the DoD received 56 comments during the 90-day
comment period. While many comments crossed several subject areas,
generally they can be placed into three categories: Benefits,
eligibility, or general.
1. Benefit comments: There were 16 comments relating to benefits.
These comments concern: benefit percentage, government acquisition,
short sale, closing costs, and application processing.
a. Benefit percentage. Three comments received concerning the
restriction of 90 percent of the primary fair market value for Base
Realignment and Closure (BRAC) 2005 and Permanent Change of Station
(PCS)
[[Page 69872]]
applicants as opposed to the 95 percent offered in the American
Recovery and Reinvestment Act (ARRA) legislation. Changing this
restriction would increase program costs by at least five percent
overall and place expanded program applicants in the same benefit
category as those where a DoD action (closing an installation) caused
the market decline. ARRA expansion of HAP is designed to assist
eligible applicants from catastrophic financial loss, not protect a
homeowner's investment in real property.
b. Government acquisition. One comment received. The comment
concerned providing private sale augmentation at 100 percent of
mortgage. Private Sale Augmentation is not authorized by law.
c. Short sale. Two comments received concerned applicants receiving
benefits after being forgiven the outstanding mortgage by lender and
with deficiency being subtracted from the final amount due. Changing
the current requirement would enable an applicant to profit by
receiving benefits for amounts forgiven by lenders. The requirement is
further clarified in Sec. 239.5(c)(1).
d. Closing costs. Five comments were received regarding
clarification of what constitutes closing costs. A definition has been
added to Sec. 239.4 (Definitions) that clarifies what is included in
closing costs.
e. Application processing. Five comments were received regarding
how applications are processed and applicants subsequently notified of
eligibility. Clarification has been added to Sec. 239.9 (Application
Processing Procedures) to ensure applicants understand that
applications must be mailed or otherwise delivered to the Corps of
Engineers district office.
2. Eligibility comments: There were 50 comments relating to
eligibility criteria. These comments concern: BRAC 2005 purchase date,
BRAC 2005 definition, Automated Valuation Model (AVM) methodology,
Retiree and Reservist eligibility, Fannie Mae/Freddie Mac conforming
loan limit, PCS purchase date, market decline, and Coast Guard
eligibility.
a. BRAC 2005 purchase date. Six comments received suggesting
changing the requirement for the home to be purchased as of the BRAC
announcement date of May 13, 2005. This requirement remains unchanged.
While language in the ARRA gives the Secretary of Defense the
discretion to allow ownership until July 1, 2006, the basic HAP law,
Demonstration Cities and Metropolitan Development Act of 1966,
established that BRAC impacted individuals should own homes prior to
announcement dates. For example, the two conventional homeowners
assistance programs in effect under the prior law, which are now being
executed at Naval Air Station (NAS) Brunswick, Maine, and Fort
Monmouth, New Jersey, require ownership by May 13, 2005.
b. BRAC 2005 eligibility. Four comments received. One requested
that eligibility for BRAC 2005 include those who were assigned to a
BRAC installation but required to relocate for other than a BRAC
action; one that recommended BRAC eligibility be expanded to include
other Federal agency employees; one requesting BRAC eligibility include
employees at non-BRAC sites but are affected by BRAC unit relocations;
and one requesting a clarification of who is eligible for BRAC 2005
assistance. Current requirement remains unchanged. BRAC eligibility
will continue to be only for those assigned to BRAC organizations where
their positions are eliminated or relocated.
c. AVM methodology and process. Ten comments received expressing
concern that the AVM does not represent current market conditions and
requesting an explanation of the process and data behind the AVM uses
to determine market value. The use of AVM to determine market value has
been eliminated from the rule by no longer requiring owners to show a
ten percent market loss.
d. Retiree and Reservist eligibility. Three comments received; two
requesting voluntary retirement and one requesting Reservists be
included as eligible for benefits. The primary focus of the Expanded
HAP is helping those members where a DoD-ordered move caused the
financial distress experienced by homeowners. Voluntary retirement is
not a DoD-ordered move. Involuntary retirement, however, is a DoD-
ordered move. Reservists called to active duty, who are not expected to
move their household goods, have an option to remain in the areas where
they live and are generally not eligible for the HAP benefit.
e. FannieMae/FreddieMac (FM/FM) Conforming Loan Limit. Twelve
comments received. Some comments requested that this loan limit be
lifted as an eligibility requirement because it does not capture what
is occurring in today's market. Other comments requested that the focus
of this limit be placed on the loan as opposed to purchase price. Sec.
239.6(3) has been changed to remove the requirement for the Prior Fair
Market Value (PFMV) or qualifying mortgage to be within the FM/FM
conforming loan limit for eligibility purposes. The Final Rule removes
the FM/FM limit as an eligibility requirement and specifies a cap on
benefit payments. Benefits cannot exceed an amount equal to the highest
2009 FM/FM conforming loan limit (as amended by the ARRA of 2009),
which is $729,750. For home purchase prices or qualifying mortgages
that exceed this amount, the benefit calculation will use $729,750 as
the purchase price or qualifying mortgage amount.
f. Permanent Change of Station home purchase date. Four comments
received requesting information on how the date was chosen and/or
requesting that the date be changed. The requirement to have purchased
the home prior to July 1, 2006, is based on market trends documented by
S&P/Case-Shiller Home Price Indices, which indicates over ten percent
market decline through the second quarter of 2006 nationwide. The July
1, 2006, date is a statutory requirement and remains unchanged.
g. Personal loss/Market loss requirement. Nine comments received
that suggested the requirement to show a ten percent market loss is too
restrictive. The need to show a ten percent county/parish/city market
decline has been eliminated from the rule; however, the requirement to
show a ten percent decline in individual home value remains.
h. Coast Guard eligibility. Two comments received that expressed
concern that because of Coast Guard PCS procedures, ending the PCS
eligibility on December 31, 2009, unfairly excludes most Coast Guard
applicants from qualifying for the HAP benefit. The end date for PCS
eligibility for members of all services was extended to September 30,
2010.
3. General comments: Received 12 comments of a general nature in
the following categories: tax, marketing, definition of purchase date,
rulemaking process, and the appeal process.
a. Tax. Four comments were received requesting that tax
implications be explained more clearly. 26 U.S.C. 132(n) exempts HAP
benefits from Federal tax. This change has been made in Sec. 239.5(d).
b. Marketing. Two comments were received requesting that the
requirement to list houses on the market prior to obtaining HAP benefit
be lifted. It is important to retain this requirement because it helps
establish a home's current fair market value and will reduce the number
of homes purchased and held in the Government's inventory which would
increase program costs significantly.
[[Page 69873]]
c. Purchase date definition. Four comments were received requesting
clarity on what determines a purchase date, e.g.., deed recording,
signed contract. The Final Rule has been changed to add a definition of
the term purchase. According to that definition, purchase occurs when
the applicant enters into a contract for the purchase of the home or,
in the event there is no contract for purchase, when the applicant
closes on the property.
d. Rulemaking process. One comment received suggesting that
extensions to public comment period be announced by a press release.
The Department of Defense published a notice in the Federal Register on
November 16, 2009 (74 FR 58846) extending the public comment period by
an additional 60-days.
e. Appeal process. One comment received requesting information on
appeal process. Section 239.11 (Appeals) explains the appeal process.
a. Executive Order 12866, ``Regulatory Planning and Review''
Under Executive Order 12866, ``Regulatory Planning and Review,'' 58
FR 51735 (Oct. 4, 1993), a ``significant regulatory action'' is subject
to Office of Management and Budget (OMB) review and the requirements of
Executive Order 12866. Section 3(f) of the Executive Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
(1) Have an annual effect on the economy of $100 million or more,
or may adversely affect in a material way the economy; a sector of the
economy; productivity; competition; jobs; the environment; public
health or safety; or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs, or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
This rule is an economically significant regulatory action under
section 3(f) of Executive Order 12866 because it is expected to have an
annual effect on the economy of more than $100 million and materially
alter the budgetary impact of the Homeowners Assistance Program.
Accordingly, OMB has reviewed this rule.
b. Sec. 202, Public Law 104-4, ``Unfunded Mandates Reform Act''
It has been certified by the DUSD(I&E) that 32 CFR part 239, does
not contain a Federal mandate that may result in expenditure by State,
local, and tribal governments, in aggregate, or by the private sector,
of $100 million or more in any one year.
c. Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
It has been certified by the DUSD(I&E) that 32 CFR part 239, is not
subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it
would not, if promulgated, have a significant economic impact on a
substantial number of small entities.
d. Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter
35)
It has been certified by the DUSD(I&E) that 32 CFR part 239, does
impose reporting or recordkeeping requirements under the Paperwork
Reduction Act of 1995. These requirements have been approved by the
Office of Management and Budget under OMB Control Number 0704-0463.
e. Executive Order 13132, ``Federalism''
It has been certified by the DUSD(I&E) that 32 CFR part 239, does
not have federalism implications, as set forth in Executive Order
13132. This rule does not have substantial direct effects on:
(1) The States;
(2) The relationship between the Federal Government and the States;
or
(3) The distribution of power and responsibilities among the
various levels of Government.
List of Subjects in 32 CFR Part 239
Government employees; Grant programs--housing and community
development; Housing; Military personnel.
0
Accordingly, 32 CFR part 239, is revised to read as follows:
PART 239--HOMEOWNERS ASSISTANCE PROGRAM--APPLICATION PROCESSING
Sec.
239.1 Purpose.
239.2 Applicability and scope.
239.3 Policy.
239.4 Definitions.
239.5 Benefit elections.
239.6 Eligibility.
239.7 Responsibilities.
239.8 Funding.
239.9 Application processing procedures.
239.10 Management controls.
239.11 Appeals.
239.12 Tax documentation.
239.13 Program performance reviews.
239.14 On-site inspections.
239.15 List of HAP field offices.
Authority: 42 U.S.C. 3374, as amended by Section 1001, ARRA,
Public Law 111-5.
Sec. 239.1. Purpose.
This part:
(a) Continues to authorize the Homeowners Assistance Program (HAP)
under Section 3374 of title 42, United States Code (U.S.C.), to assist
eligible military and civilian Federal employee homeowners when the
real estate market is adversely affected directly related to the
closure or reduction-in-scope of operations due to Base Realignment and
Closure (BRAC). Additionally, in accordance with section 1001, American
Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5, this
part temporarily expands authority provided in section 3374, of title
42 U.S.C., to provide assistance to: Wounded, Injured, or Ill members
of the Armed Forces (30 percent or greater disability), wounded
Department of Defense (DoD) and Coast Guard civilian homeowners
reassigned in furtherance of medical treatment or rehabilitation or due
to medical retirement in connection with their disability, surviving
spouses of fallen warriors, Base Realignment and Closure (BRAC) 2005
impacted homeowners relocating during the mortgage crisis, and Service
member homeowners undergoing Permanent Change of Station (PCS) moves
during the mortgage crisis. This authority is referred to as ``Expanded
HAP.''
(b) Establishes policy, authority, and responsibilities for
managing Expanded HAP and defines eligibility for financial assistance.
(c) In accordance with this part, the Under Secretary of Defense
for Acquisition, Technology, and Logistics (USD(AT&L)) has overall
responsibility and, through the Deputy Under Secretary of Defense for
Installations and Environment (DUSD(I&E)), provides oversight for this
program. The Army, acting as the DoD Executive Agent for administering
the HAP, uses the Headquarters, U.S. Army Corps of Engineers (HQUSACE)
to implement the program.
Sec. 239.2 Applicability and scope.
This part applies to the Office of the Secretary of Defense, the
Military Departments (including the U.S. Coast Guard), the Chairman of
the Joints Chiefs of Staff, the Combatant Commands, the Inspector
General of the Department of Defense, the Defense Agencies, DoD Field
Activities, and all other organizational entities within the Department
of Defense (hereafter
[[Page 69874]]
referred to collectively as the ``DoD Components''). This part for
Expanded HAP is applicable until September 30, 2012, or as otherwise
extended by law.
Sec. 239.3 Policy.
It is DoD policy, in implementing section 3374 of title 42, United
States Code, as amended by section 1001 of the ARRA (Pub. L. 111-5),
that those eligible (see section 239.6 of this part) to participate in
the HAP and Expanded HAP are treated fairly and receive available
benefit as quickly as practicable.
Sec. 239.4 Definitions.
(a) Armed Forces. The Army, Navy, Air Force, Marine Corps, and
Coast Guard (see section 101(a) of title 10, U.S.C., as stipulated in
section 1001(p) of Public Law 111-5).
(b) Closing costs. Sellers' closing costs typically include: loan
payoff fees; the real estate commission; title insurance; all or part
of transfer taxes and escrow fees, if there are any; attorney's fees
where applicable; and other fees set by local custom. HAP pays sellers'
closing costs that are customary for the region where the home is
located. Applicant's realtor or lender can provide the applicant with
the normal closing costs for his/her region. HAP will reimburse the
seller for limited contributions made to the buyer's portion of closing
costs, including appraisal cost and realtor fees.
(c) Deficiency judgment. Judicial recognition of personal liability
under applicable state law against a Service member whose property was
foreclosed on or who otherwise passed title to another person for a
primary residence through a sale that realized less than the full
outstanding mortgage balance.
(d) Deployment. Performing service in a training exercise or
operation at a location or under circumstances that make it impossible
or infeasible for the member to spend off-duty time in the housing in
which the member resides when on garrison or installation duty at the
member's permanent duty station, or home port, as the case may be.
(e) Eligible mortgage. A mortgage secured by the primary residence
that was incurred to acquire or improve the primary residence. For a
mortgage refinancing the original mortgage(s) or for a mortgage
incurred subsequent to purchasing the property, funds from the
refinanced or subsequent mortgages must be traced to the purchase of
the primary residence or have been used to improve the primary
residence. Home improvements that are documented (even if not financed
through a subsequent mortgage or line of credit) may be added to the
purchase price of the primary residence. Funds from a refinanced or
subsequent mortgage that were used for other purposes are not eligible
and may not be considered. Benefits will be calculated using the amount
of $729,750 for primary residences with an eligible mortgage that
exceeds $729,750. The total benefit payable (excluding allowable
closing costs) shall not exceed $729,750. The ARRA expanded HAP
calculates PFMV as the purchase price plus improvements. Improvements
are identified in the Internal Revenue Publication 523 (http://www.irs.gov/publications/p523/ar02.html) which outlines items
considered home improvements and distinguishes improvements from
repairs and maintenance.
(f) Forward deployment. Performing service in an area where the
Secretary of Defense or the Secretary's designee has determined that
Service members are subject to hostile fire or imminent danger under
section 310(a)(2) of title 37, U.S.C.
(g) Primary residence. The one- or two-family dwelling from which
employees or members regularly commute (or commuted) to their primary
place of duty. Under Sec. 239.6(a) and (b) of this part, the relevant
property for which compensation might be offered must have been the
primary residence of the member or civilian employee at the time of the
relevant wound, injury, or illness. The first field grade officer (or
civilian equivalent) in the member or employee's chain of command may
certify primary residence status.
(h) Prior Fair Market Value (PFMV). The PFMV is the purchase price
of the primary residence. Benefits will be calculated using the amount
of $729,750 as the PFMV for primary residences with a PFMV that exceeds
$729,750.
(i) Purchase. Purchase occurs when the applicant enters into a
contract for the purchase of the property. In the absence of a contract
for purchase, the purchase occurs when the applicant closes on the
property.
(j) Reasonable effort to sell. Applicant's primary residence must
be listed, actively marketed, and available for purchase for a minimum
of 120 days. With regard to marketing, applicant must demonstrate that
the asking price was within the current market value of the home as
determined by the HQUSACE automated value model (AVM) for no less than
30 days. It is the applicant's responsibility to explain marketing
efforts by detailing how the asking price was gradually reduced until
it reached the true current fair market value (e.g., maintaining a log
containing date and asking price recorded over period of time
indicating number of visits by prospective buyers and offers to
purchase). If an applicant is unable to sell the primary residence, the
HQUSACE will determine whether efforts to sell were reasonable.
(k) Permanent Change of Station (PCS). The assignment or transfer
of a member to a different permanent duty station (PDS), to include
relocation to place of retirement, when retirement is mandatory, under
a competent authorization/order that does not specify the duty as
temporary, provide for further assignment to a new PDS, or direct the
military service member return to the old PDS.
Sec. 239.5 Benefit elections.
Section 3374 of title 42, U.S.C., as amended by section 1001 of the
ARRA, Public Law 111-5, authorizes the Secretary of Defense, under
specified conditions, to acquire title to, hold, manage, and dispose
of, or, in lieu thereof, to reimburse for certain losses upon private
sale of, or foreclosure against, any property improved with a one- or
two-family dwelling owned by designated individuals.
(a) General benefits. (1) If an applicant is unable to sell the
primary residence after demonstrating reasonable efforts to sell (see
Definitions, Sec. 239.4(i) of this part), the Government may purchase
the primary residence for the greater of:
(i) The applicable percentage (identified by applicant type in
Sec. 239.5(a)(4) of this part) of the Prior Fair Market Value (PFMV)
of the primary residence, or
(ii) The total amount of the eligible mortgage(s) that remains
outstanding; however, the benefit payable (excluding allowable closing
costs) shall not exceed $729,750.
(2) If an applicant sells, has sold, or otherwise has transferred
title of the primary residence, the benefit calculation shall be the
amount of closing costs plus an amount not to exceed the difference
between the applicable percentage of the PFMV and the sales price.
(3) If an applicant is foreclosed upon, the benefit will pay all
legally enforceable liabilities directly associated with the foreclosed
mortgage (e.g., a deficiency judgment).
(4) Applicable percentages. (i) If an applicant is eligible under
Sec. 239.6(a)(1) or (2) of this part, and sells the primary residence,
the applicable percentage shall be 95 percent of the PFMV. In addition,
closing costs incurred on the sale may be reimbursed.
(ii) If an applicant is eligible under Sec. 239.6(a)(1) or (2) of
this part, and is
[[Page 69875]]
unable to sell the primary residence after demonstrating reasonable
efforts to sell, the applicable percentage shall be 90 percent of the
PFMV. Closing costs incurred on the sale may be reimbursed.
(iii) If an applicant is eligible under Sec. 239.6(a)(3) or (4) of
this part and sells the primary residence, the applicable percentage
shall be 90 percent of the PFMV. In addition, closing costs incurred on
the sale may be reimbursed.
(iv) If an applicant is eligible under Sec. 239.6(a)(3) or (4) of
this part and is unable to sell the primary residence after
demonstrating reasonable efforts to sell, the applicable percentage
shall be 75 percent of the PFMV. As noted under paragraph (a)(1) of
this section, however, the applicant may instead be eligible for
payment of the eligible mortgage outstanding.
(b) Rules applicable to all benefit calculations. (1) Prior to
making any payment, the Government must determine that title to the
property has been transferred or will be transferred as the result of
making such payment. If the Government determines that making a benefit
payment will not result in the transfer of title to the property, no
payment will be made.
(2) A short sale will be treated as a private sale. If an applicant
remains personally liable for a deficiency between the outstanding
mortgage and the sale price, the amount of this deficiency may be
included in the benefit, provided that the total amount of the benefit
does not exceed the difference between 90 percent of the PFMV and the
sales price.
(c) Payment of benefits. (1) Private sale: Where a benefit payment
exceeds funds required to clear the mortgage and pay closing costs, the
amount exceeding the mortgage and closing costs will be paid directly
to the applicant. In the case of a short sale, if an applicant remains
personally liable for a deficiency between the outstanding mortgage and
the sale price, that deficiency shall be paid directly to the lender on
behalf of the applicant. If the applicant was fully released from
liability after a short sale, no benefit shall be paid to either the
applicant or lender.
(2) Government purchase: Benefit is paid directly to the lender in
exchange for government possession of the property. Since the benefit
reimburses the applicant a percentage of the applicant's purchase
price, if the benefit exceeds the mortgage payoff amount, the applicant
will receive a benefit payment for the difference between the mortgage
payoff and the total benefit payment. If the applicant has a buyer for
the home, the payment of real estate commissions when an applicant's
mortgage exceeds the property's current fair market value (i.e., upside
down) will be accomplished as follows:
(i) Commission will be at the normal and customary rate for the
area (normally six percent) on the price agreed upon by the applicant
and the buyer and to whom the Government will then sell the home. While
the commission payment is the responsibility of the applicant, the
Government will make the commission payment for the applicant when the
home is sold by the Government to the applicant's buyer contingent upon
both the Government acquisition and Government sale contract
transactions being completed and recorded. Commissions will be paid to
the broker listing the property. The allocation of dollars to real
estate agents will be the responsibility of the listing broker.
(ii) After Government acquisition, the Government will then sell
the property to the buyer found by the applicant.
(iii) No other payment of fees or commissions will be made without
the prior approval of HQUSACE.
(3) Foreclosure: In the case of a foreclosure, benefit is paid to
lien holder for legally enforceable liabilities.
(d) Tax Implications. 26 U.S.C. 132(n) exempts Expanded HAP
benefits from Federal taxes and is not subject to withholding.
Sec. 239.6 Eligibility.
(a) Eligibility by Category. Those eligible for benefits under the
Expanded HAP include the following categories of persons:
(1) Wounded, Injured, or Ill. (i) Members of the Armed Forces:
(A) Who receive a disability rating of 30% or more for an unfitting
condition (using the Department of Veterans Affairs Schedule for
Ratings Disabilities), or who are eligible for Service member's Group
Life Insurance Traumatic Injury Protection Program, or whose treating
physician (in a grade of at least captain in the Navy or Coast Guard or
colonel in Army, Marine Corps, or Air Force) certifies that the member
is likely, by a preponderance of the evidence, to receive a disability
rating of 30 percent or more for an unfitting condition (using the
Department of Veterans Affairs Schedule for Ratings Disabilities) for
wounds, injuries, or illness incurred in the line of duty while
deployed, on or after September 11, 2001, and
(B) Who are reassigned in furtherance of medical treatment or
rehabilitation, or due to retirement in connection with such
disability, and
(C) Who need to market the primary residence for sale due to the
wound, injury, or illness. (For example, the need to be closer to a
hospital or a family member caregiver or the need to find work more
accommodating to the disability.)
(ii) Civilian employees of DoD or the United States Coast Guard
(excluding temporary employees or contractors, but including employees
of non-appropriated fund instrumentalities):
(A) Who suffer a wound, injury, or illness (not due to own
misconduct), on or after September 11, 2001, in the performance of
duties while forward deployed in support of the Armed Forces, whose
treating physician provides written documentation that the individual,
by a preponderance of the evidence, meets the criteria for a disability
rating of 30 percent or more. As described in paragraph (a)(1) of this
section, this documentation will be certified by a physician in the
grade of at least captain in the Navy or Coast Guard or colonel in
Army, Marine Corps, or Air Force.
(B) Who relocate from their primary residence in furtherance of
medical treatment, rehabilitation, or due to medical retirement
resulting from the wound, injury, or illness, and
(C) Who need to market the primary residence for sale due to the
wound, injury, or illness. (For example, the need to be closer to a
hospital or a family member caregiver or the need to find work more
accommodating to the disability.)
(2) Surviving spouse. The surviving spouse of a Service member or
of a civilian employee:
(i) Whose spouse dies as the result of a wound, injury, or illness
incurred in the line of duty while deployed (or forward deployed for
civilian employees) on or after September 11, 2001, and
(ii) Who relocates from the member's or civilian employee's primary
residence within two years of the death of spouse.
(3) BRAC 2005 members and civilian employees. Members of the Armed
Forces and civilian employees of the Department of Defense and the
United States Coast Guard (not including temporary employees or
contractors) and employees of non-appropriated fund instrumentalities
meeting the assignment requirements of Sec. 239.6(b)(4)(i)(A) of this
part and who have not previously received HAP benefit payments:
(i) Whose position is eliminated or transferred because of the
realignment or closure; and
[[Page 69876]]
(ii) Who accepts employment or is required to relocate because of a
transfer beyond the normal commuting distance from the primary
residence (50 miles). The new residence must be within 50 miles of the
new duty station.
(4) Permanently reassigned members of the Armed Forces. Members who
have not previously received HAP benefit payments and who are
reassigned under permanent PCS orders:
(i) Dated between February 1, 2006, and September 30, 2012 (subject
to availability of funds),
(ii) To a new duty station or home port outside a 50-mile radius of
the member's former duty station or home port.
(b) Eligibility based on economic impact, timing, price, orders,
and submission of application. (1) Minimum economic impact. (i) BRAC
2005 Members and Civilian Employees as well as permanently reassigned
members of the Armed Forces whose primary residence have suffered at
least a 10 percent personal home value loss from the date of purchase
to date of sale. Market value of the home will be verified by the
USACE.
(ii) Applicants qualifying as Wounded, Injured, or Ill or as
surviving spouse do not need to show minimum economic impact.
(2) Timing of purchase and sale. (i) BRAC 2005 Members and Civilian
Employees must have been the owner-occupant of their primary residence
before May 13, 2005, the date of the BRAC 2005 announcement or have
vacated the owned residence as a result of being ordered into on-post
housing after November 13, 2004. An owner-occupant is someone who has
both purchased and resides in the residence.
(ii) Permanently reassigned members of the Armed Forces must have
purchased their primary residence before July 1, 2006.
(iii) Wounded, injured, or ill members and employees and Surviving
Spouses are eligible for compensation without respect to the date of
purchase.
(iv) BRAC 2005 Members and Civilian employees and permanently
reassigned members must have sold their primary residence between July
1, 2006 and September 30, 2012.
(3) Maximum home prior fair market value and eligible mortgage.
When calculating benefits, both the PFMV and the eligible mortgage will
be capped at $729,750.
(4) Date of assignment; report date; basis for relocation. (i) Date
of assignment, report date. (A) BRAC 2005 Members and Civilian
Employees must have been assigned to an installation or unit identified
for closure or realignment under the 2005 round of the Base Realignment
and Closure Act of 1990 on May 13, 2005; transferred from such an
installation or unit, or employment terminated as a result of a
reduction in force, after November 13, 2004; or transferred from such
an installation or activity on an overseas tour after May 13, 2002.
BRAC 2005 Members transferred from such an installation or activity
after May 13, 2005, are also eligible if, in connection with that
transfer the member was informed of a future, programmed reassignment
to the installation.
(B) For initial implementation, permanently reassigned members of
the Armed Forces must have received qualifying orders to relocate dated
between February 1, 2006, and September 30, 2010. These dates may be
extended to September 30, 2012, at the discretion of the DUSD(I&E)
based on availability of funds.
(ii) Basis for relocation: Permanently reassigned members of the
Armed Forces who are reassigned or who otherwise relocate for the
following reasons are not eligible for Expanded HAP benefits:
(A) Members who voluntarily retire prior to reaching their
mandatory retirement date.
(B) Members who are a new accession into the Armed Forces or who
are otherwise entering active duty.
(C) Members who are voluntarily separated or discharged.
(D) Members whose separation or discharge is characterized as less
than honorable.
(E) Members who request and receive voluntary release from active
duty (REFRAD).
(F) Members who are REFRAD for misconduct or poor performance.
(c) Applications will be processed according to eligibility
category in the following order: (1) Wounded, injured, and ill. Within
this category, applications will generally be processed in
chronological order of the wound, injury, or illness.
(2) Surviving spouses. Within this category, applications will
generally be processed in chronological order of the date of death of
the member or employee.
(3) BRAC 2005 members and civilian employees. Within this category,
applications will generally be processed in chronological order of the
date of job elimination.
(4) Permanently reassigned members of the Armed Forces. Within this
category, applications will generally be processed beginning with the
earliest report-not-later-than date of PCS orders.
Sec. 239.7 Responsibilities.
(a) The DUSD(I&E), under the authority, direction, and control of
the USD(AT&L), shall, in relation to the Expanded HAP:
(1) Prescribe and monitor administrative and operational policies
and procedures.
(2) Determine applicable personnel benefits and policies, in
coordination with the Under Secretary of Defense (Comptroller) and the
Under Secretary of Defense for Personnel and Readiness.
(3) Serve as senior appeals authority for appeals submitted by
applicants.
(b) The Under Secretary of Defense (Comptroller) shall, in relation
to the Expanded HAP:
(1) Implement policies and prescribe procedures for financial
operations.
(2) Review and approve financial plans and budgets.
(3) Issue financing and obligation authorities.
(4) Administer the DoD Homeowners Assistance Fund.
(c) The Deputy Assistant Secretary of the Army for Installations
and Housing (DASA(I&H)), subject to review by the DUSD(I&E), as the DoD
Executive Agent for administering, managing, and executing the HAP,
shall:
(1) Establish detailed policies and procedures for execution of the
program.
(2) Maintain necessary records, prepare reports, and conduct
audits.
(3) Publish regulations and forms.
(4) Disseminate information on the program.
(5) Forward copies of completed responses to congressional
inquiries and appeals to the DUSD(I&E) for information.
(6) Serve as the initial approval authority for HAP appeals. The
DASA(I&H) may approve appeals and shall forward recommendations for
Expanded HAP denial to the DUSD(I&E) for decision.
(d) The Heads of the DoD Components and the Commandant of the Coast
Guard, by agreement of the Secretary of Homeland Security, shall:
(1) Designate at least one representative at the headquarters level
to work with DASA(I&H) and HQUSACE HAP offices.
(2) Require each installation to establish a liaison with the
nearest HAP field office to obtain guidance or assistance on the HAP.
(3) Supply the HQUSACE HAP office a copy of any internal
regulation, instruction, or guidance published relative to the Expanded
HAP program.
(4) Disseminate information on the Expanded HAP and, upon request,
supply HAP field offices with data pertaining to the Expanded HAP.
[[Page 69877]]
(e) HQUSACE. (1) Real Estate Community of Practice (CEMP-CR). The
Director of Real Estate, acting for the Chief of Engineers, has been
delegated authority and responsibility for the execution of HAP. CEMP-
CR, as the central office for HAP, is responsible for the following:
(i) Supervision, interagency coordination, development of
procedures, policy guidance, and processing of appeals forwarded from
the districts and HQUSACE Major Subordinate Commands (MSC).
(ii) Maintaining an Expanded HAP central office and Expanded HAP
field offices.
(iii) Processing appeals from the MSC where applicant agreement
cannot be reached. Such appeals will be forwarded, in turn, to
DASA(I&H) for consideration.
(2) Districts. Districts designated by the Director of Real Estate,
and their Chiefs of Real Estate, have been delegated the authority to
administer, manage, and execute the HAP on behalf of all applicants.
Districts (as identified in Sec. 239.9 of this part) are responsible
for the following:
(i) Accepting applications (DD Form 1607) for HAP and Expanded HAP
benefits.
(ii) Determining the eligibility of each applicant for Expanded HAP
assistance using the criterion established by the DUSD(I&E).
(iii) Determining and advising each applicant on the most
appropriate type of assistance.
(iv) Determining amounts to be paid, consistent with DoD policy,
and making payments or authorizing and arranging for acquisition or
transfer of the applicant's property.
(v) Maintaining, managing, and disposing of acquired properties or
contracting for such services with private contractors.
(vi) Processing all appeals, except where applicant agreement
cannot be reached. Such appeal cases will be forwarded, in turn, to the
MSC, CEMP-CR, and DASA(I&H) for consideration.
(3) HQUSACE Major Subordinate Commands (MSC). MSCs have been
delegated the authority to perform oversight and review of district
program management and based upon that review, or in response to
specific requests, to provide local policy guidance to the districts
and recommend program changes or forward appeals to CEMP-CR for
consideration.
Sec. 239.8 Funding.
(a) Revolving fund account. The revolving fund account contains
money appropriated in accordance with the ARRA, and receipts from the
management, rental, or sale of the properties acquired.
(b) Appropriation, receipts, and allocation. Funds required for
administration of the program will be made available by DoD to the
HQUSACE. Funds provided will be used for purchase or reimbursement as
provided herein and to defray expenses connected with the acquisition,
management, and disposal of acquired properties, including payment of
mortgages or other indebtedness, as well as the cost of staff services,
contract services, Title Insurance, and other indemnities.
(c) Obligation of funds. For government acquisition of homes under
the authority of this Rule, funds will be committed prior to the
Government's offer to purchase is conveyed to the applicant. The
obligation will occur upon timely receipt of the accepted offer
returned by the applicant.
Sec. 239.9 Application processing procedures.
(a) Acceptance of applications. The district will accept
applications (DD Form 1607) for HAP and Expanded HAP benefits submitted
through the U.S. Mail or other delivery system direct to the
appropriate district office. See Sec. 239.15 of this part for a list
of District field offices.
(b) Application Form (DD Form 1607). Should the DD form 1607 not
provide all the information required to process Expanded HAP
applications, Districts must provide applicants appropriate
supplemental instructions.
(c) Assignment of application numbers. (1) Assignment of
application numbers. When a District receives an application, it will
assign the application number and develop and maintain an individual
file for each property. Applications for programs located in another
District will not be assigned a number, but will be forwarded
immediately to the District having jurisdiction. An application number,
once assigned, will not be reassigned regardless of the disposition of
the original application. Reactivation or reopening of a withdrawn
application does not require a new application or application number.
(2) Method of assignment. An application will be numbered in the
following manner:
(i) Agency code. Code to indicate the Federal agency accountable
for installation being closed or applicant support:
(A) 1--Army
(B) 2--Air Force
(C) 3--Navy
(D) 4--Marine Corps
(E) 5--Defense Agencies
(F) 6--Non-Defense Agencies
(G) 7--U.S. Coast Guard
(ii) District code.
(A) Sacramento: L2
(B) Savannah: K6
(C) Fort Worth: M2
(iii) Applicant category code (military/civilian/wounded/surviving
spouse/PCS):
(A) 1 = Civilian (BRAC)
(B) 2 = Military (BRAC)
(C) 3 = Non-appropriated Fund Instrumentalities
(D) 4 = Military Wounded
(E) 5 = Civilian Wounded
(F) 6 = Surviving Spouse (military deceased)
(G) 7 = Surviving Spouse (civilian employee deceased)
(H) 8 = Military PCS
(iv) State: State abbreviation.
(v) Installation number: The five digit ZIP Code of the applicant's
present (former, if they have already moved) installation, offices, or
unit address. Examples are:
(A) For a BRAC 05 applicant moving from the closing Saint Louis,
Missouri, DFAS office to Minneapolis, Minnesota, use the ZIP Code of
the city from which he or she is moving, e.g., 63101, for St. Louis,
Missouri.
(B) For wounded warrior or surviving spouse who moved from primary
residence, use present installation or home town.
(C) For Service members who are eligible based on PCS criteria, use
ZIP Code of installation from which they depart.
(vi) Application Number: Sequential beginning with 0001.
Example 1:
2 K6 2 NH0 3 8 0 30 0 0 1
Air Force-SAS Dist.-Mil BRAC-NH-Pease AFB-Applicant
Example 2:
1-K 6- 4- NY-1 3 6 0 2-0 0 0 2
Army-SAS Dist-Mil Wounded-NY-Ft Drum-Applicant
(d) Real Estate Values. (1) Because the PFMV is the purchase price
for Expanded HAP, no appraisal of the property is required. Supporting
documentation to establish purchase price must be furnished by the
applicant. Generally, Form HUD-1 will suffice.
(2) Districts are responsible for ensuring primary residence values
are appropriate and applicants receive deserved benefit payments.
Districts will use the CoreLogic AVM to determine the valuation of
individual primary residences.
[[Page 69878]]
Sec. 239.10 Management controls.
(a) Management systems. Headquarters, USACE has an existing
information management system that manages all information related to
the HAP program.
(1) HAPMIS. The Homeowners Assistance Program Management
Information System (HAPMIS) provides program management assistance to
field offices and indicators to managers at field offices, regional
headquarters and HQUSACE at the Service Member level of detail. The
Privacy Act applies to this program and the management information
system to protect the privacy of Expanded HAP applicant information.
(2) CEFMS. The Corps of Engineers Financial Management System
(CEFMS) provides detailed funds execution and tracking, to include:
(i) Funds issued to field offices for execution accountability.
(ii) Funds committed and obligated by applicant category,
installation, state and county.
(b) System of Records Notice (SORN). The Privacy Act limits
agencies to maintaining ``only such information about an individual as
is relevant and necessary to accomplish a purpose of the agency
required to be accomplished by statute or Executive order of the
President.'' 5 U.S.C. 552a(e)(1). The SORN for the Homeowners
Assistance Program can be found at http://www.defenselink.mil/privacy/notices/army/A0405-10q_CE.shtml. The Privacy Impact Assessment for the
system can be reviewed at: http://www.army.mil/ciog6/privacy.html.
Individuals seeking to determine whether information about them is
contained in this system should address written inquiries to the Chief
of Engineers, Headquarters U.S. Army Corps of Engineers, Attn: CERE-R,
441 G Street, NW., Washington, DC 20314-1000.
Sec. 239.11 Appeals.
Applicant appeals will be processed at the district level and
forwarded through HQUSACE for review. The HQUSACE may approve an appeal
but must forward any recommendation for denial to the DASA(I&H) for
review and consideration. DASA(I&H) may approve an appeal but must
forward recommendations for denial to the DUSD(I&E) for decision. The
DUSD(I&E) is the senior appeals authority for appeals submitted by
applicants.
Sec. 239.12 Tax documentation.
For disbursed funds, tax documents (if necessary) will be certified
by HQUSACE Finance Center and distributed to applicants and the
Internal Revenue Service (IRS) annually.
Sec. 239.13 Program performance reviews.
HQUSACE will prepare monthly program performance reviews using the
HAPMIS; HQUSACE Annual Management Command Plan and Management Control
Checklist. In addition, program monitoring will also be conducted
(through HAPMIS and CEFMS reports) at the Headquarters Department of
the Army and at the DUSD(I&E) levels.
Sec. 239.14 On-site inspections.
The HQUSACE and its major subordinate commands may conduct periodic
on-site inspections of district offices and monitor program execution
through HAPMIS and CEFMS reports.
Sec. 239.15 List of HAP field offices.
------------------------------------------------------------------------
Field office For installations located in:
------------------------------------------------------------------------
U.S. Army Engineer District, Alaska, Arizona, California,
Sacramento, CESPK, 1325 J Street, Nevada, Utah, Idaho, Oregon,
Sacramento, CA 95814-2922, (916) 557- Washington, Montana, Pacific
6850 OR, 1-800-811-5532, Internet Ocean Rim, and Hawaii.
Address: http://www.spk.usace.army.mil.
U.S. Army Engineer District, Savannah, Alabama, Georgia, North
CESAS, Attn: RE-AH, P.O. Box 889, Carolina, South Carolina,
Savannah, GA 31402-0889, 1-800-861- Florida, Ohio, Illinois,
8144, Internet Address: http:// Indiana, Maryland, Delaware,
www.sas.usace.army.mil. Michigan, Kentucky, District
of Columbia, Virginia,
Pennsylvania, Tennessee, New
Hampshire, Rhode Island, New
York, Vermont, Mississippi,
Massachusetts, Connecticut,
Maine, New Jersey, West
Virginia and Europe.
U.S. Army Engineer District, Fort Arkansas, Louisiana, Oklahoma,
Worth, CESWF, P.O. Box 17300, Fort Texas, New Mexico, Colorado,
Worth, TX 76102-0300, (817) 886-1112, Iowa, Nebraska, Michigan,
1-888-231-7751, Internet Address: Minnesota, North and South
http://www.swf.usace.army.mil. Dakota, Wisconsin, Wyoming,
Kansas, and Missouri.
------------------------------------------------------------------------
HAP CENTRAL OFFICE, Homeowners Assistance Program, HQ U.S. Army
Corps of Engineers Real Estate Directorate, Military Division, 441 G
Street, NW., Washington, DC 20314-1000.
Dated: November 10, 2010.
Morgan F. Park,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2010-28756 Filed 11-15-10; 8:45 am]
BILLING CODE 5001-06-P