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Federal Register / Vol. 86, No. 205 / Wednesday, October 27, 2021 / Rules and Regulations
k Shared credit union branch service center operations;
l Travel agency services;
m Trust and trust-related services:

n Real estate brokerage services;

q Loan origination, including originating, purchasing, selling, and holding any type of loan permissible for Federal credit unions to originate, purchase, sell, and hold, including the authority to purchase and sell participation interests that are permissible for Federal credit unions to purchase and sell; and r Other categories of activities as approved in writing by the NCUA and published on the NCUAs website. Once the NCUA has approved an activity and published that activity on its website, the NCUA will not remove that particular activity from the approved list or make substantial changes to the content or description of that approved activity, except through formal rulemaking procedures.
FR Doc. 202123322 Filed 102621; 8:45 am BILLING CODE 753501P

DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Part 570
FR6290N01

Section 108 Loan Guarantee Program:
Announcement of Fee To Cover Credit Subsidy Costs for FY 2022
Office of the Assistant Secretary for Community Planning and Development, Department of Housing and Urban Development HUD.
ACTION: Announcement of fee.
AGENCY:

This document announces the fee that HUD will collect from borrowers of loans guaranteed under HUDs Section 108 Loan Guarantee Program Section 108 Program to offset the credit subsidy costs of the guaranteed loans pursuant to commitments awarded in Fiscal Year 2022 in the event HUD is required or authorized by statute to do so, notwithstanding subsection m of section 108 of the Housing and Community Development Act of 1974.
DATES: Applicability date: November 26, 2021.
FOR FURTHER INFORMATION CONTACT: Paul Webster, Director, Financial Management Division, Office of Block Grant Assistance, Office of Community Planning and Development, U.S.
Department of Housing and Urban
lotter on DSK11XQN23PROD with RULES1

SUMMARY:

VerDate Sep<11>2014

18:39 Oct 26, 2021

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Development, 451 7th Street SW, Room 7282, Washington, DC 20410; telephone number 2024024563 this is not a tollfree number. Individuals with speech or hearing impairments may access this number through TTY by calling the tollfree Federal Relay Service at 800877
8339. FAX inquiries but not comments may be sent to Mr. Webster at 202708
1798 this is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Background The Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2015
division K of Pub. L. 113235, approved December 16, 2014 2015
Appropriations Act provided that the Secretary shall collect fees from borrowers, notwithstanding subsection m of such section 108, to result in a credit subsidy cost of zero for guaranteeing . . . Section 108 loans.
Section 108m of the Housing and Community Development Act of 1974
states that No fee or charge may be imposed by the Secretary or any other Federal agency on or with respect to a guarantee made by the Secretary under this section after February 5, 1988.
Identical language was continued or included in the Departments continuing resolutions and appropriations acts authorizing HUD to issue Section 108 loan guarantees during Fiscal Years FYs 2016, 2017, 2018, 2019, 2020, and 2021. The Fiscal Year FY 2022 HUD appropriations bill under consideration 1 also has identical language suspending the prohibition against charging fees for loans issued with Section 108 guarantees after February 5, 1988, and requiring that the Secretary collect fees from borrowers to result in a credit subsidy cost of zero for the Section 108 Program.
On November 3, 2015, HUD
published a final rule 80 FR 67626 that amended the Section 108 Program regulations at 24 CFR part 570 to establish additional procedures, including procedures for announcing the amount of the fee each fiscal year when HUD is required to offset the credit subsidy costs to the Federal Government to guarantee Section 108
loans. For FYs 2016, 2017, 2018, 2019, 2020, and 2021 HUD published notifications to set the fees.2
1 Division G, Title II of H.R. 4502, 117th Cong., under the heading Community Development Loan Guarantees Program Account.
2 80 FR 67634 November 3, 2015, 81 FR 68297
October 4, 2016, 82 FR 44518 September 25, 2017, 83 FR 50257 October 5, 2018, 84 FR 35299
July 23, 2019, and 85 FR 52479 August 26, 2020, respectively.

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II. FY 2022 Fee: 2.00 Percent of the Principal Amount of the Loan If authorized by statute, this document sets the fee for Section 108
loan disbursements under loan guarantee commitments awarded for FY
2022 at 2.00 percent of the principal amount of the loan. HUD will collect this fee from borrowers of loans guaranteed under the Section 108
Program to offset the credit subsidy costs of the guaranteed loans pursuant to commitments awarded in FY 2022 if the FY 2022 HUD appropriations bill under consideration is enacted, or if HUD is otherwise required or authorized by statute to collect fees from borrowers to offset the credit subsidy costs of the guaranteed loans, notwithstanding subsection m of section 108 of the Housing and Community Development Act of 1974
42 U.S.C. 5308m. For this fee announcement, HUD is not changing the underlying assumptions or creating new considerations for borrowers. The calculation of the FY 2022 fee uses a similar calculation model as the FY
2016, FY 2017, FY 2018, FY 2019, FY
2020, and FY 2021 fee notifications, but incorporates updated information regarding the composition of the Section 108 portfolio and the timing of the estimated future cash flows for defaults and recoveries. The calculation of the fee is also affected by the discount rates required to be used by HUD when calculating the present value of the future cash flows as part of the Federal budget process.
As described in 24 CFR 570.712b, HUDs credit subsidy calculation is based on the amount required to reduce the credit subsidy cost to the Federal Government associated with making a Section 108 loan guarantee to the amount established by applicable appropriation acts. As a result, HUDs credit subsidy cost calculations incorporated assumptions based on: 1
Data on default frequency for municipal debt where such debt is comparable to loans in the Section 108 loan portfolio;
2 data on recovery rates on collateral security for comparable municipal debt;
3 the expected composition of the Section 108 portfolio by end users of the guaranteed loan funds e.g., third-party borrowers and public entities; and 4
other factors that HUD determined were relevant to this calculation e.g., assumptions as to loan disbursement and repayment patterns.
Taking these factors into consideration, HUD determined that the fee for disbursements made under loan guarantee commitments awarded in FY
2022 will be 2.00 percent, which will be
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