New Proposed HUD Rule

Written By: Glenn Michaels

On August 5, 2015, The United States Department of Housing Development (HUD) announced a proposed rule change to amend its existing regulations regarding the equal participation of faith – based (religious) organizations in HUD programs.

The amendments are being undertaken to Executive Order (EO) 13559, Fundamental Principals and Policy Making Criteria for Partnerships with Faith – Based and Other Neighborhood organizations, which President Obama signed in November 2010. EO 13559 sets forth principles clarifying that religious providers are welcome to compete for Federal funding without loss of their religious identity and providing protections for program beneficiaries, including a referral process for beneficiaries who object to the religious character of an organization that operates a program with direct Federal funds. EO 13559 also established the Interagency Working Group on Faith – based and other Neighborhood Partnerships  (Working Group) for the purpose of reviewing and evaluating Federal agencies, existing regulations and policies, and developing a model set of regulations.

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In August 2013, the Office of Management and Budget (OMB) instructed agency heads to adopt regulatory chages and guidance consistent with model regulations and guidance developed by the Working Group. OMB emphasized the importance of uniform implementation of the principles of EO 13559 HUD’s proposed regulations are consistent with those being issued by the other Federal agencies, and amend HUD’s existing regulations to:

•    Define the following terms to distinguish between “direct” and “indirect” Federal financial Assistance in applying the rule: direct Federal financial assistance, Federal financial assistance, and indirect Federal financial assistance;
•    State that decisions about awards of Federal financial assistance must be free from political interference and must be made on the basis of merit, not on the basis of religion or religious belief;
•    Replace the term “inherently religious activities” with the term “explicitly religious activities,” and define the latter term to include “activities that involve overt religious content such as worship, religious instruction, or proselytization;”
•    Explain the responsibilities of intermediaries and define the term “intermediary;”
•    Require faith – based organizations that receive direct Federal financial assistance from HUD to carry out activities under a HUD program to provide written notice to beneficiaries describing certain religious liberty protections available to them; and
•    Describe the steps that must be taken to refer a beneficiary to an alternative provider when the beneficiary objects to the religious character of an organization carrying out activities under a HUD funded program.
The above rule changes can take sixty (60) days for comments prior to becoming the rule.

If you did not know it, religious institutions and organizations are allowed to participate in HUD programs to assist people of all faiths.


About The Author

Glenn Michaels - As an NAMP® staff writer, Glenn Michaels is a mortgage underwriting instructor for Mortgage Underwriter University (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. If you're interested in becoming a writer for NAMP®, please email us at:contact@mortgageprocessor.org.


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