DEPARTMENT OF HOUSING 
AND URBAN DEVELOPMENT 24 CFR Part 203 [Docket No. FR-4469-N-02] RIN 2502-AH38 
Withdrawal of Proposed Rule on Sources of Homeowner Downpayment Pursuant to Section 
203 of the National Housing Act AGENCY: Office of the Assistant Secretary for 
Housing-Federal Housing Commissioner, HUD. ACTION: Withdrawal of proposed rule. 
SUMMARY: This Notice withdraws a proposed rule that would have prohibited gifts 
from non-profit organizations being used for the mortgagor's investment in a mortgaged 
property if the organization received the funds for the gift either directly or 
indirectly from the seller. DATES: This notice is effective January 12, 2001. 
FOR FURTHER INFORMATION CONTACT: Vance Morris, Director, Home Mortgage Insurance 
Division, Room 9266, Department of Housing and Urban Development, 451 Seventh 
Street, SW, Washington, DC 20410-8000, (202) 708-2700 (this is not a toll-free 
number). For hearing-and speech- impaired persons, this number may be accessed 
via TTY (text telephone) by calling the Federal Information Relay Service at 1-800-877-8339. 
SUPPLEMENTARY INFORMATION: Background On September 14, 1999, HUD published in 
the Federal Register a proposed rule to establish standards for the use of gifts 
provided by non-profit organizations as a source of the mortgagor's investment 
in the mortgaged property. The regulation would have permitted certain gifts by 
non-profit corporations for use as the mortgagor's investment, but would have 
prohibited them whenever they were directly or indirectly derived from the seller 
of the property, or if the seller [[Page 2852]] paid other consideration or reimbursement 
to the nonprofit for making the gift. The comment period closed on November 15, 
1999. By the time of the close of the comment period, HUD received 1,871 comments. 
Only 21 of these comments favored the rule. The overwhelming majority of comments 
opposed the rule. Based on these public comments, HUD has determined to withdraw 
this proposed rule on sources of homeowner downpayment. Dated: January 2, 2001.