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Notice

Mortgage and Loan Insurance Programs Under the National Housing Act-Debenture Interest Rates

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Start Preamble

AGENCY:

Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.

ACTION:

Notice.

SUMMARY:

This notice announces changes in the interest rates to be paid on debentures issued with respect to a loan or mortgage insured by the Federal Housing Administration under the provisions of the National Housing Act (the Act). The interest rate for debentures issued under section 221(g)(4) of the Act during the 6-month period beginning January 1, 2013, is 13/8 percent. The interest rate for debentures issued under any other provision of the Act is the rate in effect on the date that the commitment to insure the loan or mortgage was issued, or the date that the loan or mortgage was endorsed (or initially endorsed if there are two or more endorsements) for insurance, whichever rate is higher. The interest rate for debentures issued under these other provisions with respect to a loan or mortgage committed or endorsed during the 6-month period beginning January 1, 2013, is 21/2 percent. However, as a result of an amendment to section 224 of the Act, if an insurance claim relating to a mortgage insured under sections 203 or 234 of the Act and endorsed for insurance after January 23, 2004, is paid in cash, the debenture interest rate for purposes of calculating a claim shall be the monthly average yield, for the month in which the default on the mortgage occurred, on United States Treasury Securities adjusted to a constant maturity of 10 years.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Yong Sun, Department of Housing and Urban Development, 451 Seventh Street SW., Room 5148, Washington, DC 20410-8000; telephone (202) 402-4778 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number through TTY by calling the toll-free Federal Information Relay Service at (800) 877-8339.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Section 224 of the National Housing Act (12 U.S.C. 1715o) provides that debentures issued under the Act with respect to an insured loan or mortgage (except for debentures issued pursuant to section 221(g)(4) of the Act) will bear interest at the rate in effect on the date the commitment to insure the loan or mortgage was issued, or the date the loan or mortgage was endorsed (or initially endorsed if there are two or more endorsements) for insurance, whichever rate is higher. This provision is implemented in HUD's regulations at 24 CFR 203.405, 203.479, 207.259(e)(6), and 220.830. These regulatory provisions state that the applicable rates of interest will be published twice each year as a notice in the Federal Register.

Section 224 further provides that the interest rate on these debentures will be set from time to time by the Secretary of HUD, with the approval of the Secretary of the Treasury, in an amount not in excess of the annual interest rate determined by the Secretary of the Treasury pursuant to a statutory formula based on the average yield of all outstanding marketable Treasury obligations of maturities of 15 or more years.

The Secretary of the Treasury (1) has determined, in accordance with the provisions of section 224, that the statutory maximum interest rate for the period beginning January 1, 2013, is 21/2 percent; and (2) has approved the establishment of the debenture interest rate by the Secretary of HUD at 21/2 percent for the 6-month period beginning January 1, 2013. This interest rate will be the rate borne by debentures issued with respect to any insured loan or mortgage (except for debentures issued pursuant to section 221(g)(4)) with insurance commitment or endorsement date (as applicable) within the first 6 months of 2013.

For convenience of reference, HUD is publishing the following chart of debenture interest rates applicable to mortgages committed or endorsed since January 1, 1980:

Effective interest rateOn or afterPrior to
9 1/2Jan. 1, 1980July 1, 1980
97/8July 1, 1980Jan. 1, 1981
113/4Jan. 1, 1981July 1, 1981
127/8July 1, 1981Jan. 1, 1982
123/4Jan. 1, 1982Jan. 1, 1983
101/4Jan. 1, 1983July 1, 1983
103/8July 1, 1983Jan. 1, 1984
111/2Jan. 1, 1984July 1, 1984
133/8July 1, 1984Jan. 1, 1985
115/8Jan. 1, 1985July 1, 1985
111/8July 1, 1985Jan. 1, 1986
101/4Jan. 1, 1986July 1, 1986
81/4July 1, 1986Jan. 1. 1987
8Jan. 1, 1987July 1, 1987
9July 1, 1987Jan. 1, 1988
91/8Jan. 1, 1988July 1, 1988
93/8July 1, 1988Jan. 1, 1989
91/4Jan. 1, 1989July 1, 1989
9July 1, 1989Jan. 1, 1990
81/8Jan. 1, 1990July 1, 1990
9July 1, 1990Jan. 1, 1991
83/4Jan. 1, 1991July 1, 1991
81/2July 1, 1991Jan. 1, 1992
8Jan. 1, 1992July 1, 1992
8July 1, 1992Jan. 1, 1993
Start Printed Page 4428
73/4Jan. 1, 1993July 1, 1993
7July 1, 1993Jan. 1, 1994
65/8Jan. 1, 1994July 1, 1994
73/4July 1, 1994Jan. 1, 1995
83/8Jan. 1, 1995July 1, 1995
71/4July 1, 1995Jan. 1, 1996
61/2Jan. 1, 1996July 1, 1996
71/4July 1, 1996Jan. 1, 1997
63/4Jan. 1, 1997July 1, 1997
71/8July 1, 1997Jan. 1, 1998
63/8Jan. 1, 1998July 1, 1998
61/8July 1, 1998Jan. 1, 1999
51/2Jan. 1, 1999July 1, 1999
61/8July 1, 1999Jan. 1, 2000
61/2Jan. 1, 2000July 1, 2000
61/2July 1, 2000Jan. 1, 2001
6Jan. 1, 2001July 1, 2001
57/8July 1, 2001Jan. 1, 2002
51/4Jan. 1, 2002July 1, 2002
53/4July 1, 2002Jan. 1, 2003
5Jan. 1, 2003July 1, 2003
41/2July 1, 2003Jan. 1, 2004
51/8Jan. 1, 2004July 1, 2004
51/2July 1, 2004Jan. 1, 2005
47/8Jan. 1, 2005July 1, 2005
41/2July 1, 2005Jan. 1, 2006
47/8Jan. 1, 2006July 1, 2006
53/8July 1, 2006Jan. 1, 2007
43/4Jan. 1, 2007July 1, 2007
5July 1, 2007Jan. 1, 2008
41/2Jan. 1, 2008July 1, 2008
45/8July 1, 2008Jan. 1, 2009
41/8Jan. 1, 2009July 1, 2009
41/8July 1, 2009Jan. 1, 2010
41/4Jan. 1, 2010July 1, 2010
41/8July 1, 2010Jan. 1, 2011
37/8Jan. 1, 2011July 1, 2011
41/8July 1, 2011Jan. 1, 2012
27/8Jan. 1, 2012July 1, 2012
23/4July 1, 2012Jan. 1, 2013
21/2Jan. 1, 2013July 1, 2013

Section 215 of Division G, Title II of Public Law 108-199, enacted January 23, 2004 (HUD's 2004 Appropriations Act) amended section 224 of the Act, to change the debenture interest rate for purposes of calculating certain insurance claim payments made in cash. Therefore, for all claims paid in cash on mortgages insured under section 203 or 234 of the National Housing Act and endorsed for insurance after January 23, 2004, the debenture interest rate will be the monthly average yield, for the month in which the default on the mortgage occurred, on United States Treasury Securities adjusted to a constant maturity of 10 years, as found in Federal Reserve Statistical Release H-15. The Federal Housing Administration has codified this provision in HUD regulations at 24 CFR 203.405(b) and 24 CFR 203.479(b).

Section 221(g)(4) of the Act provides that debentures issued pursuant to that paragraph (with respect to the assignment of an insured mortgage to the Secretary) will bear interest at the “going Federal rate” in effect at the time the debentures are issued. The term “going Federal rate” is defined to mean the interest rate that the Secretary of the Treasury determines, pursuant to a statutory formula based on the average yield on all outstanding marketable Treasury obligations of 8- to 12-year maturities, for the 6-month periods of January through June and July through December of each year. Section 221(g)(4) is implemented in the HUD regulations at 24 CFR 221.255 and 24 CFR 221.790.

The Secretary of the Treasury has determined that the interest rate to be borne by debentures issued pursuant to section 221(g)(4) during the 6-month period beginning January 1, 2013, is 13/8 percent.

The subject matter of this notice falls within the categorical exemption from HUD's environmental clearance procedures set forth in 24 CFR 50.19(c)(6). For that reason, no environmental finding has been prepared for this notice.

Start Authority

Authority: Sections 211, 221, 224, National Housing Act, 12 U.S.C. 1715b, 1715l, 1715o; Section 7(d), Department of HUD Act, 42 U.S.C. 3535(d).)

End Authority Start Signature

Dated: January 8, 2013.

Carol J. Galante,

Assistant Secretary for Housing—Federal Housing Commissioner.

End Signature End Supplemental Information

[FR Doc. 2013-01187 Filed 1-18-13; 8:45 am]

BILLING CODE 4210-67-P