Mortgage and Loan Insurance Programs Under the National Housing Act-Debenture Interest Rates
| Published date | 14 March 2022 |
| Citation | 87 FR 14280 |
| Record Number | 2022-05307 |
| Section | Notices |
| Court | Housing And Urban Development Department |
Federal Register, Volume 87 Issue 49 (Monday, March 14, 2022)
[Federal Register Volume 87, Number 49 (Monday, March 14, 2022)]
[Notices]
[Pages 14280-14281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05307]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6312-N-01]
Mortgage and Loan Insurance Programs Under the National Housing
Act--Debenture Interest Rates
AGENCY: Office of the Assistant Secretary for Housing, HUD.
ACTION: Notice.
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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, 2022, is 1\1/2\ 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, 2022, is 1\7/8\
percent.
FOR FURTHER INFORMATION CONTACT: Elizabeth Olazabal, Department of
Housing and Urban Development, 451 Seventh Street SW, Room 5146,
Washington, DC 20410-8000; telephone (202) 402-4608 (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 Relay
Service at (800) 877-8339.
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, 2022, is 1\7/8\ percent; and
(2) has approved the establishment of the debenture interest rate by
the Secretary of HUD at 1\7/8\ percent for the 6-month period beginning
January 1, 2022. 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 2022).
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 rate On or after Prior to
------------------------------------------------------------------------
9\1/2\........................ Jan. 1, 1980........ July 1, 1980.
9\7/8\........................ July 1, 1980........ Jan. 1, 1981.
11\3/4\....................... Jan. 1, 1981........ July 1, 1981.
12\7/8\....................... July 1, 1981........ Jan. 1, 1982.
12\3/4\....................... Jan. 1, 1982........ Jan. 1, 1983.
10\1/4\....................... Jan. 1, 1983........ July 1, 1983.
10\3/8\....................... July 1, 1983........ Jan. 1, 1984.
11\1/2\....................... Jan. 1, 1984........ July 1, 1984.
13\3/8\....................... July 1, 1984........ Jan. 1, 1985.
11\5/8\....................... Jan. 1, 1985........ July 1, 1985.
11\1/8\....................... July 1, 1985........ Jan. 1, 1986.
10\1/4\....................... Jan. 1, 1986........ July 1, 1986.
8\1/4\........................ July 1, 1986........ Jan. 1. 1987.
8............................. Jan. 1, 1987........ July 1, 1987.
9............................. July 1, 1987........ Jan. 1, 1988.
9\1/8\........................ Jan. 1, 1988........ July 1, 1988.
9 \3/8\....................... July 1, 1988........ Jan. 1, 1989.
9\1/4\........................ Jan. 1, 1989........ July 1, 1989.
9............................. July 1, 1989........ Jan. 1, 1990.
8\1/8\........................ Jan. 1, 1990........ July 1, 1990.
9............................. July 1, 1990........ Jan. 1, 1991.
8\3/4\........................ Jan. 1, 1991........ July 1, 1991.
8\1/2\........................ July 1, 1991........ Jan. 1, 1992.
8............................. Jan. 1, 1992........ July 1, 1992.
8............................. July 1, 1992........ Jan. 1, 1993.
7\3/4\........................ Jan. 1, 1993........ July 1, 1993.
[[Page 14281]]
7............................. July 1, 1993........ Jan. 1, 1994.
6\5/8\........................ Jan. 1, 1994........ July 1, 1994.
7\3/4\........................ July 1, 1994........ Jan. 1, 1995.
8\3/8\........................ Jan. 1, 1995........ July 1, 1995.
7\1/4\........................ July 1, 1995........ Jan. 1, 1996.
6\1/2\........................ Jan. 1, 1996........ July 1, 1996.
7\1/4\........................ July 1, 1996........ Jan. 1, 1997.
6\3/4\........................ Jan. 1, 1997........ July 1, 1997.
7\1/8\........................ July 1, 1997........ Jan. 1, 1998.
6\3/8\........................ Jan. 1, 1998........ July 1, 1998.
6\1/8\........................ July 1, 1998........ Jan. 1, 1999.
5\1/2\........................ Jan. 1, 1999........ July 1, 1999.
6\1/8\........................ July 1, 1999........ Jan. 1, 2000.
6\1/2\........................ Jan. 1, 2000........ July 1, 2000.
6\1/2\........................ July 1, 2000........ Jan. 1, 2001.
6............................. Jan. 1, 2001........ July 1, 2001.
5\7/8\........................ July 1, 2001........ Jan. 1, 2002.
5\1/4\........................ Jan. 1, 2002........ July 1, 2002.
5\3/4\........................ July 1, 2002........ Jan. 1, 2003.
5............................. Jan. 1, 2003........ July 1, 2003.
4\1/2\........................ July 1, 2003........ Jan. 1, 2004.
5\1/8\........................ Jan. 1, 2004........ July 1, 2004.
5\1/2\........................ July 1, 2004........ Jan. 1, 2005.
4\7/8\........................ Jan. 1, 2005........ July 1, 2005.
4\1/2\........................ July 1, 2005........ Jan. 1, 2006.
4\7/8\........................ Jan. 1, 2006........ July 1, 2006.
5\3/8\........................ July 1, 2006........ Jan. 1, 2007.
4\3/4\........................ Jan. 1, 2007........ July 1, 2007.
5............................. July 1, 2007........ Jan. 1, 2008.
4\1/2\........................ Jan. 1, 2008........ July 1, 2008.
4\5/8\........................ July 1, 2008........ Jan. 1, 2009.
4\1/8\........................ Jan. 1, 2009........ July 1, 2009.
4\1/8\........................ July 1, 2009........ Jan. 1, 2010.
4 \1/4\....................... Jan. 1, 2010........ July 1, 2010.
4\1/8\........................ July 1, 2010........ Jan. 1, 2011.
3\7/8\........................ Jan. 1, 2011........ July 1, 2011.
4\1/8\........................ July 1, 2011........ Jan. 1, 2012.
2\7/8\........................ Jan. 1, 2012........ July 1, 2012.
2\3/4\........................ July 1, 2012........ Jan. 1, 2013.
2\1/2\........................ Jan. 1, 2013........ July 1, 2013.
2\7/8\........................ July 1, 2013........ Jan. 1, 2014.
3\5/8\........................ Jan. 1, 2014........ July 1, 2014.
3\1/4\........................ July 1, 2014........ Jan. 1, 2015.
3............................. Jan. 1, 2015........ July 1, 2015.
2\7/8\........................ July 1, 2015........ Jan. 1, 2016.
2\7/8\........................ Jan. 1, 2016........ July 1, 2016.
2\1/2\........................ July 1, 2016........ Jan. 1, 2017.
2\3/4\........................ Jan. 1, 2017........ July 1, 2017.
2\7/8\........................ July 1, 2017........ Jan. 1, 2018.
2\3/4\........................ Jan. 1, 2018........ July 1, 2018.
3\1/8\........................ July 1, 2018........ Jan. 1, 2019.
3\3/8\........................ Jan. 1, 2019........ July 1, 2019.
2\3/4\........................ July 1, 2019........ Jan. 1, 2020.
2\1/4\........................ Jan. 1, 2020........ July 1, 2020.
1\1/4\........................ July 1, 2020........ Jan. 1, 2021.
1\3/8\........................ Jan. 1, 2021........ July 1, 2021.
2\1/4\........................ July, 1 2021........ Jan. 1, 2022.
1\7/8\........................ Jan. 1, 2022........ July 1, 2022.
------------------------------------------------------------------------
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).
Similarly, section 520(a) of the National Housing Act (12 U.S.C.
1735d) provides for the payment of an insurance claim in cash on a
mortgage or loan insured under any section of the National Housing Act
before or after the enactment of the Housing and Urban Development Act
of 1965. The amount of such payment shall be equivalent to the face
amount of the debentures that would otherwise be issued, plus an amount
equivalent to the interest which the debentures would have earned,
computed to a date to be established pursuant to regulations issued by
the Secretary. The implementing HUD regulations for multifamily insured
mortgages at 24 CFR 207.259(e)(1) and (e)(6), when read together,
provide that debenture interest on a multifamily insurance claim that
is paid in cash is paid from the date of the loan default at the
debenture rate in effect at the time of commitment or endorsement (or
initial endorsement if there are two or more endorsements) of the loan,
whichever is higher.
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, 2022, is 1\1/2\ 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.
(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).)
Lopa P. Kolluri,
Principal Deputy Assistant Secretary, Office of Housing-Federal Housing
Administration.
[FR Doc. 2022-05307 Filed 3-11-22; 8:45 am]
BILLING CODE 4210-67-P
