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

CourtHousing And Urban Development Department
Citation87 FR 14280
Published date14 March 2022
Record Number2022-05307
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.
                -----------------------------------------------------------------------
                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
                

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