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Home » 2013 Issues » 78 FR (07/24/2013) » 2013-17773. Mortgage and Loan Insurance Programs Under the National Housing Act-Debenture Interest Rates

  2013-17773. Mortgage and Loan Insurance Programs Under the National Housing Act-Debenture Interest Rates  

  • 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 July 1, 2013, is 13/4 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 July 1, 2013, is 27/8 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 July 1, 2013, is 27/8 percent; and (2) has approved the establishment of the debenture interest rate by the Secretary of HUD at 27/8 percent for the 6-month period beginning July 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 latter 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
    91/2Jan. 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
    Start Printed Page 44581
    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
    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
    27/8July 1, 2013Jan. 1, 2014

    Section 215 of Division G, Title II of Pub. L. 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 Start Printed Page 44582yield 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 July 1, 2013, is 13/4 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: July 18, 2013.

    Carol J. Galante,

    Assistant Secretary for Housing—Federal Housing Commissioner.

    End Signature End Supplemental Information

    [FR Doc. 2013-17773 Filed 7-23-13; 8:45 am]

    BILLING CODE 4210-67-P

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Document Information

Published:
07/24/2013
Department:
Housing and Urban Development Department
Entry Type:
Notice
Action:
Notice.
Document Number:
2013-17773
Pages:
44580-44582 (3 pages)
Docket Numbers:
Docket No. FR-5694-N-02
PDF File:
2013-17773.pdf