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

Notice.

Citation: "78 FR 4427"

Document Number: "Docket No. FR-5694-N-01"

Page Number: "4427"

"Notices"

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.

   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.

   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 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 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

   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.

   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).)

   Dated: January 8, 2013.

Carol J. Galante,

Assistant Secretary for Housing--Federal Housing Commissioner.

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

BILLING CODE 4210-67-P