[Federal Register Volume 74, Number 11 (Friday, January 16, 2009)]
[Notices]
[Pages 3094-3095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-991]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5276-N-01]


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

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, 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, 2009, is 3\3/4\ 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 January 1, 2009, is 4\1/8\ 
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.

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, 2009, is 4\1/8\ percent; and 
(2) has approved the establishment of the debenture interest rate by 
the Secretary of HUD at 4\1/8\ percent for the 6-month period beginning 
January 1, 2009. 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 2009.
    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

[[Page 3095]]

 
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
------------------------------------------------------------------------

    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, 2009, is 3\3/4\ 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.

    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 12, 2009.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
 [FR Doc. E9-991 Filed 1-15-09; 8:45 am]
BILLING CODE 4210-67-P