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 Department of Housing and Urban Development [Docket No. FR-5202-N-02]
 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, 2008, is 3
                        7/8
                         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 July 1, 2008, is 4
                        5/8
                         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 July 1, 2008, is 4
                    5/8
                     percent; and (2) has approved the establishment of the debenture interest rate by the Secretary of HUD at 4
                    5/8
                     percent for the 6-month period beginning July 1, 2008. 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 2008. For convenience of reference, HUD is publishing the following chart of debenture interest rates applicable to mortgages committed or endorsed since January 1, 1980:
                    ( print page 45235) Effective interest rate
On or after
Prior to9
                            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.
 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 yield on all outstanding marketable Treasury obligations of 8- to 12-year maturities, for the 6-month periods of 
                    ( print page 45236)
                    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, 2008, is 3
                    7/8
                     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:  July 25, 2008. Brian D. Montgomery, Assistant Secretary for Housing—Federal Housing Commissioner.


[FR Doc. E8-17742 Filed 8-1-08; 8:45 am] BILLING CODE 4210-67-P