[Federal Register Volume 62, Number 140 (Tuesday, July 22, 1997)]
[Notices]
[Pages 39247-39248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19174]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner
[Docket No. FR-4259-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 of change in debenture interest rates.

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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 Commissioner 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 six-month period 
beginning July 1, 1997, is 6\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 six-month period beginning July 1, 
1997, is 7\1/8\ percent.

FOR FURTHER INFORMATION CONTACT: James B. Mitchell, Department of 
Housing and Urban Development, 451 7th Street, S.W., Room 6164, 
Washington, D.C. 20010. Telephone (202) 708-1220 ext. 2612, or TDD 
(202) 708-4594 for hearing- or speech-impaired callers. These are not 
toll-free numbers.

SUPPLEMENTAL INFORMATION: Section 224 of the National Housing Act (24 
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. Each of these regulatory provisions states 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, 1997, is 7\1/8\ percent and (2) 
has approved the establishment of the debenture interest rate by the 
Secretary of HUD at 7\1/8\ percent for the six-month period beginning 
July 1, 1997. 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 an insurance 
commitment or endorsement date (as applicable) within the last six 
months of 1997.
    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.      

[[Page 39248]]

                                                                        
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.      
------------------------------------------------------------------------

    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'' of interest 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 eight- to twelve-year maturities, 
for the six-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 221.790.
    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 six-month period beginning July 1, 1997, is 6\7/8\ percent.
    HUD expects to publish its next notice of change in debenture 
interest rates in January 1998.
    The subject matter of this notice falls within the categorical 
exclusion from HUD's environmental clearance procedures set forth in 24 
CFR 50.20(1). For that reason, no environmental finding has been 
prepared for this notice.

(Secs. 211, 221, 224, National Housing Act, 12 U.S.C. 1715b, 1715l, 
1715o; sec. 7(d), Department of HUD Act, 42 U.S.C. 3535(d))

    Dated: July 15, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 97-19174 Filed 7-21-97; 8:45 am]
BILLING CODE 4210-27-M