[Federal Register Volume 68, Number 40 (Friday, February 28, 2003)]
[Notices]
[Pages 9705-9706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-4783]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4463-N-13]


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 6-month period beginning 
January 1, 2003, is 5\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, 2003, is 5 
percent.

FOR FURTHER INFORMATION CONTACT: James B. Mitchell, Department of 
Housing and Urban Development, 451 7th Street, SW., Room 6164, 
Washington, DC 20410. Telephone (202) 708-3944, extension 2612, or TDD 
(202) 708-4594 for hearing- or speech-impaired callers. These are not 
toll-free numbers.

SUPPLEMENTARY 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. 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 satisfactory 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, 2003, is 5

[[Page 9706]]

percent; and (2) has approved the establishment of the debenture 
interest rate by the Secretary of HUD at 5 percent for the 6-month 
period beginning January 1, 2003. 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 2003.
    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.
------------------------------------------------------------------------

    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, 2003, is 5\3/4\ percent.
    HUD expects to publish its next notice of change in debenture 
interest rates in June 2003.
    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.

(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: February 14, 2003.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 03-4783 Filed 2-27-03; 8:45 am]
BILLING CODE 4210-27-P