This Directive announces changes in the interest rates to be paid on debentures issued with respect to a loan or mortgage insured by the FHA 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, 2007, is 4 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, 2007, is 5 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.

HUD expects to publish its next notice of change in debenture interest rates in January 2008 

For additional information regarding this directive, servicers should contact;

Yong Sun
Department of Housing and Urban Development
451 Seventh Street, SW., Room 2238,
Washington, DC 20410-8000
Telephone (202) 402-7541

To view the Directive in its entirety, including a chart of debenture interest rates applicable to mortgages committed or endorsed since January 1, 1980, please click on the following link.

MS Word - Directive Number FR-5155-N-01 

Adobe/PDF - Directive Number FR-5155-N-01 

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