The Tennessee Department of Financial Institutions has issued a new announcement regarding home loans’ interest rates. Commissioner Gonzales has declared that, following the discontinuation of the Federal National Mortgage Association’s free market auction system for commitments to purchase conventional home mortgages, the maximum effective rate of interest for home loans for June 2024 will be 8.73 percent per annum. This decision is in accordance with the mandate of the General Assembly in 1987, Public Chapter 291.
The specified rate is determined to be four percentage points above the index of market yields on long-term government bonds, adjusted to a thirty-year maturity, as calculated by the U.S. Department of the Treasury. The most recent data preceding this announcement indicates a calculated rate of 4.73 percent.
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This adjustment in interest rates may affect individuals currently engaged in or considering entering into home loan agreements. It is advised for those individuals to seek legal counsel to fully understand the implications of this change. Specifically, the effect of the Depository Institutions Deregulation and Monetary Control Act of 1980 and subsequent amendments and regulations should be considered, particularly in how state usury laws may interact with or be preempted by this federal legislation for certain loans made after March 31, 1980.
For further information or inquiries, individuals are encouraged to contact Alica Owen, the Public Information Officer at the Tennessee Department of Financial Institutions, at (615) 289-4738.
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