The Federal National Mortgage Association has discontinued its free market auction system for commitments to purchase conventional home mortgages. As a result, the Commissioner of Financial Institutions has announced that the maximum effective rate of interest per annum for home loans, as set by the General Assembly in 1987 under Public Chapter 291, will be 8.43 percent per annum for the month of August 2024.
The rate, determined by the said law, is calculated as an amount equal to four percentage points above the index of market yields of long-term government bonds adjusted to a thirty-year maturity by the U.S. Department of the Treasury. Based on the most recent weekly average statistical data available preceding this announcement, the calculated rate is 4.43 percent.
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Individuals affected by this maximum effective rate of interest for home loans are advised to consult legal counsel regarding the implications of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221 as amended by P.L. 96-399) and related regulations issued by the Federal Home Loan Bank Board. State usury laws related to certain loans made after March 31, 1980, may be preempted by this Act.
For further information, contact:
Alica Owen
Public Information Officer
Tennessee Department of Financial Institutions
(615) 289-4738
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