The Federal National Mortgage Association has ceased its free market auction system for commitments to purchase conventional home mortgages. Consequently, the Commissioner of Financial Institutions has announced the maximum effective interest rate for home loans, as determined by the General Assembly in 1987, Public Chapter 291. For October 2024, this rate is set at 8.15 percent per annum.
According to the law, the rate is calculated as 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 before this announcement, this calculated rate is 4.15 percent.
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Individuals affected by this maximum effective interest rate should seek legal advice 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. It’s also important to note that state usury laws concerning certain loans made after March 31, 1980, may be overridden by this Act.
For further information, please contact Alica Owen, Public Information Officer at the Tennessee Department of Financial Institutions, at (615) 289-4738.
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