The Federal National Mortgage Association has ceased its free market auction system for purchasing conventional home mortgages. In response, Commissioner Gonzales, of the Tennessee Department of Financial Institutions, has announced the maximum effective interest rate for home loans for the month of March 2025. This rate is set at 8.78 percent per annum, in accordance with the guidelines established by the General Assembly in 1987 under Public Chapter 291.
The law stipulates that the interest rate is to be determined as four percentage points above the index of market yields on long-term government bonds, adjusted to a 30-year maturity by the U.S. Department of the Treasury. Based on the most recent weekly average statistical data available prior to this announcement, the calculated rate is 4.78 percent.
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Individuals affected by this interest rate announcement should seek legal advice regarding the implications of the Depository Institutions Deregulation and Monetary Control Act of 1980, as amended, and the associated regulations enacted by the Federal Home Loan Bank Board. It is important to note that state usury laws related to specific loans made after March 31, 1980, may be overridden by this federal Act.
For further information, individuals may contact Alica Owen, Public Information Officer at the Tennessee Department of Financial Institutions, via phone at (615) 289-4738.
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