www.hudclips.org 


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

May 8, 1987
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 87-16
        TO:       ALL APPROVED MORTGAGEES
        SUBJECT:  Change in Maximum Interest Rates
 
              The Housing and Urban Recovery Act of 1983 established
        Negotiated Interest Rates for all single-family and
        multifamily programs, except for Section 235 and Section 232
        (loans to finance purchase and installation of fire safety
        equipment).  HUD regulations have been changed to increase
        the maximum rate of interest on these programs.
 
              These changes are as follows:
 
              a.) For Section 232 loans to finance purchase and
                  installation of fire safety equipment the rate
                  is raised from 9.50 to 10.00 percent; and,
 
              b.) For Section 235 loans, the maximum rate is raised
                  from 9.50 to 10.00 percent.
 
              In Mortgagee Letter 84-21 on the Section 235 program,
        it states that reprocessing will be required by HUD on any
        case in which a mortgagee wishes to close at an interest rate
        higher than the rate shown on the firm commitment.  To avoid
        unnecessary processing, HUD will only accept requests for
        reprocessing where a clear final inspection has been
        obtained.  Mortgagees must submit this information with their
        request to have their case reprocessed at the higher rate.
 
              These changes are effective May 11, 1987.
 
                                  Sincerely,
 
                                  Thomas T. Demery
                                  Assistant Secretary for Housing-
                                    FHA Commissioner
_____________________________________________________________________