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U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

July 11, 1996
 
Mortgagee Letter 96-35
 
ALL APPROVED MORTGAGEES
 
SUBJECT:  Debenture Interest Rates
 
     Notice has been published in the Federal Register that the
debenture interest rate will be 7 1/4 percent for the next six-
month period.  The rate applies to all home and project mortgages
and loans under the National Housing Act, as amended, except
Section 221(g)(4), committed or endorsed on or after July 1, 1996.
 
     Debentures bear interest at the rate in effect at the date of
commitment or endorsement for insurance, whichever is higher.
Rates applicable to mortgages committed or endorsed in prior
periods are as follows:
 
Effective interest rate         on or after       prior to
9 l/2 ........................  Jan. 1, 1980    July 1, 1980
9 7/8 ........................  July 1, 1980    Jan. 1, 1981
ll 3/4 .......................  Jan. 1, 1981    July 1, 1981
l2 7/8 .......................  July 1, 1981    Jan. 1, 1982
l2 3/4 .......................  Jan. 1, 1982    Jan. 1, 1983
10-1/4 .......................  Jan. 1, 1983    July 1, l983
l0 3/8 .......................  July 1, 1983    Jan. 1, 1984
11 1/2 .......................  Jan. 1, 1984    July 1, 1984
13 3/8 .......................  July 1, 1984    Jan. 1, 1985
11 5/8 .......................  Jan. 1, 1985    July 1, 1985
11 1/8 .......................  July 1, 1985    Jan. 1, 1986
10 1/4 .......................  Jan. 1, 1986    July 1, 1986
8 1/4 ........................  July 1, 1986    Jan. 1, 1987
8 ............................  Jan. 1, 1987    July 1, 1987
9 ............................  July 1, 1987    Jan. 1, 1988
9 1/8 ........................  Jan. 1, 1988    July 1, 1988
9 3/8 ........................  July 1, 1988    Jan. 1, 1989
9 1/4 ........................  Jan. 1, 1989    July 1, 1989
9 ............................  July 1, 1989    Jan. 1, 1990
8 1/8 ........................  Jan. 1, 1990    July 1, 1990
9 ............................  July 1, 1990    Jan. 1, 1991
8 3/4 ........................  Jan. 1, 1991    July 1, 1991
8 1/2 ........................  July 1, 1991    Jan. 1, 1992
8 ............................  Jan. 1, 1992    July 1, 1992
8 ............................  July 1, 1992    Jan. 1, 1993
7 3/4.........................  Jan. 1, 1993    July 1, 1993
7 ............................  July 1, 1993    Jan. 1, 1994
6 5/8 ........................  Jan. 1, 1994    July 1, 1994
7 3/4 ........................  July 1, 1994    Jan. 1. 1995
8 3/8 ........................  Jan. 1, 1995    July 1, 1995
7 1/4 ........................  July 1, 1995    Jan. 1, 1996
6 1/2 ........................  Jan. 1, 1996    July 1, 1996
 
                                                            2
 
     Notice has also been published in the Federal Register that
the debenture interest rate will be 6 7/8 percent for mortgages
assigned to HUD under the provisions of Section 221(g)(4) for the
six-month period beginning July 1, 1996.
 
     Claims for insurance benefits that are settled in cash in lieu
of debentures will include an interest allowance, comparable to the
interest at the debenture rate, on the amount of the settlement.
 
     If you have any questions, please call James Mitchell at (202)
755-7450, ext. 125.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner