Chattanooga, TN – The Federal National Mortgage Association has discontinued its free market auction system for commitments to purchase conventional home mortgages.
Consequently, the Commissioner of Financial Institutions has announced that the maximum effective annual interest rate for home loans, as set by the General Assembly in 1987, Public Chapter 291, will be 8.43 percent for January 2025.
This rate is calculated by adding four percentage points to 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, the calculated rate is 4.43 percent.
Those impacted by this maximum effective interest rate should seek legal counsel to understand 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. These federal laws may preempt state usury laws concerning certain loans made after March 31, 1980.