www.hudclips.org 


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

January 29, 1988
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 88-1
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 decrease 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 lowered from 10.50 to
          9.50 percent; and,
 
     b.   For Section 235 loans, the maximum rate is lowered from
          10.50 to 9.50 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 February 1, 1988.
 
                              Sincerely,
                              Thomas T. Demery
                              Assistant Secretary for
                                Housing-FHA Commissioner