The Federal Housing Administration (FHA) this week published a new proposed policy for the Home Equity Conversion Mortgage (HECM) program, which would update the way debenture interest rates for HECM loans operate.

The draft Mortgagee Letter (ML) “proposes updates to HUD’s calculations for the payment of debenture interest for HECM claims and establishes a process for retroactively adjusting the calculation of debenture interest for claims filed on HECMs that became due and payable on or after September 19, 2017,” FHA said in an announcement of the proposal.

Debenture interest refers to the percentage of a return that an investor would details ⇒

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