HUD Sets 5% FHA Debenture Rate for Second Half of 2026
A HUD notice filed for public inspection Oct. 9 sets a 5% debenture interest rate for most FHA loans committed or endorsed July 1 to Dec. 31, 2026. It is not a consumer mortgage rate.
By Joseph Salem · 3 min read
HUD has set the FHA debenture interest rate at 5% for most insured loans committed or endorsed from July 1 through Dec. 31, 2026, in a notice filed for public inspection Oct. 9. The notice is scheduled to be published in the Federal Register on Oct. 13, so it is not yet officially published.
Why this matters: FHA servicers and claims teams use this rate when calculating interest on certain insurance claim settlements. It is not the rate borrowers pay and is not evidence that consumer mortgage rates changed.
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What a debenture rate is
Under Section 224 of the National Housing Act, HUD can settle some FHA insurance claims with debentures, which are government obligations, or with cash plus an equivalent amount of interest. The debenture rate sets that interest. A loan keeps the rate in effect on its commitment date or its endorsement date, whichever is higher.
The rate is an accounting rate for FHA insurance obligations. It is not a note rate, not a rate lock and not a benchmark for homebuyer pricing.
The new rates
| Category | Jan.-June 2026 | July-Dec. 2026 |
|---|---|---|
| Most FHA programs | 4 3/4% | 5% |
| Section 221(g)(4) | n/a | 4 1/2% |
Source: HUD Docket No. FR-6604-N-02. The Treasury Secretary approved the 5% rate, the notice says. Section 221(g)(4) debentures follow a separate "going Federal rate" rule, which the notice puts at 4 1/2% for the same period.
Who should pay attention
The notice matters most to FHA servicers, claims and default teams, and compliance staff who reconcile claim payments. Lenders may need to update internal tables for loans endorsed in the second half of 2026.
The notice arrives after the period it covers began, which is common for these semiannual rate notices. The rate still applies by commitment or endorsement date.
Practical takeaway
For servicers and claims teams: update debenture rate tables for July 1 to Dec. 31, 2026 endorsements, and confirm against the final Federal Register version after Oct. 13. For loan officers: if borrowers ask, this is not an FHA rate increase for them.