The HUD Passbook Rate 2024 annual adjustment is a crucial piece of information for those who rely on this rate for their mortgage payments. The rate is adjusted annually, and for 2024, the adjustment is significant.
The HUD Passbook Rate is a benchmark interest rate used to calculate mortgage insurance premiums. In 2024, this rate is expected to be higher than in previous years.
This increase will likely impact borrowers who have mortgages with mortgage insurance, as their premiums may go up accordingly.
HUD Increases Passbook Savings Rate
HUD has increased the imputed passbook savings rate from 0.06% to 0.40% as of January 1, 2024. This change affects how household income is calculated.
The new passbook savings rate of 0.40% will be used for loans locked on Monday, January 29, 2024, and beyond. This rate is subject to change without prior notice or as adopted by HUD.
The annual income included as household income will be the greater of the actual income or a percentage of the assets based on the current 0.40% passbook savings rate.
Here's a breakdown of how the imputed income from assets is calculated:
Note: The actual income from assets ($150) is greater than the imputed income from assets ($378.20) in this example.
Sources
- https://www.huduser.gov/portal/datasets/inflationary-adjustments-notifications.html
- https://housingnm.org/lenders-realtors/tools-resources/lender-memos/hud-increases-passbook-savings-rate-asset-test-affected
- https://support.public.house/docs/imputed-income/
- https://epstracsservices.com/message-of-the-month/
- https://ohiohome.org/compliance/messagearchive.aspx
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