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Bill > HB0908

TN HB0908

TN HB0908
AN ACT to amend Tennessee Code Annotated, Title 45 and Title 47, relative to interest on home loans.

summary

Introduced
02/04/2025
In Committee
02/26/2025
Crossed Over
03/04/2025
Passed
04/08/2025
Dead
Signed/Enacted/Adopted
04/28/2025

Introduced Session

114th General Assembly

Bill Summary

As enacted, removes the weighted average yield of the accepted offers of the Federal National Mortgage Association's current free market system auction and the 30-year treasury yield as the two bases upon which the maximum effective rate of interest on home loans may be set by the commissioner of financial institutions, and replaces them with the average prime offer rate. - Amends TCA Title 45 and Title 47.

AI Summary

This bill amends Tennessee's law regarding the maximum interest rate for home loans by replacing the previous method of calculating the rate with a new formula based on the average prime offer rate (APOR). Specifically, the bill sets the maximum effective interest rate for home loans at four percentage points above the APOR for a 30-year fixed loan, as published by the Federal Financial Institutions Examination Council. The bill also establishes an absolute maximum interest rate cap of 18% per annum. The APOR is a standardized reference rate used in mortgage lending to help determine loan pricing and is defined in federal regulations. By using this benchmark, the bill provides a more current and dynamic method for determining maximum home loan interest rates compared to the previous system. The changes will take effect on July 1, 2025, giving financial institutions and regulators time to adjust to the new calculation method.

Committee Categories

Business and Industry

Sponsors (1)

Last Action

Effective date(s) 07/01/2025 (on 04/28/2025)
(1 Companion Bills)

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