When Single Family mortgage insurance premium payments are received late, the Current Value of Funds Rate (CVFR) is used to calculate interest due (I TFM 6-8040.40). Interest charged is simple interest at the rate in effect at the time the debt becomes overdue. The rate of interest remains fixed for the duration of the indebtedness (I TFM 6-8025.20).
The CVFR, effective January 1 of each year, is based on the Treasury Tax and Loan (TT&L) rate for the 12-month period ending the previous September 30, rounded to the nearest whole percent. The rate is published annually in the Federal Register by October 31. The rate is calculated quarterly on a 12-month rolling average of the TT&L rate and is subject to revision only if the published rate changes by 2 percentage points at the close of the prior calendar quarter.
Information on the the current rate is available from the U.S. Department of the Treasury's Financial Management Service (FMS) website at: http://www.fms.treas.gov/cvfr/index.html.
To request additional information regarding Single Family Mortgage Insurance Premiums and the Current Value of Funds Rate, please send an email to HUD's Single Family Insurance Operations Division (SFIOD) at: LenderAssistance@hud.gov.