Section 108 Loan Guarantee Program Offset Fee for FY 2025 Announced
By: Richa Goel, Policy & Legislative Affairs Data Analyst
On September 25th, HUD published in the Federal Register a notice titled “Section 108 Loan Guarantee Program: Announcement of Fee to Cover Credit Subsidy Costs for FY 2025 and Solicitation of Comment” announcing the proposed FY 2025 Section 108 offset fee.
According to HUD, if authorized by statue in FY 2025, the offset fee for disbursements made under Section 108 would be set at 0.82%. This is a decrease from FY 2024, which is currently set at 1.64%. This fee is meant to offset credit subsidy costs.
In calculating the fee percentage, HUD used a similar calculation model as in previous years. The FY 2025 fee calculation model “…incorporates updated information regarding the composition of the Section 108 portfolio and the timing of the estimated future cash flows for defaults and recoveries,” as stated in the notice.
HUD is soliciting comments on the FY 2025 fee rate due by October 25, 2024.
The full notice can be found here.