Office of Loan Programs
Interest-Only Mortgage Origination Program (IO-MOP)
The IO-MOP loan features interest-only payments for a specified period of time (IO-Period) as defined in the Promissory Note. During the IO-Period, the monthly payments due are based on the interest-only rate (IO-MOP Rate) which is equal to the Standard Rate, plus an additional fee component of .25 percent and adjusts annually on the Anniversary Date of the note with a maximum annual rate adjustment of 1 percent, up or down.
After the IO-Period, the interest rate will be the then-current Standard Rate, without the added .25 percent fee component, and the principal balance of the loan will be fully amortized over the remaining term of the loan resulting in a principal and interest monthly payment. Although the maximum overall loan term is 40 years, an IO-MOP loan must have a minimum 30-year amortization period remaining after the IO-Period ends. Effective with the 2010-2012 MOP allocation, 15 percent of the funds allocated for MOP loans is available for IO-MOP loans. More details can be found in the IO-MOP brochure (pdf).