MBS News and Announcements

Fannie Mae to Accept Single-Family SOFR ARM Products Beginning August 3, 2020

Today Fannie Mae released additional details about our Single-Family Secured Overnight Financing Rate (SOFR) ARM product, including when we will begin accepting deliveries of single-family SOFR ARM loans. This comes as a follow-up to our February 5 announcement.

Whole loan and MBS pricing and deliveries of single-family SOFR ARMs will begin on August 3, 2020. Lenders may begin delivery of whole loans on this date and delivery of loans in MBS with issue dates beginning August 1, 2020. All existing pooling policies will apply to SOFR ARMs in MBS.

As a reminder, the key features of the new SOFR ARM products that use an index based on a 30-day average of SOFR are in the table below. The 30-day average of SOFR is published by the Federal Reserve Bank of New York.

ARM Product Max Margin ARM Subtypes and Prefix Fixed Rate Period Reset Period First Rate Change Caps Subsequent Rate Change Caps Life Cap (Ceiling)
3 Year (3yr/6m) 300 bps 85A
SO
3 years 6 months +2%/-2% +1%/-1% Up to +5%
5 Year (5yr/6m) 300 bps 85B
SO
5 years 6 months +2%/-2% +1%/-1% Up to +5%
7 Year (7yr/6m) 300 bps 85C
SO
7 years 6 months +5%/-5% +1%/-1% Up to +5%
10 Year (10yr/6m) 300 bps 85D
SO
10 years 6 months +5%/-5% +1%/-1% Up to +5%

Multifamily SOFR ARMs

There are no new details at this time. Fannie Mae still anticipates delivery of multifamily SOFR-Capped ARM Loans in Q4 2020 and plans to release additional details in the coming months.

Questions?

For additional information please see the Single-Family Selling Guide update or contact us.