Fannie Mae to Use ARRC Recommended Fallback Language for Single-Family ARMs

Alicia Jones

202-752-5716

Fannie Mae supports the Alternative Reference Rate Committee’s (ARRC) recommendation to replace the London Interbank Offered Rate (LIBOR) with a new index based on the Secured Overnight Financing Rate (SOFR) to ensure a seamless transition away from LIBOR by the end of 2021. As part of this transition, we intend to use the fallback language that the ARRC has recommended for newly-originated adjustable-rate mortgages (ARMs). We anticipate publishing in the first quarter of 2020 updates to our uniform ARM notes to incorporate the recommended fallback language for all newly-originated ARMs. Fannie Mae will work closely with the ARRC, the Federal Housing Finance Agency, Freddie Mac, and other industry participants throughout the transition away from LIBOR.

For more information, please read the ARRC news release.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.