The Federal Housing Finance Agency said Fannie Mae and Freddie Mac are taking additional steps to transition from the London Interbank Offered Rate, or LIBOR.
- New language will be required for single-family Uniform Adjustable Rate Mortgage instruments closed on or after June 1, 2020.
- All LIBOR-based single-family and multifamily ARMs must have loan application dates on or before Sept. 30, 2020, to be eligible for acquisition.
- Acquisitions of single-family and multifamily LIBOR ARMs will cease on or before Dec. 31, 2020.
The Alternative Reference Rates Committee, which is implementing the LIBOR transition, last fall released recommended contractual fallback language
for ARMs. ICBA serves on the ARRC and encourages community banks to begin preparing for the transition from LIBOR.