Description
Requirements
A SARM Loan is an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. with an external Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Product Description |
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Plan Numbers |
04932 - 30-Day Average SOFR30-Day Average SOFRCompounded average of SOFR over a specified interest period of 30 days. |
Term |
5 to 10 years |
Funding Type |
MBSMBSMortgage-Backed Security or Cash |
Index |
30-Day Average SOFR30-Day Average SOFRCompounded average of SOFR over a specified interest period of 30 days. |
Rate Change Date | Date the interest rate changes based on changes in the selected IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. . |
Index Look-Back Period | 1 Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the Rate Change Date. |
Interest Rate Floor |
Must not be less than the combined
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Lockout Period | 1st Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. |
Prepayment Availability |
After the lockout period, may be voluntarily prepaid per the selected prepayment option. |
Minimum Loan Amount |
$25 million |
Interest Rate |
Equals the
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Interest Rate Adjustment |
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Interest Rate Cap |
Required for the entire term of the SARM Loan. |
Interest Accrual Method | Actual/360 |
Amortization |
Amortizes with fixed monthly principal installments based on a calculated actual/360 fixed rate payment. |
Conversion to Fixed Rate |
Permitted, with no prepayment penalty and minimal re-underwriting, after the lockout period and before the "open period" (typically the last day of the 4th month preceding the end of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. term). |
Investors |
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Rate Lock |
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