FNMA announced a new standard ARM program, as follows:
“We are adding a five year ARM plan to our standard eligible ARM plans. Some of the characteristics associated with this plan are:
- Plan Number – 3846
- Initial Fixed Period – 5 years
- Subsequent Adjustments – every 5 years
- Index – 5-year Weekly CMT
- Caps – 2% initial adjustment and 2% subsequent adjustments
- Lifetime Interest Rate Cap – 6%
- Lifetime Interest Rate Floor – the rate can never go below the margin
- Execution – eligible for MBS only
Refer to the updated Standard ARM Plan Matrix for additional details.
Note: Loans using ARM Plan 3846 should be underwritten through DU using the FM-GENERIC, 5 YR ARM plan.
Loans originated as ARM Plan 3846 are eligible for delivery into MBS pools as follows:
- DU loans: On or after September 1, 2017
- Manually underwritten loans: “On or after January 1, 2018”
[FNMA SEL-2017-06; available directly from: https://www.fanniemae.com/content/announcement/sel1706.pdf]
A similar loan program was previously offered by FNMA on a negotiated basis. After a review of our documents and system, we have determined that these types of loans are already supported in ConformX via FNMA Program 824833 “5/5 Treasury ARM Non-Convertible – 2/2/6”.
August 21, 2017
FNMA Selling Guide B5-6-02 “HomeReady Mortgage Loan and Borrower Eligibility” has been updated to include ARM Plan 3846. Therefore new FNMA Program 109513 “HomeReady 5/5 Treasury ARM Non-Convertible – 2/2/6” has been created. This new program will be available in ConformX August 22, 2017.