Fannie Mae Shares Further Details on the LIBOR Transition

Rhea-AI Summary

Fannie Mae (OTC-PINK: FNMA) has confirmed its transition from legacy LIBOR loans to SOFR-indexed benchmarks as per the Federal Reserve Board's guidance. Announced on December 22, 2022, this transition excludes the term SOFR index for new loans or floating-rate securities, impacting products like Multifamily ARMs and Single-Family Credit Risk Transfer securities. Fannie Mae will not convert existing 30-day Average SOFR loans to term SOFR. The company plans to update its LIBOR Transition webpages soon, reinforcing its commitment to adapting to market changes.

Positive

• None.

Negative

• Excluding term SOFR could limit options for borrowers and investors associated with existing LIBOR products.
• Transitioning away from established LIBOR benchmarks may introduce uncertainty in market pricing for floating-rate products.

WASHINGTON, Jan. 13, 2023 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) today reminded the market, as announced on December 22, 2022, that it will transition its legacy LIBOR loans and securities to the SOFR-indexed benchmark replacements recommended by the Federal Reserve Board. Additionally, in alignment with the Federal Reserve Board's final rule pursuant to the Adjustable Interest Rate (LIBOR) Act and based on guidance from Fannie Mae's Conservator, the Federal Housing Finance Agency (FHFA), Fannie Mae will not include term SOFR as a benchmark for new loans or floating-rate securities.

As a result, Fannie Mae also will not take any steps to convert existing 30-day Average SOFR-indexed floating-rate loans or securities from the 30-day Average SOFR to term SOFR. The preceding sentences apply to the following products: Multifamily Adjustable-Rate Mortgages (ARMs) and related MBS, Single-Family and Multifamily Credit Risk Transfer (CRT) securities, Single-Family and Multifamily Collateralized Mortgage Obligations (CMOs), Stripped MBS (SMBS), and any other new floating rate loans or securities (excluding Single-Family ARMs and related MBS). The selected replacement index for each legacy LIBOR product can be found in the December 22 announcement.

Fannie Mae will update its LIBOR Transition webpages in the coming weeks.

About Fannie Mae

Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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SOURCE Fannie Mae

FAQ

What is Fannie Mae's current transition regarding LIBOR?

Fannie Mae is transitioning from legacy LIBOR to SOFR-indexed benchmarks for new loans and securities.

When was Fannie Mae's LIBOR transition announcement made?

The announcement was made on December 22, 2022.

Which products are affected by the LIBOR transition at Fannie Mae?

The transition affects Multifamily ARMs and Single-Family Credit Risk Transfer securities among others.

Will Fannie Mae convert existing SOFR loans to term SOFR?

No, Fannie Mae will not convert existing 30-day Average SOFR loans to term SOFR.

How will Fannie Mae provide updates on the LIBOR transition?

Fannie Mae will update its LIBOR Transition webpages in the coming weeks.