Servicing Guide

Published September 9, 2020

For best results, pose your search like a question.

Guide Resources

For a comprehensive list of resources such as forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

Customers Recommend Ask Poli

AskPoli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Launch Ask Poli  

Download PDF Guide

You can also download the printable ~800 page PDF, which include links.

Download Now

For investor reporting, how is the pass-through rate determined for Single Family ARM adjustments?

There are two methods for determining the new pass-through rate when the interest rate for an ARM changes:  

  • the “top-down” method, and  
  • the “bottom-up” method.  

For ARM whole loan commitments dated prior to September 11, 2017, the “bottom-up” method can be used, but for commitments dated on or after September 11, 2017, the “top-down” method must be used when calculating the pass-through rate at rate reset.

The “top-down” method must be used for mortgage loans in most weighted-average structure MBS pools (excluding ARM Flex Plus® pools), while the “bottom-up” method must be used for mortgage loans in statedstructure MBS pools and ARM Flex Plus MBS pools.

 

A. “Top-down” method. The following table illustrates the “top-down” method of determining the new passthrough rate for an ARM after an interest rate change: 

B. “Bottom-up” method. The calculation for determining the new pass-through rate for an ARM after an interest rate change under the “bottom-up” method involves six steps. The servicer must complete the steps as shown in the following table. 

For more information see Investor Reporting Manual Chapter 5, Formulas and Calculations.

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles


AskPoli

Customers Recommend Ask Poli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Guide Resources

For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.