When an ARM in Fannie Mae's portfolio converts to a fixed-rate mortgage loan, the servicer must determine:
- a new interest rate, and
- a new pass-through rate.
The calculation for these rates is the same regardless of whether the mortgage loan has an actual/actual or a scheduled/actual remittance type.
The servicer must calculate the new interest rate and pass-through rate for the converted ARM loan by completing the steps shown in the following table.
For more information see Investor Reporting Manual Chapter 5, Formulas and Calculations.