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ARM 7-6

ARM 7-6

This job aid guides you through the steps for entering commitment data for ARM 7-6™ Mortgage Loans (plan # 02255) using the Multifamily committing and delivery system, C&D™.

A Fannie Mae Multifamily ARM 7-6 Mortgage Loan (ARM Plan #02255) has a specific set of terms that are available through the ARM execution.  Specifically, it is a 7-year, Adjustable Rate Mortgage Loan with a 6% maximum MBS pass-through rate (MBS Cap).  

Note: For loans with a Rate Adjustment Index of "1 month British Bankers LIBOR-Daily" the Mortgage-Backed Security (MBS) issuance date must occur prior to the first payment date. The Lender must deliver the loan at least eight business days prior to the first payment date to allow time for securitization to occur prior to the first payment date.

Follow these steps:

  1. Launch the Multifamily C&D application.
  2. Enter your User ID and Password to log in.  
    The Multifamily C&D home page appears.
  3. Select Create a new deal from the drop-down menu and complete the registration screen. You may also select an existing deal name for the deal you would like to commit.
  4. Select the Commitments tab to complete the commitment information.
    The Commitments screen appears.
  5. Scroll to the Commitment Details section and enter the commitment information.
     
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  6. Select Variable from the Interest Type drop-down menu.  
  7. Scroll to the ARM Attributes section of the page.
     
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  8. Select the ARM Plan Number from the menu.  
    For ARM 7-6 deals, choose plan number 02255.
  9. Enter the Original Note Rate, also listed as Current Interest Rate.
    Calculate the Original Note Rate/Current Interest Rate by adding the guaranty fee, servicing fee and coupon (LIBOR index plus the Investor Margin). The screenshot below shows the position of the coupon, index and investor margin values on the trade confirmation statement.
     
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  10. Enter the Original Index Rate.
    The Original Index Rate is listed as the “1-month LIBOR” rate on the trade confirmation statement.
  11. Enter the Required Net Margin.
    Calculate the Required Net Margin by subtracting the servicing fee from the mortgage margin (listed as Gross Margin on the trade confirmation statement).
  12. Enter the Mortgage Margin (listed as Gross Margin on the trade ticket).
  13. Enter the Lifetime Maximum Interest Rate.
    Calculate the Maximum Interest Rate by adding the maximum MBS pass through rate cap (6%) and the guaranty and servicing fees.
  14. Enter all other necessary information on the Commitment tab before submitting.

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