Fannie Mae Announces Extension of COFI Index for ARMs

Fannie Mae recently issued a Servicing Notice to alert servicers that the 11th District monthly weighted-average cost of funds index (COFI) used in connection with certain ARMs will continue to be published until January 2022, with the December 2021 COFI being the last published rate.

The COFI is published monthly by the Federal Home Loan Bank of San Francisco (FHLBank) and it is used as the benchmark for determining interest rates on certain types of ARMs.  While Fannie Mae is no longer purchasing new COFI ARMs, the rate is still relevant to servicers of existing loans.

The FHLBank previously announced that it would cease publishing the COFI in January 2020, but later extended that to January 2021.  The FHLBank has now announced that it will continue publishing the COFI until January 2022.

Fannie Mae has not yet determined the substitute index for COFI ARMs that are being serviced on its behalf, but Fannie Mae stated in the Servicing Notice that it will make an announcement once it makes this determination.