LIBOR Transition - Freddie Mac to Use 30-day Average for SOFR
In February, we announced we’re transitioning from using the London Interbank Offered Rate (LIBOR) as an index to calculate interest for floating rate debt to the Secured Overnight Financing Rate (SOFR). We can now confirm we will be using the 30-day compounded SOFR average published by the Federal Reserve Bank of New York.
This index will be used for floating rate loans across all our product lines—Conventional, Targeted Affordable Housing and Small Balance Loans.
We can also confirm we will begin quoting SOFR-indexed floating rate loans by September 1.
As a reminder, here are key dates around the LIBOR transition to SOFR:
- September 30: Application Deadline for LIBOR Floating-rate Loans. Freddie Mac will not accept any LIBOR-indexed floating-rate loans that are taken under application with the Optigo® lender after September 30, 2020.
- December 31: Purchase Deadline for LIBOR Floating-rate Loans. After December 31, 2020, we will no longer purchase LIBOR-indexed floating-rate loans, regardless of the loan application date or the date of the note.
- November 1 or earlier: Purchase of SOFR Floating-rate Loans. We will begin purchasing SOFR-indexed floating-rate loans by November 1, 2020, at the latest.
We will continue to update you as more details become available about our SOFR offerings and LIBOR cessation. In the meantime, please continue to reference our LIBOR Transition webpage, and send us an email with any specific questions.
We appreciate your partnership and look forward to a smooth transition.