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LIBOR Transition FAQs

Single-Family Credit Risk Transfer (CRT)

Under the guidance of FHFA, Fannie Mae and Freddie Mac are providing jointly prepared answers to frequently 

asked questions related to the GSEs’ respective transitions away from LIBOR-indexed products to SOFR-indexed 

products. The Enterprise section answers high-level questions applicable to all products followed by Q&A sections 

specific to Single-Family adjustable-rate mortgages and PCs/MBS, Credit Risk Transfer transactions, Multifamily 

adjustable-rate mortgages and securities, Credit Risk Transfer transactions, and Collateralized Mortgage 

Obligations.*

Please be aware that the federal Adjustable Interest Rate (LIBOR) Act (LIBOR ACT) became law on March 15, 2022. 

As required by the Act, the Board of Governors of the Federal Reserve System (Federal Reserve Board) published

regulations identifying benchmark replacement rates based on SOFR on December 16, 2022. The regulations 

published by the Federal Reserve Board were used as guidance for the answers provided by Fannie Mae and 

Freddie Mac in this document.

*Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; 

instead, all information, content, and materials available on this site are for general informational purposes 

only. Information on this website may not constitute the most up-to-date legal or other information. This website 

contains links to third-party websites. Such links are only for the convenience of the reader, user or browser; 

Fannie Mae and Freddie Mac do not recommend or endorse the contents of the third-party sites.

Readers of this website should contact their attorney to obtain advice with respect to any particular legal 

matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on 

this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney 

can provide assurances that the information contained herein – and your interpretation of it – is applicable or 

appropriate to your particular situation. Use of, and access to, this website or any of the links or resources 

contained within the site do not create an attorney-client relationship between the reader, user, or browser and 

website authors, contributors, contributing law firms, or committee members and their respective employers.

The following disclaimer has been provided by the London Stock Exchange Group plc (“LSEG") and the GSEs take 

no responsibility for its contents: FTSE USD IBOR Cash Fallbacks are provided by LSEG and its affiliates. LSEG and 

its affiliates shall not be liable for any errors or delays in providing or making available the data contained within 

this service or for any actions taken in reliance on the same. FTSE USD IBOR Cash Fallbacks cannot be used for any 

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license is required. FTSE USD IBOR Cash Fallbacks are subject to LSEG’s terms of use and disclaimer available at 

https://www.lseg.com/en/ftse-russell/benchmarks/usd-ibor-cash-fallbacks.
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Single-Family Credit Risk Transfer (SF CRT)

Q1. When did the GSEs adopt ARRC recommended fallback language in new issuance CRT deals?

The GSEs support the ARRC recommended fallback language. Each GSE has adopted the recommended 

securitization fallback language, beginning with the applicable transaction listed below:

Fannie Mae: CAS 2020-SBT1 transaction in March 2020 

Freddie Mac: STACR 2020-HQA2 transaction in March 2020

Fallback language has evolved slightly over time, so investors should read the offering documents associated 

with their securities.

Q2. When did the GSEs start to issue non-LIBOR based SF CRT deals?

Reducing LIBOR exposure for both the GSEs and investors is very important to us. Freddie Mac moved its 

Credit Risk Transfer program to SOFR based CRT issuance in October 2020. Fannie Mae moved its SingleFamily Credit Risk Transfer program to SOFR based issuance in October 2021. 

Q3. What benchmark index are the GSEs using in SF CRT deals?

The GSEs have structured and plan to continue to structure SOFR-indexed CRT transactions so that they use 

30-day Average SOFR (published by the New York Fed) as the reference rate, with a determination date of 

2 business days (2BD) prior to the beginning of the accrual period.

Q4. What were the key considerations for the GSEs when they moved to SOFR-indexed SF CRT issuance?

In October 2020, Freddie Mac successfully issued its inaugural SOFR-based STACR transaction (STACR 2020-

DNA5) with broad support from all key CRT market participants. Fannie Mae issued its first SOFR-based CAS 

transaction (CAS 2021-R01) in October 2021.

The successful transition to SOFR-indexed CRT issuance required the entire “ecosystem” (e.g., the GSEs as 

the issuers, CRT investors, broker/dealers, trustees, calculation agents, rating agencies, data vendors, etc.) 

to be ready. Other key items included the development of the SOFR market, and the breadth and depth of 

the SOFR-indexed derivatives and financing market.

Q5. Are Fannie Mae’s CAS and Freddie Mac’s STACR programs aligned for SOFR-based issuance?

Yes, Freddie Mac and Fannie Mae are generally aligned on SOFR-based methodologies and conventions for 

SF CRT deals. Specifically, both Freddie Mac and Fannie Mae have been using, and will continue to use the

30-day Average SOFR (as published by the New York Fed), with a determination date of 2 business days 

(2BD) prior to the beginning of the accrual period. Please see the most recent CAS and STACR offering 

documents for details of the convention (including payment date, benchmark adjustment date, accrual 

period, day count, cap/floor, etc.).

Q6. For legacy SF CRT deals, what benchmark index will the GSEs use when LIBOR is no longer available or

no longer representative?

The Federal Reserve Board has implemented the Adjustable Interest Rate (LIBOR) Act which was signed into 
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law in March 2022. The final regulations on the replacement rates were announced by the Federal Reserve 

Board on December 16, 2022. Consistent with the Federal Reserve Board’s regulation, the GSEs will 

transition to the 30-day Average SOFR rate published by the Federal Reserve Bank of New York, plus an 

applicable tenor spread adjustment. The transition will occur immediately following the June 30, 2023, 

cessation of the publication of all remaining tenors of USD LIBOR by ICE Benchmark Administration Limited.

Refer to the table in Q12 of the Enterprise section for more details. 

Q7. Will the new issue SOFR-indexed CRT deals transition from 30-day Average SOFR to Term SOFR? 

New-issue CRT deals indexed to NY Fed published 30-day Average SOFR will not include language allowing 

an optional transition to Term SOFR. Outstanding CRT deals indexed to NY Fed published 30-day Average 

SOFR that include optional transition language will also not transition to Term SOFR.

Q8. When is the last time that the GSEs will use the 1-month LIBOR benchmark for the CRT transactions?

The benchmark adjustment dates for the GSE CRT transactions are on the second business day prior to the 

start of the accrual period. The accrual period begins on the prior Payment Date and ends on the day 

preceding the current Payment Date. The Payment Date for each month is the 25th day of each month (or 

the next Business Day). LIBOR will continue to be published through June 30, 2023. Therefore 6/22/2023 

will be the last date on which the 1-month LIBOR benchmark will be used for calculating accrued interest 

during the 6/26/2023 – 7/24/2023 Accrual Period, and the payments will be made to bondholders on the 

7/25/2023 Payment Date.

Q9. When is the first time that the GSEs will use the spread-adjusted 30-day Average SOFR rate as a

replacement for the LIBOR benchmark for legacy CRT transactions? 

7/21/2023 will be the first date on which the spread-adjusted 30-day Average SOFR rate will be used as the 

replacement rate for such transactions. The replacement rate will be used for calculating accrued interest 

during the 7/25/2023– 8/24/2023 Accrual Period, and the payments will be made to bondholders on the 

8/25/2023 Payment Date.

Q10. With the transition of the legacy CRT transactions after 6/30/2023, will there be any other changes 

regarding how the accrued interest will be calculated and paid in the future, such as the benchmark 

adjustment date, accrual period, payment date, and day count convention, etc.?

After the transition, the benchmark adjustment date, accrual period, payment date, and the day count 

convention will stay the same. The GSEs will change the time at which the benchmark will be determined. 

On a benchmark adjustment date, the time that the spread-adjusted 30-day Average SOFR rate is 

determined will be 3:00 pm (New York City time), instead of 11:00 am (London time) as for 1-month LIBOR. 

This would make it consistent with the time at which the 30-day Average SOFR rate is determined for 

existing SOFR-indexed CRT transactions. 

Q11. What spread adjustment will be used for the legacy CRT transactions after LIBOR cessation on 6/30/2023?

Per the LIBOR Act and Fed’s final rule, the spread adjustment will be 11.448 bps for the 1-month tenor, thus 

the spread adjustment will be fixed at 11.448 bps for legacy CRT transactions after 6/30/2023. After 

transition, the spread-adjusted 30-day Average SOFR rate will replace the 1-month LIBOR benchmark for 

legacy CRT transactions.
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Summary of Prior Changes

Section Summary of change

July 2020

SF CRT Q3. Added language to clarify the plan to use 30-

day Average SOFR (published by the New York

Fed) as the reference rate, and related 

conventions.

Q4. Added reference to the joint June 2020 

Survey.

Q8, Q9, Q10. Updated language to reflect most 

current information based on June’s survey

Q15. Added a link to the 7/29/20 CRT Deck to be 

posted on the LIBOR transition website. 

October 2020 

Single-Family Credit 

Risk Transfer (SF CRT)

Q18. Updated language to note the GSE’s 

coordination with ARRC, FHFA and other 

industry partners on the transition of legacy SF 

CRT deals.

December 2020

SF Credit Risk Transfer Q2, Q3, Q4, Q5 and Q6. Updated for SOFR-based 

CRT issuance 

Removed Q8, Q9, Q10, Q11, Q12, Q13 and Q14. 

and consolidated SOFR market convention 

related questions to Q15. (now Q8.)

Q18. (now Q11.) Updated to reference legacy 

announcement and spread adjustment

Added Q12, Q13, Q14 and Q15. for legacy SF CRT

April 2021

SF CRT Q11. Added to reflect IBA announcement

October 2021

Single-Family CRT Q3. Added language that transition to one-

month Term SOFR will also depend on ARRC 

recommendation that use of rate is appropriate 

for SF CRT.

June 2022

Single-Family CRT Q2. Updated to reflect that Fannie Mae moved its 

SF CRT program to SOFR-based issuance in October 

2021.

Q3. Updated to incorporate that the GSEs will have 

to determine the administrative feasibility of Term 

SOFR.

Q5. Updated to reflect that Fannie Mae moved its 

SF CRT program to SOFR-based issuance in 

October 2021.

January 2023

Single Family CRT Q3. Updated to revise language regarding a 

potential subsequent transition of SF CRT 

products from 30-day average SOFR to Term 
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Section Summary of change

SOFR.

Q5 (previous version). Deleted. The GSEs will not 

issue LIBOR-based and SOFR-indexed SF CRT 

deals at the same time.

Q6. Updated to state the GSEs' legacy LIBOR 

replacement rate selections for SF CRT products.

Q7 (previous version). Deleted. The GSEs will not 

issue fixed coupon SF CRT deals.

Q9-Q11 (previous version). Deleted due to 

outdated content.

April 2023

Single-Family CRT Q8. FAQ added: “When is the last time that the 

GSEs will use the 1-month LIBOR benchmark for 

the CRT transactions?”

Q9. FAQ added: “When is the first time that the 

GSEs will use the spread-adjusted 30-day Average 

SOFR rate as a replacement for the LIBOR 

benchmark for legacy CRT transactions?”

Q10. FAQ added: “With the transition of the legacy 

CRT transactions after 6/30/2023, will there be any 

other changes regarding how the accrued interest 

will be calculated and paid in the future, such as 

the benchmark adjustment date, accrual period, 

payment date, and day count convention, etc.?”

Q11. FAQ added: “What spread adjustment will be 

used for the legacy CRT transactions after LIBOR 

cessation on 6/30/2023?”