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LIBOR Transition FAQs

Freddie Mac Multifamily Floating-Rate Loans and Securities

and Freddie Mac Multifamily Credit Risk Transfer (MFCRT)

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 

commercial purpose (including redistribution) without a license. Please contact LSEG D&A (formerly Refinitiv) if a 

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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Freddie Mac - Multifamily Floating Rate-Loans and Securities

Q1. When did Freddie Mac Multifamily stop purchasing LIBOR-based floating-rate loans?

Effective January 1, 2021, Freddie Mac stopped purchasing LIBOR-indexed floating-rate loans.

Q2. Why is Freddie Mac Multifamily using SOFR in its new floating-rate offering?

We are following the guidance from the ARRC. To better understand the ARRC’s position on SOFR and how 

it addresses the LIBOR issues, please see the ARRC's LIBOR transition page.

Q3. What resources are available to learn more about SOFR?

Please visit our LIBOR Transition webpage for information, updates and links to recommended resources.

Additionally, we encourage you to send questions to our LIBOR transition team at 

MFLIBOR@freddiemac.com.

Q4. When did floating-rate loans based on SOFR become available for quoting and purchase?

On September 29, 2020, we purchased the first floating-rate loan that uses an index based on SOFR. We

started quoting SOFR-indexed floating-rate loans on September 1, 2020, and concurrently ceased issuance of new 

LIBOR-indexed quotes.

Q5. For legacy MF LIBOR loans, what benchmark index will the GSEs use when LIBOR is no longer available or no 

longer representative?

The Federal Reserve Board implemented the Adjustable Interest Rate (LIBOR) Act which was signed into 

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 regulations, 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.

Q6. A borrower would like to switch from LIBOR to 30-day Average SOFR prior to June 30. Is that permitted? 

Floating-rate notes that are indexed to LIBOR and are part of the underlying collateral for Freddie Mac 

securities will need to wait until LIBOR ceases after June 30, 2023 to make the transition.

Q7. What do Optigo® lenders and other Freddie Mac servicers need to do in preparation for newly originated SOFRindexed loans?

Our objective is to minimize impacts to established reporting and remitting practices followed by our 

servicing community. SOFR readiness requires servicers to assess their internal processes and systems in 

order to ensure timely and effective implementation of a SOFR index rate.
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Q8. Is SOFR volatility a concern?

Freddie Mac and othermarket participants currently use a backward-looking SOFR compounded average for 

many of their products which is less volatile than single-day rates. To better understand the ARRC’s position 

on SOFR and its volatility, please see "About SOFR" on the ARRC's LIBOR transition page.

Q9. How will interest rate caps be affected by the transition to SOFR?

Third-party interest rate caps that reference a LIBOR-based index (whether now in place or, with respect to 

replacement or renewal caps, purchased after the date of these FAQs) will transition to a SOFR-based index

only in accordance with their governing documents and the loan documents. 

As of January 15, 2021, floating-rate loan borrowers are no longer permitted to purchase initial LIBORbased cap agreements. Instead, only SOFR-based cap agreements are permitted. 

Q10. Which SOFR index will be used for new loan and security offerings?

The index for our SOFR loans and securities will be the 30-day Average SOFR. That index will be used for 

floating-rate loans across all our product lines — Conventional, Targeted Affordable Housing and Small 

Balance Loans. Also, interest will accrue on a calendar-month basis, just as is currently done with existing 

LIBOR-based products.

Q11. Will Freddie Mac change the methodology for sizing floating-rate loans as part of the transition?

No, Freddie Mac’s methodology for sizing floating-rate loans will not change as part of the transition.

Q12. How will SOFR-indexed loan pricing compare with LIBOR? Will loan spreads increase?

Loan pricing is evaluated routinely to ensure alignment with market conditions; therefore, any changes will

be market-driven and will not be a direct result of our transition to SOFR. Of note, spread hold periods will 

not be affected by the transition to SOFR.

Q13. How are Optigo lenders expected to access the index?

Optigo lenders can access the New York Fed's website for published SOFR averages for 30, 90 and 180 days, 

as well as a SOFR index.

Q14. Do legacy Freddie Mac floating-rate securities require certificate holder consent or a vote to determine the

alternative index?

Legacy floating-rate securities do not require certificate holder consent or a vote in order to change from 

LIBOR to an alternative index.

Q15. How is the interest rate for a legacy LIBOR multifamily loan and each interest period calculated?

The interest rate calculation method set forth in the related Multifamily Note must be followed. In most cases, the 

Multifamily Notes provide that the variable interest rate calculated for each interest period is equal to the Index 
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Rate for such interest period plus the Margin. The Index Rate for a legacy LIBOR loan is equal to the sum of the 

applicable LIBOR replacement index (the 30-day Average SOFR rate) plus the applicable spread adjustment. Both 

of those values are published to the 5th decimal place. That method of determining the Index Rate is consistent 

with the ARRC approach. Any rounding convention to be applied should be determined pursuant to the terms of 

the Multifamily Note or otherwise be consistent with Freddie Mac servicing practices.
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Freddie Mac - Multifamily Credit Risk Transfer (MFCRT)

Q1. Will Freddie Mac Multifamily adopt ARRC recommended fallback language in new issuance multifamily credit 

risk transfer deals?

Currently, we have not issued, nor do we plan to issue any LIBOR-based Multifamily credit risk transfer 

deals. To date, our only Multifamily CRT security offerings have been called “Multifamily Structured Credit 

Risk (SCR or MSCR) Notes.” We also have another CRT offering through reinsurance form, “Multifamily 

Credit Insurance Pool,” which will not be covered here due to the fixed insurance premium obligation 

nature without any LIBOR or floating-rate component.

Q2. Is Freddie Mac Multifamily planning to issue non-LIBOR-based SCR deals?

Reducing LIBOR exposure for both Freddie Mac Multifamily and our investors is very important to us. In 

January 2021, Freddie Mac Multifamily successfully completed its first SOFR-based issuance (MSCR 2021-

MN1) with broad support from a large number of key CRT market participants.

Q3. Will Freddie Mac Multifamily consider issuing both LIBOR-based and SOFR-based SCR deals at the same time?

No. We have not issued LIBOR-based SCR deals and we plan to issue only SOFR-based SCR deals for any 

new issuance.

Q4. What benchmark index will Freddie Mac Multifamily use in non-LIBOR-based SCR deals?

Freddie Mac has structured and plans to continue to structure SOFR-indexed MF CRT transactions so that 

they use 30-day Average SOFR as the reference rate, with a determination date of 2 business days (2BD) 

prior to the beginning of the accrual period.

Q5. Will Freddie Mac Multifamily’s SCR and Freddie Mac’s STACR programs be aligned fortransitioning to non-LIBORbased issuance?

Freddie Mac Multifamily and Single-Family intend to align the move to non-LIBOR-based CRT offerings, to 

ensure the credit risk transfer transitions are consistent across both types of credit risk transfer offerings 

as well as between the GSEs.

Q6. Will Freddie Mac Multifamily consider issuing fixed coupon SCR deals?

Though our previous SCR Notes deals were fixed-coupon-based, we don’t have current plans to issue 

additional fixed-coupon SCR deals.

Q7. Should I be concerned that SOFR-based SCR securities will become less liquid?

We expect that most broker/dealers will be able to provide a similar level of support to the general CRT 

secondary market when we move to SOFR, including making a two-way market in any SOFR-based CRT 

securities.
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Q8. What happens to legacy SCR Notes deals after the LIBOR transition?

All previous Multifamily SCR Notes deals were fixed coupon based and will not be impacted by the LIBOR 

transition.
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Summary of Prior Changes

Section Summary of change

July 2020

Freddie Mac –

Multifamily Floating 

Rate Loans

Q4. The September 1, 2020, quote start date for 

SOFR-indexed loans has been included.

Q8. Detail regarding LIBOR-based cap 

optionality for SOFR-indexed loans has been 

added, with a reference to the LIBOR Transition 

Playbook for additional detail.

Q10. Now confirms that the sizing methodology 

for floating-rate loans will remain unchanged as 

part of the transition to SOFR.

August 2020

Freddie Mac –

Multifamily Floating 

Rate

Loans

Q4. The September 1, 2020, quote start date for 

SOFR-indexed loans has been included.

Q8. Detail regarding LIBOR-based cap optionality 

for SOFR-indexed loans has been added, with a 

reference to the LIBOR Transition Playbook for 

additional detail.

Q10. Now confirms that the sizing methodology 

for floating-rate loans will remain unchanged as 

part of the transition to SOFR.

September 2020

Freddie Mac Floating 

Rate Loans 

Q1. Updated with the discontinuance of LIBOR-

index loans

Q4. Updated to reflect the start of quoting 

process for SOFR-indexed ARMs on 9/1

Q5. Eliminated the language regarding LIBOR no 

longer being available or representative

Q6. Removed the language pertaining to 

assessing impacts and systems

Q8. Changes to make interest rate cap language 

present tense 

Q9. Updated to reflect present tense language 

around SOFR being the replacement index

Q11. Updated to reflect present tense language 

around SOFR-based index pricing 

Q13. Removed

Q13. New FAQ around legacy floating rate loans 

and certificate holder consent on 

replacement index 

Freddie Mac –

Multifamily Credit Risk 

Transfer

Q4. Updated the Benchmark Index with current 

state language

October 2020 

Freddie Mac- Multifamily 

Floating Rate Loans and 

Securities

Q5. Updated language regarding replacement 

index for legacy LIBOR products and addressing 

legacy LIBOR floating rate loans next steps.
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Section Summary of change

Freddie Mac Multifamily 

Credit Risk Transfer

Q3. Updated language to issue only SOFR-based 

SCR deals for new issuances.

Q5. Replaced ‘announce’ with ‘communicate’

December 2020

Freddie Mac –

Multifamily Floating 

Rate Loans and 

Securities

Q1. Removed dates that are no longer current. 

Freddie Mac Multifamily 

Credit Risk Transfer

Q3. Deleted paragraph with regards to LIBOR 

issuance

April 2021

Multifamily Floating 

Rate Loans and

Securities

Q1. Updated to reflect we no longer buy LIBOR 

loans

Q8. Revised to address termination of LIBOR Cap 

option 

MF CRT Q2, 4 & 9: updated related to timing, etc. 

Deleted original Q5 & Q8.

Q14: New question related to the March 5th IBA 

Announcement

October 2021

Freddie Mac Multifamily 

Floating Rate Loans & 

Securities

Q.9 Removed Term SOFR reference until 

transition to Term SOFR has been made 

definitively.

Freddie Mac Multifamily 

Credit Risk Transfer

Q.4 Updated to match the same response used in 

Q3 of SF CRT.

June 2022

Freddie Mac Multifamily 

Floating Rate Loans & 

Securities

Q14 (from prior publication). Deleted, as the 

question is now outdated.

Freddie Mac Multifamily 

Credit Risk Transfer

No significant changes.

January 2023

Freddie Mac Multifamily 

Floating Rate Loans & 

Securities

Q5. Updated to state the GSEs' legacy LIBOR 

replacement rate selections for MF floating rate 

loans and securities.

Freddie Mac Multifamily 

Credit Risk Transfer

Q4. Updated language regarding the structuring 

of Freddie Mac’s SOFR-indexed MF CRT 

transactions.

April 2023

Freddie Mac Multifamily 

Floating Rate Loans & 

Securities

Q6. FAQ added: “A borrower would like to switch 

from LIBOR to 30-day Average SOFR prior to June 

30. Is that permitted?”

Freddie Mac Multifamily 

Credit Risk Transfer

No significant updates.

June 2023

Freddie Mac Multifamily 

Floating Rate Loans & 

Securities

Q15. FAQ Added: How is the interest rate for a 

legacy LIBOR multifamily loan and each interest 

period calculated?
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