Freddie Mac Single-Family Seller/Servicer Guide Section 8502.1 — ARM Servicing and reporting

Freddie Mac Single-Family Seller/Servicer Guide Section 8502.1 — ARM Servicing and reporting

8502.1: ARM Servicing and reporting (08/13/25) An ARM has a Note Rate that adjusts periodically based on a specified Index. The specific features of an ARM vary depending upon the terms of the Note. All ARMs must be accounted for and reported under the net yield accounting reporting method, as described in Section 8301.2(a), and are reported via the transmission of the Loan-Level Transaction. Under this method, Freddie Mac receives its proportionate share of principal and interest collected each month including any Negative Amortization activity for the period. For purposes of reporting to Freddie Mac, interest is computed by multiplying the Ending UPB of the current Accounting Cycle of a loan by the Accounting Net Yield (ANY), using a 30-day month/360-day year. Note: See Chapters 8301 through 8304 for the accounting and reporting requirements for ARMs. See Chapter 8303 for remittance requirements. 8502.2: Rate changes on ARMs and notification requirements (07/09/25) This section contains requirements related to: ■ Determining the new Note Rate ■ Notifying the Borrower ■ Notification of the new Accounting Net Yield (ANY) (a) Determining the new Note Rate The Servicer must adjust the Note Rate on an ARM in accordance with the provisions set forth in the Note and any applicable Adjustable-Rate Riders. The Note will specify the Index on which any adjustments must be based, as well as other factors that must be used to determine the new Note Rate. These factors include, but are not limited to: ■ The dates on which the Note Rate may change (Interest Change Date) ■ The date on which the Index value used to calculate the new Note Rate is determined, usually expressed as a number of days (known as the Lookback Period) Freddie Mac Single-Family Seller/Servicer Guide Chapter 8502 As of 08/13/25 Page 8502-2 ■ The Margin, which is the number of percentage points that must be added to the current Index value to establish the new Note Rate ■ The limitations on the amount that the Note Rate may change at the first adjustment, subsequent adjustments and during the life of the Mortgage (Initial Cap, Periodic Cap and Life Cap) and any associated rounding rules Upon each Note Rate change, the Servicer must calculate a new monthly payment amount based on the new Note Rate that is sufficient to fully amortize the UPB of the ARM over the remaining term. Prepayments on ARMs will only be accepted if the Index is available for the DDLPI reported that corresponds to the prepayment. (b) Notifying the Borrower With respect to each ARM serviced for Freddie Mac, the Servicer must correctly calculate any and all adjustments to the interest rate or the monthly payment and give to the Borrower all notices of adjustment of interest rate and monthly payments in strict accordance with the requirements of applicable law and with the terms of the Note and the Security Instrument. With respect to ARMs, in the notices of adjustment in the interest rate and monthly payment provided the Borrower before the effective date of the change, the Servicer must inform the Borrower that the Index value used to calculate the new interest rate is: ■ For LIBOR-indexed ARMs with interest rate adjustments based on a lookback date after July 3, 2023, as applicable and as published on the website of Refinitiv Limited (Refinitiv): ❑ FTSE USD IBOR Consumer Cash Fallback 1-Month* ❑ FTSE USD IBOR Consumer Cash Fallback 6-Month* or ❑ FTSE USD IBOR Consumer Cash Fallback 12-Month* *The following disclaimer has been provided by London Stock Exchange Group plc and Freddie Mac takes no responsibility for its contents: FTSE USD IBOR Cash Fallbacks are provided by London Stock Exchange Group plc (“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. ■ For SOFR-indexed ARMs, the 30-day Average SOFR as published by, or on the website of, the Federal Reserve Bank of New York Freddie Mac Single-Family Seller/Servicer Guide Chapter 8502 As of 08/13/25 Page 8502-3 ■ For Constant Maturity Treasury (CMT)-indexed ARMs, the 1-year Weekly CMT, 3-Year Weekly CMT, and 5-Year Weekly CMT, as applicable, as published on the website of, or otherwise made available by, the Board of Governors of the Federal Reserve System (i.e., H.15 Release - Selected Interest Rates) (c) Notification of the new ANY Freddie Mac will notify the Servicer via the ARM notification report of the revised ANY that the Servicer will be required to send us on an ARM in accordance with the product requirements set forth at the time of purchase. The ARM notification report will be available through the Freddie Mac Service Loan Level Reporting tool (see Exhibit 88, Servicing Tools). The Servicer must verify the rate change notification information. If there are any differences or omissions, the Servicer must notify Freddie Mac of the discrepancy via the Freddie Mac Servicing Data Corrections tool (see Exhibit 88) within the same Accounting Cycle the ARM notification report is published in the Freddie Mac Loan Level Reporting tool. Do not return the notification if the information on it is correct and complete. The new ANY must be used for the Accounting Cycle date indicated in the notification. In the month of the Interest Change Date, the Servicer must report the forecasted scheduled interest for the next Accounting Cycle based on the new rate. The Servicer will be liable for all net yield interest deficiencies that result from differences in calculations between the ANY that Freddie Mac provides the Servicer and the Servicer’s calculations. Depending on the next Interest Change Date at the time of Mortgage delivery, the Servicer may not receive notification from Freddie Mac prior to the effective date of the new ANY.

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