Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans

fnma-svc-c-2-3-01

Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans.

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  id: fnma-svc-c-2.3-01
  authority: Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans
  description: Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans.
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    section: Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans
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      authority: Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans
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      paragraph_quote: 'C-2.3-01, Processing ARM Conversions to Fixed Rate Mortgage Loans (05/15/2019) Introduction This topic contains the following: Overview Determining Eligibility Criteria for Converting a First Lien ARM to a Fixed Rate Mortgage Loan Completing the Conversion Overview This topic provides requirements for processing ARM loan conversions to ﬁxed rate mortgage loans. Published May 13, 2026 224 The servicer must also follow the procedures in F-1-01, Servicing ARM Loans in order to complete the conversion of an ARM loan to a ﬁxed rate mortgage loan. Determining Eligibility Criteria for Converting a First Lien ARM to a Fixed Rate Mortgage Loan To be eligible for conversion to a ﬁxed rate mortgage loan, the servicer must conﬁrm that an ARM loan is current (or must be brought current by the conversion date), has an LTV ratio of 95% or less, and satisﬁes any other conditions speciﬁed under a negotiated contract. If the mortgage loan has negatively amortized, the servicer must obtain a new appraisal to determine the current LTV of the property, and whether the borrower will have to pay any funds to reduce the UPB to the amount required to achieve an LTV ratio equal to 95% of the current value of the property. Completing the Conversion The following table provides a list of all items required before the servicer can complete the conversion of an ARM to a ﬁxed rate mortgage loan. ✓ The servicer must have... Received any required appraisal report. Received from the borrower • any amount required to reduce the UPB, if applicable; • any other items as speciﬁed in a negotiated contract; and • a signed agreement acknowledging the changes to the mortgage note necessary to provide for the new ﬁxed interest rate. Sent a document custodian the original agreement, if Fannie Mae is holding the original note as a custody document. Performed any other actions as speciﬁed in the negotiated contract. Recent Related Announcements Published May 13, 2026 225 The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SVC-2019-03 May 15, 2019'

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Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed Rate Mortgage Loans

C-2.3-01, Processing ARM Conversions to Fixed Rate Mortgage Loans (05/15/2019) Introduction This topic contains the following: Overview Determining Eligibility Criteria for Converting a First Lien ARM to a Fixed Rate Mortgage Loan Completing the Conversion Overview This topic provides requirements for processing ARM loan conversions to ﬁxed rate mortgage loans. Published May 13, 2026 224 The servicer must also follow the procedures in F-1-01, Servicing ARM Loans in order to complete the conversion of an ARM loan to a ﬁxed rate mortgage loan. Determining Eligibility Criteria for Converting a First Lien ARM to a Fixed Rate Mortgage Loan To be eligible for conversion to a ﬁxed rate mortgage loan, the servicer must conﬁrm that an ARM loan is current (or must be brought current by the conversion date), has an LTV ratio of 95% or less, and satisﬁes any other conditions speciﬁed under a negotiated contract. If the mortgage loan has negatively amortized, the servicer must obtain a new appraisal to determine the current LTV of the property, and whether the borrower will have to pay any funds to reduce the UPB to the amount required to achieve an LTV ratio equal to 95% of the current value of the property. Completing the Conversion The following table provides a list of all items required before the servicer can complete the conversion of an ARM to a ﬁxed rate mortgage loan. ✓ The servicer must have... Received any required appraisal report. Received from the borrower • any amount required to reduce the UPB, if applicable; • any other items as speciﬁed in a negotiated contract; and • a signed agreement acknowledging the changes to the mortgage note necessary to provide for the new ﬁxed interest rate. Sent a document custodian the original agreement, if Fannie Mae is holding the original note as a custody document. Performed any other actions as speciﬁed in the negotiated contract. Recent Related Announcements Published May 13, 2026 225 The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SVC-2019-03 May 15, 2019

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