source:
  type: guide
  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.
  coverage_tier: operative
obligations:
- id: fnma-svc-c-2.3-01-full
  canonical_id: fnma-svc-c-2.3-01-full
  section: Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to Fixed
    Rate Mortgage Loans
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide C-2.3-01 — Processing ARM Conversions to
      Fixed Rate Mortgage Loans
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
    snapshot_id: cf63a82bbb4adfba
    fetched_at: '2026-05-22T23:53:19Z'
    content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
    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'
  judgment: false
