source:
  type: guide
  id: va-m26-7-ch07-t06
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 6 — Adjustable
    Rate Mortgages
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 6 — Adjustable
    Rate Mortgages.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch07-t06-full
  canonical_id: va-m26-7-ch07-t06-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 6 — Adjustable
    Rate Mortgages
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 6 — Adjustable
      Rate Mortgages
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 0e2735cf8ca44400
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:74297ad4fadd5e592b5688f5567170f8c128f7c9749dd06edd59e735a69099d8
    paragraph_quote: '6. Adjustable Rate Mortgages Change Date March 11, 2019 • This
      chapter has been revised in its entirety. a. General Information Concerning
      ARMs An ARM loan offers adjustable interest rates based on negotiated initial
      fixed interest rates coupled with periodic adjustments to the interest rate
      over time. Hybrid ARMs have longer initial fixed rates of 3, 5, 7, or 10 years,
      while a “traditional” ARM allows for an annual adjustment after 1 year. b. Interest
      Rate Adjustments Traditional ARMs: Interest rate adjustments occur on an annual
      basis. The annual interest rate adjustments are limited to a maximum increase
      or decrease of one percentage point. Additionally, interest rate increases are
      limited to a maximum of five percentage points over the life of the loan. Hybrid
      ARMs: If the initial contract interest rate remains fixed for less than 5 years,
      the initial adjustment is limited to a maximum increase, or decrease of one
      percentage point and the interest rate increase over the life of the loan is
      limited to five percentage points. If the initial contract interest rate remains
      fixed for 5 years or more, the initial adjustment will be limited to a maximum
      increase or decrease of two percentage points and the interest rate increase
      over the life of the loan will be limited to six percentage points. c. Underwriting
      an ARM ARM loans that may adjust after 1 year must be underwritten at one percentage
      point above the initial rate. Hybrid ARMs with a fixed period of 3 or more years
      may be underwritten at the initial interest rate. VA Pamphlet 26-7 Revised Chapter
      7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-30'
  judgment: false
