Freddie Mac Announces Replacement of COFI Index
On January 31, 2022, the Federal Home Loan Bank of San Francisco will cease publishing the 11th District Monthly Weighted Average Cost of Funds Index (COFI). For any loans or securities indexed to COFI that Freddie Mac has previously purchased or issued, Freddie Mac must select a replacement index to be used after January 31, 2022.
Freddie Mac today announced that we anticipate the replacement index for COFI will be a new index administered by Freddie Mac. This new index, called the Enterprise 11th District COFI Replacement Index (Ent 11th COFI Repl), will be based on the Federal Cost of Funds Index (Federal COFI) currently published by Freddie Mac, with a spread adjustment.
Ent 11th COFI Repl = Federal COFI with Spread Adjustment
We expect the Ent 11th COFI Repl to be published by Freddie Mac on the last business day of every month, starting February 28, 2022 (for the month of January 2022) on Freddie Mac’s web page dedicated to the replacement index. A link to the web page will be provided in a future communication.
While Freddie Mac has determined the Ent 11th COFI Repl to be the best replacement for loans and securities indexed to COFI, Freddie Mac continues to support the use of the Secured Overnight Financing Rate (SOFR) for new-issue products.
To learn more about the COFI transition, including additional details on the spread adjustment, key transition milestones, and recommended actions for stakeholders to consider as they manage the transition, please visit the Freddie Mac Reference Rate web page, COFI FAQs and COFI Playbook. The playbook also includes information specifically for each impacted product: Single-Family and Multifamily Adjustable-Rate Mortgages (ARMs) and Collateralized Mortgage Obligations (CMOs).