The Secured Overnight Financing Rate (SOFR) is based on actual transactions in the Treasury repurchase (repo) market, where extensive trading happens daily. This is the market where investors offer borrowers overnight loans backed by their U.S. Treasury bond assets.

The Alternative Reference Rates Committee (ARRC) has selected SOFR as its preferred alternate index for U.S. dollar-denominated SOFR contracts.

SOFR ARMs eligible for sale to Freddie Mac use an index based on a 30-day compounded average of SOFR (SOFR Index). The Federal Reserve Bank of New York (New York Fed) publishes 30-, 90- and 180-day compound SOFR averages available here.

For information on Freddie Mac-owned loans that are transitioning from the London Interbank Offered Rate (LIBOR) index to CME Term SOFR plus a tenor spread adjustment (as published by Refinitiv Limited), refer to the Reference Rates Transition website.