Question:

What is the value of the Fannie Mae 1-Year LIBOR rate?

Answer:

All LIBOR indexes including the 1-Year LIBOR rate are lower than the prime rate. As of April 30, 2008 the prime rate is 5%. In comparison, the 1-year LIBOR value reported for April 1st 2008 was 2.486% and for May 1st it is 3.078%.

The Federal Funds Target Rate will be lower than LIBOR indexes. Currently, effective Federal Funds Target Rate is around 2%.

The 1-Year Fannie Mae LIBOR rate is no longer in use.

Fannie Mae are a huge shareholder-owned company operating in the secondary mortgage market, trying to ensure that lenders have enough funds to offer low rate loans. As of July 2008, Fannie Mae discontinued the use of its 1-, 3-, 6- and 12-month LIBOR indexes. They suggested that a replacement rate is used based on the Wall Street Journal (WSJ) LIBOR rates.

Fannie Mae are not going to accept loans based on the Fannie Mae LIBOR indices and originated after the end of June, 2007. Historical Fannie Mae LIBOR values will be available on their website, and other online sources.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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