How Does The FHA ARM Program Work?
August 28th, 2008 By Peter G. Miller
The FHA ARM is a 30-year mortgage with payments that adjust annually. The program uses a Treasury or LIBOR index and a margin to determine annual rates.
Unlike toxic loans, with the FHA ARM there are no prepayment penalties and no exploding re-sets.
While the FHA ARM is a better financial product than a toxic ARM with prepayment penalties and gotcha clauses, an ARM is an ARM — unless you are financing on a short-term basis, say fewer than five years, you will likely do better with a fixed-rate loan.
For specifics, please speak with local lenders
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