Adjustable Rate Mortgage (ARM)
CFPB
Updated 08-20-2026
Adjustable Rate Mortgage (ARM)
An adjustable rate mortgage (ARM) is a type of loan for which the interest rate can change, usually in relation to an index interest rate. Your monthly payment will go up or down depending on the loan’s introductory period, rate caps, and the index interest rate. With an ARM, the interest rate and monthly payment may start out lower than for a fixed-rate mortgage, but both the interest rate and monthly payment can increase substantially. Learn more about how ARMs work and what to consider (https://www.consumerfinance.gov/o wning-a-home/loan-options/#anchor_interest-rate_361de536a4acf8).
CFPB Mortgage Terms
CFPB · p. 1
FHA Single Family Housing Policy Handbook Glossary November 26 2025
Updated 08-20-2026
Adjustable Rate Mortgage (ARM)
periodically based on an index plus a margin. Adjusted As-Is Value (applicable to 203(k) only) For purchase transactions, the Adjusted As-Is Value refers to the lesser of: • the purchase price less any inducements to purchase; or • the As-Is Property Value. For Refinance transactions, the Mortgagee must obtain an as-is appraisal to determine the Adjusted As-Is Value when the existing debt on the Property plus the cost of repairs exceeds the After Improved Value, or the Property was acquired within 12 months of the case number assignment date.
FHA Single Family Housing Policy Handbook Glossary November 26 2025
p. 2
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