Last reviewed 10-31-2026Short-Sale.com Editorialglossary

Conversion Formula

FreddieMac

Updated 10-31-2026

Conversion Formula

For Convertible ARMs, the Conversion Formula is the methodology, set forth in the Note, for establishing the Note Rate upon conversion of the adjustable interest rate to a fixed interest rate. The Conversion Formula refers to a published required net yield plus a specified number of basis points. Convertible ARMs are not eligible for sale to Freddie Mac.

FreddieMac Glossary

FreddieMac · p. 9

Need help?

Ask more questions about Conversion Formula in Help. You'll get answers for your situation.