The 11th District Cost of Funds Index (or the 11th District COFI) is an index published by the Federal Home Loan Bank of San Francisco and used by many mortgage lenders. The Federal Home Loan Bank of San Francisco has decided to stop publishing the 11th District COFI after January 31, 2022. As a result, due to factors outside of our control, all loans with interest rates based on the 11th District COFI (including yours) must transition to another index.
For more information on the discontinuation of the 11th District COFI, see this article from the Federal Home Loan Bank of San Francisco, available at:
After careful consideration of available options, First Republic will transition 11th District COFI-based loans to Freddie Mac’s Enterprise 11th District COFI Institutional Replacement Index (or the “Institutional Replacement Index”).
The Institutional Replacement Index is based on the Federal Cost of Funds Index (“Federal COFI”) plus/minus a spread adjustment. The spread adjustment will be equal to the five-year historical median spread between 11th District COFI and Federal COFI. The spread adjustment is meant to generally equate Federal COFI to 11th District COFI and results in what First Republic believes is a fair, reasonable and comparable substitute index.
We will take the same approach, utilizing the same replacement index, for both consumer and commercial loans.
“Federal COFI” stands for “Federal Cost of Funds Index.” Federal COFI has been in place for over 30 years. It is calculated as the sum of the monthly average interest rates for marketable Treasury bills and for marketable Treasury notes, divided by two, and rounded to three decimal places.
If you would like to compare the performance of the 11th District COFI to Federal COFI over time, click the gold “Edit Parameters” button on our historical rates page to add both indices to the graph. You can view performance as far back as 1986.
In February 2022, First Republic will replace the 11th District COFI with the Institutional Replacement Index administered by Freddie Mac.
Currently, the interest rate on your ARM is determined by adding the value of the 11th District COFI and a margin. When the 11th District COFI is no longer available, we will replace it with the Institutional Replacement Index to determine future interest rate and payment changes for your ARM. We will make this transition for you and in accordance with the terms of your loan documents. You do not need to take any action.
We will provide you with more information on this index and how this change will impact your loan in the coming months. Post conversion, this new index will be used to determine the interest rate for your ARM.
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