On October 16, Freddie Mac issued Single-Family Seller/Servicer Guide Bulletin 2012-21, which revises certain requirements for adjustable rate mortgages (ARMs) and provides guidance regarding Home Possible Mortgages. For mortgages with settlement dates on or after July 1, 2013, ARMs with initial periods of five years or less cannot have initial or periodic caps that exceed 2%. In connection with the Home Possible Mortgage program and based on the 2012 area median income estimates, Freddie Mac revised the definition of “underserved area.”