FHA Adjustable Rates Worth A Look...
They have been around for over 20 years and now may be a good time to consider them. With important safeguards not available on  conventional ARM loans,
The HUD-Backed version offers a combination of bargain rates and stability for
1st time home buyers and refinance shoppers.

The major differences are the lower margins and rate ceilings which protect the home owner during times of higher rates. These loans use the U.S. Treasury 1 year TBill average as their index. If the loan were to adjust today, the new rate would be 4.125%. If the treasury index were to jump to 4.95% (where it was one year ago) the ceiling of 1% maximum increase would kick in and the rate would go to 5.125%.

Combine these built-in safety features with a choice of longer guarantees (3 years and 5 years), and you have a potential alternative to the 30 year fixed rate guarantee.