The Cost of Funds Index was down for the fourth consecutive month.

In January, COFI was 3.970%, according to the Federal Home Loan Bank of San Francisco today. The index was down from 4.072% in December and has fallen each month since September. In January 2007, COFI stood at 4.392%.

The index is calculated based on the cost of funds for 11th District FHLB members headquartered in Arizona, California and Nevada. During January, $404.1 billion in average total funds was used in the COFI calculation.

Another index used for adjustable-rate mortgages is the 1-year Treasury, stood at 1.77% today, tumbling from 2.33% a month earlier, according to U.S. Treasury Department data.

ARMs accounted for 15.0% of all applications tracked in the Mortgage Bankers Association's weekly survey released yesterday. A month earlier, ARM share was just 8.6%.