About Us

Prior to the introduction of the MPF Program, community lenders had two choices when originating conventional, fixed-rate mortgage loans:

• Hold the mortgage loans in their loan portfolios
• Sell the loans directly or through a conduit to a secondary market investor

The majority of homebuyers prefer a 15- or 30-year fixed-rate mortgage; however, these assets can be complicated to hold given their long terms and inherent complex funding options. Holding these loans in portfolio until they are paid off through a refinance or to maturity requires the lender to bear all risks involved, which include credit, interest rates, liquidity, prepayment and servicing.

Many community lenders have had difficulty properly funding and hedging the interest rate and prepayment risks of long-term fixed rate mortgage loans. It is simply not practical in many cases for lenders to retain these risks. To mitigate the risks over the years, mortgage lenders began to sell their fixed-rate loans to secondary market investors, including Government Sponsored Enterprises (GSEs).

Selling mortgages in the secondary market typically involved the lender paying guarantee fees based on a loan's principal balance to secondary market investors to protect the investor against credit losses on the mortgages sold. These fees have consistently risen several basis points per year. Smaller community lenders were typically charged higher fees because they are not able to generate sufficient volumes to qualify for the discounts that may be given to larger originators, even though they originate loans that are of high credit quality.

Noting the lack of competition in the secondary market for these high-quality loans, the FHLBanks recognized an opportunity to be a competitive outlet for mortgage funding, and designed the MPF Program. The MPF Program's premise rests on the simple, yet powerful, idea that combining the credit expertise of a local lender with the funding and hedging advantages of an FHLBank will create a stronger, more economical and efficient method of financing residential mortgages.

The MPF Program provides mortgage lenders the best options of mortgage lending - lenders retain the credit risk in their loans and transfer the interest rate and prepayment risks to the FHLBank. With the MPF risk sharing products, Participating Financial Institutions (PFIs) receive credit enhancement fees from the FHLBanks for the life of the loans that they deliver.

PFIs are able to preserve their customer relationships and are paid to manage the credit risk of their customers. The MPF Program is proud to celebrate more than 25 years of product innovation and outstanding service. At a time when other secondary market participants are consolidating their services and/or increasing delivery and guarantee fees, PFIs may be paid credit enhancement fees by the FHLBanks. The FHLBanks continually assess the needs of PFIs and provide products and services to empower PFIs and their customers with the financial strength they need to increase homeownership in their communities.

Application Information
To enroll in the MPF Program, a member must complete an application with its participating FHLBank. Please contact your representative at your FHLBank to have an application sent to you. Your FHLBank may request information such as the institution's latest audited financial statements.

Please Note
To be eligible to participate, an institution must first be a member of an FHLBank that offers the MPF Program. If your institution is not a member of a participating FHLBank and you would like more information on how to become one, contact your representative at your FHLBank. You can visit the About FHLBank System page on the Federal Housing Finance Agency website to find out which district serves your state.

In addition to being a member of a participating FHLBank, an institution must have experience in originating and servicing loans and have the ability to report mortgage loan activity under either a scheduled/scheduled or actual/actual remittance structure(s).

Why should I be interested in the MPF Program?
Lenders who have joined the MPF Program and are currently delivering loans say they are competitive in their marketplace and have improved profits. FHLBank members typically experience an increase in their mortgage revenue, thanks to a credit structure that rewards them for high-quality loans and loan performance.

How can I become eligible and participate in the MPF Program?
You may be eligible to join if: (1) you are a member of an FHLBank that offers the MPF Program, (2) you have experience originating loans, and (3) you have the ability to service and report loan activity under either a scheduled/scheduled or actual/actual remittance structure(s).

If I want to sell servicing, may I still participate in the MPF Program?
Yes. All of the MPF products offer options for members of participating MPF Banks to sell servicing, along with the sale of the loan asset. Additionally, eligible institutions may sell servicing on a flow/bulk basis.

I currently sell to the agencies. Do I need to do anything different to my processes?
Very little - there are few differences between the MPF Program and the agencies. However, there are some process differences between our Non-Credit Enhanced and Credit-Enhanced products, primarily due to the credit enhancement process. We have electronic capabilities for sending and receiving transmissions of data and reports, along with direct deposits and debits of funds to your account at the FHLBank.

What do I need to know about underwriting loans for the MPF Program?
You have increased control and decision-making authority over the loans you originate. For standardization purposes, we ask that our members follow either the MPF Origination Guide underwriting guidelines, or those from the applicable government agencies. Depending on the MPF product selected, we also consider credit decisions from approved automated underwriting systems.

How much does it cost to apply?
There is NO application fee charged for the MPF Program.

Who should I contact to get started?
Call your contact at your FHLBank or MPF Program marketing representative for help submitting an application or more information about the MPF Program. To locate a contact at your participating FHLBank, click here.