Members purchase stock in proportion to their borrowings from FHLB Boston (activity-based stock) and levels of certain assets (membership stock). The Bank's activity-based stock investment requirements are as follows:
- 3.0% of the principal balance of advances with original maturities of 1 day
- 4.0% of the principal balance of advances with original maturities of 2 days to 3 months
- 4.5% of the principal balance of advances with original maturities of over 3 months
Letters of credit
0.25% of the amount of the letter of credit
Mortgage Partnership Finance Program
Effective November 2, 2009, the Bank has temporarily adjusted to zero percent (0%) the activity-based stock investment requirement for certain loans that members sell to the Bank under the Mortgage Partnership Finance® (MPF®) program. This suspension of the activity-based stock investment is available for loans members sell to the Bank under master commitments entered into on or after Monday, November 2, 2009.
The activity-based stock investment requirement percentage is set as of the date a loan is funded and remains fixed for the life of the loan. Therefore, a member would not be required to purchase additional activity-based stock for a given loan, even if the activity-based stock investment requirement is subsequently adjusted by the Bank
The Bank's decision to temporarily suspend the stock requirement gives members the opportunity to take better advantage of the MPF program, and the suspension will remain in effect at the discretion of the Bank's board of directors. You will be notified at least 30 days in advance of the effective date of any subsequent change to the activity-based stock investment requirement.
The Bank retains the right to establish set limits on the total dollar amount of new master commitments that a single member may open during the suspension. Also note that this suspension is not retroactive. Loans sold under the 4.5 percent capital requirement will maintain that requirement for the life of the loan.