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The Mortgage Partnership
Finance (MPF®) program is a competitive secondary-market
program offered to participating Federal Home Loan Bank
(Bank) members.
The MPF Program:
- Is a more profitable and efficient
alternative for lenders than selling mortgages to
a secondary-market agency. Instead of paying costly
guarantee fees, MPF lenders receive monthly credit-enhancement
fees for managing the credit risk of the loans they
originate.
- Utilizes the respective strengths
of the Federal Home Loan Banks and their member financial
institutions. Each partner is responsible for
what it does best.
- Allows lenders to retain their customer relationships.
Why sell valuable credit relationships to a secondary-market
agency?
- Lets lenders control the underwriting process.
Each MPF loan is made only if the lender decides to
share the credit risk of its own customer.
How Does the MPF Program Work?
- You originate five-, 10-, 15-, 20-,
and 30-year fixed-rate mortgages on one- to four-family,
owner-occupied, residential properties or second homes.
- The Bank buys or funds those mortgages.
- You retain some of the credit risk.
In return, the Bank pays you credit-enhancement fees.
The credit risk is allocated against your risk-based
capital.
- The Bank bears the catastrophic credit
risk and all of the interest-rate and prepayment risk.
- You service the mortgages or have them
serviced by a Bank-approved subservicer.
Pricing and Execution
- Pricing indications are available to
participating financial institutions (PFIs) through
the eMPF Web site.
- Electronic versions of origination and
servicing guides are available through All Regs®.
How To Participate
- Submit a PFI application (no charge).
- Send data on representative loans for
evaluation.
- Receive PFI approval (within approximately
60 days).
- Sign a master commitment, a best estimate of the
amount of loans to be delivered to the Bank.
- Execute delivery commitment(s), the mandatory commitment(s)
of the amount to be delivered to the Bank.
- Deliver and service the loans.
For More Information
Contact our MPF staff at mpf@fhlbboston.com
or 1-888-675-0556.
"Mortgage Partnership Finance"
and "MPF" are registered trademarks of the
Federal Home Loan Bank of Chicago.
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