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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