August 2026 Peer Analysis and Balance Sheet Strategies Update
FHLBank Boston’s strategies team discusses what is occurring on depository member balance sheets and reviews important trends in the capital markets, economy, and banking industry.
The MPF Program uses a layered credit enhancement structure in which losses are absorbed sequentially by borrower equity, private mortgage insurance (if applicable), the First Loss Account, the PFI’s Credit Enhancement Obligation, and finally FHLBank Boston.
This case study examines whether newly originated residential mortgages should be held in portfolio or sold through the Mortgage Partnership Finance® (MPF®) 35 Program, emphasizing that a mortgage’s coupon rate alone does not determine its value. Using a sample $10 million mortgage pool, the analysis found that selling through MPF 35 and redeploying the proceeds generated significantly greater five-year economic value than holding the loans, while also transferring interest rate and prepayment risk.
How it Works: Mortgage Partnership Finance® (MPF®) Program
The Mortgage Partnership Finance® (MPF®) Program supports FHLBank Boston members in extending housing financing to their communities. MPF allows members to access liquidity, tailor risk, and focus on their competitive advantage: credit risk in their communities.
May 2026 Peer Analysis and Balance Sheet Strategies Update
FHLBank Boston’s strategies team discusses what is occurring on depository member balance sheets and reviews important trends in the capital markets, economy, and banking industry.
Advance Solutions for Funding Construction Lending
Utilizing advances for construction loans can keep interest-rate and liquidity risks manageable and align funding with the characteristics of the loans.
Our Annual Report illustrates how the Bank’s steady financial performance and member partnerships are advancing New England’s economy and enabling us to fulfill our mission each day.
