The MPF® program provides an alternative to holding fixed-rate loans in portfolio or selling them to the secondary market.
Under the MPF Original product, the risks associated with home mortgage finance are shared with the Federal Home Loan Bank of Boston to maximize comparative advantages. With MPF Original, members can market and service fixed-rate, residential mortgage loans — and instead of getting charged a fee by the secondary market investor, members receive a fee for their credit expertise. The Bank manages the liquidity, interest rate, and prepayment risks of the loans while the member shares in the management of the credit risk of the loans.
- Competitive execution
- Credit Enhancement Fee income paid monthly
- Economic value for quality loans
- Same day funding
- Closed loan delivery flexibility
- Servicing fee income
- Servicing released options available
- After funding note certification
- Electronic processing through the eMPF® website
Any approved institution actively engaged in mortgage lending that values the income derived from originating and servicing loans and is currently a member of a participating FHLBank can benefit from MPF Original.
- Term: Up to 30 years fully amortizing
- Maximum LTV: 95%
- Loan limits: Agency conforming
- Occupancy: Owner occupied (1-4 units) and second homes
- Property type: All types (except co-ops and investment)
- Underwriting: Follow MPF Origination Guide and MPF Underwriting Guide guidelines (LP/DU decisions considered)
- Remittance: Actual/Actual, Actual/Actual Single Remittance, Scheduled/Scheduled
- Master Commitment size: $5 million minimum, optional delivery
- Delivery Commitment: 3, 10, 20, 30, and 45 business days, mandatory delivery
- Pricing: Premium and discount pricing available
- Credit Enhancement Fee: Typically 10 bps paid on outstanding Master Commitment balance
With MPF Original, the first layer of losses for each Master Commitment (following any primary MI coverage) is paid by the Bank up to the amount of the First Loss Account (FLA) in the amount of 4 bps per year. The member then provides a second loss credit enhancement obligation (CE Obligation) for each Master Commitment. Loan losses beyond the first and second layers are absorbed by the Bank. The member is paid a fixed Credit Enhancement Fee for providing the CE Obligation.
*The FHLB is not providing accounting or legal advice with respect to the accounting treatment of MPF program assets and liabilities. The participating member is expected to consult with its own accountants and attorneys for advice on this matter. >
"MPF," "Mortgage Partnership Finance," "eMPF," and "MPF Xtra" are registered trademarks of the Federal Home Loan Bank of Chicago.