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Mortgage Partnership Finance – MPF 35

The MPF 35™ product allows you to share the risks associated with home mortgage finance with your Federal Home Loan Bank. MPF 35 offers you, a Participating Financial Institution, the ability to originate, sell, and service fixed-rate, conventional residential mortgage loans and receive a Credit Enhancement Fee for your credit expertise. The Bank manages the liquidity, interest rate, and prepayment risks of the loans while you manage the credit risk of the loans. The credit risk sharing feature of MPF 35 allocates any future loan losses, after equity and private mortgage insurance are depleted, between the PFI and the Bank.


  • Competitive execution
  • Credit Enhancement Fee income paid monthly
  • Economic value for quality loans
  • Same day delivery and funding
  • Closed loan delivery flexibility
  • Servicing fee income
  • Servicing released options available
  • After funding note certification
  • Electronic processing through the eMPF® website
  • No loan level price adjustments


  • 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: 5, 15, 30, 45, and 60 calendar days, mandatory delivery
  • Pricing: Premium and discount pricing available
  • Credit Enhancement Fees
    A mutually agreed upon amount ranging from seven basis points (0.07 percent) up to 14 basis points (0.14 percent) annualized on the outstanding Master Commitment balances made up of two components:

    – A fixed rate portion paid monthly beginning the month after delivery; and
    – A performance-based portion paid monthly beginning the 13th month after delivery after deducting any losses (up to the amount of the First Loss Account)

Credit Risk Sharing – How it works

Borrower equity and, for loans with an original loan-to-value ratio greater than 80 percent, private mortgage insurance are the initial layers to absorb losses. The MPF 35 credit structure has three additional layers of loss protection:

  • First Loss Account
    The first layer of loss, called the First Loss Account or FLA, is absorbed by FHLB Boston. The amount of the FLA is typically equal to 35 basis points (0.35 percent) of the funded amount of all the loans in a Master Commitment.

  • Credit Enhancement Obligation -
    Any losses in excess of the FLA are allocated to the second layer Credit Enhancement obligation, or CE, which is provided by the PFI. This loss protection amount is equal to the total credit enhancement for a Master Commitment minus the FLA. The PFI may choose to enter into an agreement with a third party, such as a supplemental mortgage insurer, to obtain coverage that would reduce their exposure to losses resulting from their CE obligation.

  • Excess Losses
    Any loan losses that exceed the FLA and CE layers are absorbed by the Bank.

The MPF Program 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.

The "MPF Mortgage Partnership Finance" logo and "MPF 35" are trademarks of the Federal Home Loan Bank of Chicago.

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