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Mortgage Partnership Finance – MPF Direct

MPF Direct™ is a jumbo loan product that partners the MPF® program with Redwood Residential Acquisition Corporation (Redwood Trust), a real estate investment trust located in Mill Valley, California. This unique partnership offers Federal Home Loan Bank Participating Financial Institutions, or PFIs, the opportunity to access private capital when they sell into the secondary market, leveraging their FHLBank membership to obtain liquidity for loans up to $2.5 million.

The MPF Direct product benefits PFIs that want to:

  • Offer competitive fixed-rate and hyprid adjustable-rate, jumbo residential mortgage loans to their borrowers without Metropolitan Statistical Area restrictions

  • Sell the servicing rights

  • Receive very attractive all-in pricing (asset price + servicing released premium)

  • Continue the ability to cultivate and/or maintain relationships with their customers, and;

  • Transfer the interest-rate, prepayment, and credit risks of the jumbo loan to an investor

With no retained credit risk on loans sold under the MPF Direct product structure, PFIs have no risk-based capital or credit risk collateral requirements.


Features of the MPF Direct product

  • Maximum LTV: 90%
  • Loan Limits: up to $2.5 million; limits are adjusted for high-cost areas
  • Occupancy: Owner-occupied, second homes, and non-owner occupied
  • Property Type: 1 to 4 units
  • Delivery Commitment: Best efforts
  • Remittance: Servicing released only

PFIs that want the advantages of the MPF Direct product must obtain specific approval from FHLB Boston. Contact your secondary market sales manager or your relationship manager for more information.


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.

"MPF" is a registered trademark of the Federal Home Loan Bank of Chicago. The "MPF Mortgage Partnership Finance" logo, and "MPF Direct" are trademarks of the Federal Home Loan Bank of Chicago.

 
 
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