Mortgage Partnership Finance® (MPF®)
Learn more about how MPF works by attending any of a number of webinars designed to address advanced issues and answer questions you may have about the program. For the complete calendar, click here.
Introduced in 1997, the MPF Program gives residential
mortgage originators that are members of the FHLBank
System a competitive alternative to selling their mortgages
to secondary market agencies. Since its inception, the
program has already assisted hundreds of thousands of
households nationwide with their home financing needs.
for a more comprehensive description of the MPF Program.
Benefits of the MPF Program
- The MPF Program combines the credit expertise of
a local member with the funding/hedging advantages
of a regional FHLBank to provide a more profitable
alternative to funding mortgages.
- Members can sell their fixed-rate mortgages but
pay no guarantee fees.
- For the Original MPF product, FHLBank Pittsburgh pays a credit enhancement fee to participating members for managing the credit risk of the loans.
- The MPF Xtra product enables member financial institutions to offer competitive interest rates for long-term, fixed-rate mortgage loans, without assuming any of the credit risk associated with a Credit Enhancement obligation. Loans sold under the MPF Xtra product are not placed on FHLBank’s balance sheet but are sold to another secondary market investor.
Based on risk tolerance, remittance type and the dollar
amount of production, program options include closed-loan
purchases and actual/actual or scheduled/scheduled remittance.
In addition, servicing released options for Original MPF, MPF Government, and now MPF Xtra® programs are available. Choose from:
- Original MPF®
- MPF Government
- MPF Xtra®
All MPF Program options offer electronic access through
the eMPF™ Web site for easy online submission
and instant status reports as well as the usual manual
method of conducting business. The eMPF Web site is
a secure transactional site that makes it possible for
members to conduct secondary market transactions in
a high-speed, safe environment over the Internet.
To take advantage of the MPF Program, contact Jeff Acquafondata at 412-216-1637 or Deanna Copeland at 1-800-288-3400, option 3.
A participating FHLBank member institution originates a conventional, FHA, VA or RHS fixed-rate mortgage loan and makes the decision to sell it via the MPF Program.
Value: The FHLBanks buy conventional, FHA and VA and RHS 502 loans, which makes the benefits of the MPF Program — competitive pricing and increased profitability — available for an increased number of originations.
The MPF Program offers the member a variety of transactional structures to accommodate different lender preferences and risk tolerances and assures same-day funding.
Value: Members choose the MPF structure that suits their unique needs — assuring efficiency and top execution for each situation.
Through the MPF Program, the FHLBanks are the only secondary market agency to offer same-day funding — providing funds faster to member institutions. The customer relationship and credit risk (in varying degrees, depending on the MPF structure used) are managed by the local member.
Value: The member retains the vital customer relationship —- keeping the door open to cross-sales.
Credit risk is most effectively managed by the professional closest to the loan. The member controls the underwriting — leading to more approvals of quality loans. Because credit risk remains with the originating member, no guarantee fee is charged by FHLBank. For the Original MPF product, FHLBank pays a credit enhancement fee to the member that is managing credit risk.
Value: "No guarantee fee" means a significant cost savings to the member institution.
The payment of a credit enhancement fee to the member provides additional fee income. FHLBank handles the funding, interest rate and prepayment risks.
Value: These risks are managed by an entity knowledgeable about global capital markets and the hedging of interest rate risk — assuring astute strategic decisions and a sense of security for the member.
The member either services the loan, retaining servicing fee income, or chooses the servicing released alternative and sells the loan to the FHLBank and the servicing to an approved PFI servicer.
Value: Again, the valuable customer relationship is maintained — promoting cross-sales and strengthening this key relationship.
FHLBank and the member institution combine their respective strengths to better manage the risks inherent in long-term mortgages.
Value: Each partner is responsible for what it does best — resulting in an efficient and mutually beneficial structure.
The FHLBanks are owned by their member institutions. Therefore, FHLBank shares all financial advantages with its stockholders via competitive MPF pricing and fees — leading to an improved bottom line for members.
Value: Participating members provide their valued customers with a vital service — an affordable means to purchase or refinance homes of their own.
The "MPF" logo, "Mortgage Partnership Finance," "MPF," "MPF Xtra," and "eMPF" are registered trademarks of the Federal Home Loan Bank of Chicago.