MPF Products

​Community banks, thrifts, and credit unions all over the U.S. are teaming up with FHLBanks to access the secondary market. In turn, time-tested MPF products provide mortgage lenders the loan selling structures that best fit their needs.

 

 MPF products and features are outlined below. 

Credit Enhanced Products

MPF® Original

MPF Original allows you to share the credit risk associated with home mortgage finance with your Federal Home Loan Bank. MPF Original offers you the ability to originate, sell, and service fixed-rate, residential mortgage loans and receive a credit enhancement (CE) fee for sharing the credit risk. Your FHLBank 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 Original allocates future loan losses, if any, after borrower equity and private mortgage insurance are depleted between the FHLBank and you.

Features

• CE Fees: Up to 10 basis points (0.10%) annualized on the outstanding Master Commitment balances, paid monthly

• Remittance options: Actual/Actual, Actual/Actual Single Remittance, Scheduled/Scheduled

• Servicing Fees: 25 basis points (0.25%) paid monthly

Benefits

• Competitive execution

• Credit enhancement fee income paid monthly, if applicable

• Economic reward for quality loans

• Same-day delivery and funding

• Servicing-released options available

• No loan-level price adjustments

MPF® 125

MPF 125 allows you to share the risks associated with home mortgage finance with your Federal Home Loan Bank (FHLBank). MPF 125 offers you the ability to originate, sell, and service fixed-rate, conventional residential mortgage loans and receive a credit enhancement (CE) fee for sharing the credit risk. Your FHLBank manages the liquidity, interest rate, and prepayment risks while you manage the credit risk of the loans. The credit risk sharing sharing feature of MPF 125 allocates future loan losses, after equity and private mortgage insurance are depleted, between the FHLBank and you.

Features

• CE Fees: Up to 10 basis points (0.10%) annualized on the outstanding Master Commitment balances, paid monthly. The CE fee is performance-based, net of any losses.

• Remittance options: Actual/Actual, Actual/Actual Single Remittance, Scheduled/Scheduled

• Servicing Fees: 25 basis points (0.25%) paid monthly

Benefits

• Competitive execution

• Economic reward for quality loans

• Same-day delivery and funding

• Servicing-released options available

• No loan-level price adjustments

MPF® 35

MPF 35 allows you to share the risks associated with home mortgage finance with your Federal Home Loan Bank (FHLBank). MPF 35 offers you the ability to originate, sell and service fixed-rate, conventional residential mortgage loans and receive a credit enhancement fee for sharing in the credit risk. Your FHLBank 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 FHLBank and you.

Features

• Credit Enhancement Fees: A mutually agreed upon amount ranging from 7 basis points (0.07%) up to 14 basis points (0.14%) 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)

• Remittance Options: Actual/Actual, Actual/Actual Single Remittance, and Scheduled/Scheduled

• Servicing Fees: 25 basis points (0.25%) paid monthly

Benefits

• Competitive execution

• Economic reward for quality loans

• Same-day delivery and funding

• Servicing-released options available

• No loan-level price adjustments

Non-Credit Enhanced Products

MPF Xtra®

Sell us your fixed-rate, conforming loans and we will resell those loans through our partnership arrangement to Fannie Mae. When taking advantage of the MPF Xtra product you have the flexibility to:

• Retain the servicing rights, earn servicing fee income, and preserve the ability to cultivate and maintain relationships with customers or,
• Sell the servicing rights and receive a servicing-released premium.

No shared credit risk means there are no collateral or risk-based capital requirements.*

Features

• LTV ratios up to 97%
• Owner-occupied only
• HomeReady® purchase transactions for first-time home buyers
• Transactions for first-time home buyers
• Limited cash-out refinances and cash-out refinances
• DU® Validation Services (Income, Employment and Asset Validation) and option to use a Property Inspection Waiver for certain refinance transactions are available.
• Down payment assistance for qualified borrowers

Benefits

• Competitive execution
• Economic value for quality loans
• Retention of borrower relationships
• Access to Fannie Mae technology
       • Desktop Underwriter (DU®)
       • Collateral Underwriter (CU®)
       • Day 1 Certainty

MPF Xtra 3D

MPF Xtra 3D is a feature under the MPF Xtra product which provides down payment and closing cost assistance for creditworthy borrowers whose household income is at or below 80% of the HUD Area Median Income (AMI) limits for purchase transactions. MPF Xtra 3D reduces impediments to homeownership by: 

• Providing 3% Down Payment Assistance (DPA) based on the unpaid principal balance at time of loan purchase
• Reducing a borrower's mortgage payment through the elimination of mortgage insurance (MI)
• Reducing closing costs by eliminating Loan Level Price Adjustments (LLPAs)

MPF Xtra 3D loans must be underwritten according to the Guides, the MPF Xtra Guide and the MPF Xtra 3D Guide. Participating Financial Institutions (PFIs) may log into the eMPF Website to obtain the MPF Xtra 3D Guide, Frequently Asked Questions (FAQs) and HUD Area Median Income (AMI) Limits located in the Product Information section under the Resources header.   

MPF Xtra 3D Household Income Calculation Summary Form
MPF Xtra 3D Household Member Questionnaire Form

Best Efforts Delivery Commitment

Best Efforts Delivery Commitments are available under the MPF Xtra product. Federal Home Loan Bank (FHLBank) PFIs are able to take advantage of the MPF Xtra product, which offers:

• The transfer of interest-rate and prepayment risks as well as the credit risk of the associated loans to an investor
• Delivery Commitments under a Best Efforts option for individual loans, with no pair-off fees for non-delivery
• The ability to originate fixed-rate residential mortgage loans and deliver those loans into the seconadry market 
• Retention of the servicing rights and servicing fee income, preserving the ability to cultivate and maintain relationships with customers
• No collateral or risk-based capital requirements*

Who Should Take Advantage of this Option?

MPF Xtra Best Efforts Delivery Commitments are for any PFI that is actively engaged in mortgage lending in its community, has a high regard for the value of customer relationships, and seeks to more effectively manage its origination pipeline. If the associated loan closes, the PFI must deliver that loan under the Delivery Commitment; however, there is no pair-off fee assessed if the loan does not close and the Delivery Commitment expires. PFIs gain greater access to secondary market liquidity and minimize the associated interest rate risk due to market changes.

PFIs will continue to have the option of manually underwriting the loans or obtain access to Fannie Mae's Desktop Underwriter (DU) taking advantage of state-of-the-art technology. Utilizing DU reduces a PFI's loan origination representations and warrants to the investor. PFIs may utilize DU Validation Services (income, employment, and asset validation) and property inspection waiver features.

Benefits

• Receive a competitive execution with delivery flexibility
• Enhance pipeline management tools 
• Reduce exposure to interest rate fluctuations
• Realize economic value for quality loans 

*The FHLBanks do not provide 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® Direct

Work with us to originate and sell your jumbo loans through our partnership with Redwood Residential Acquisition Corporation (Redwood Trust), a real estate investment trust located in Mill Valley, CA. We bring you access to private capital and a leading jumbo investor.

MPF Direct allows you to:

 Offer competitive jumbo residential mortgage loans to your borrowers
 Sell the servicing rights 
 Maintain control of the underwriting process
 Continue the ability to cultivate and/or maintain relationships with your customers
 Receive attractive all-in pricing (asset price + servicing-released premium); and
 Transfer the interest-rate, prepayment and credit risks of the jumbo loans 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

 Maximum LTV: 90%
 No private mortgage insurance required
 Loan Limits: Up to $2.5 million; cash-out refinances up to $750,000
 Loan Types: Conventional, fully amortized fixed rate and 5/1, 7/1, 10/1 Hybrid ARMs
 Occupancy: Owner-occupied, second homes, and non-owner occupied
 Property Type: 1 to 4 unit owner occupied; 1 unit second home; 1 to 4 unit investment properties; condominiums (warrantable and non-warrantable); co-ops; PUDs, condotels
 Delivery Commitment: Best Efforts
 Servicing-Released only

*The FHLBanks do not provide 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 on this matter.

MPF® Government

The MPF Government product allows you to sell fixed-rate mortgage loans that are insured or guaranteed by government agencies to your local Federal Home Loan Bank (FHLBank). The loan programs that can be sold under the MPF Government product include:

• FHA                         Low down payment options
• VA                           Financing and down payment flexibility for military veterans
• RD Section 502       Flexible financing for rural and agricultural areas
• HUD Section 184    Affordable and flexible financing on Indian/Native American land

The MPF Government product offers you the flexibility to retain the servicing of loans sold to your FHLBank or take advantage of our servicing-released options. When choosing the servicing-released options, you would receive a competitive servicing-released premium from one of the MPF Program's approved servicing aggregators.

Use MPF Government if:

• You are looking for a competitively-priced government loan investor
• You are looking to fund loans more quickly and easily
• You are approved by the applicable government agency to originate and service loans
• You want a variety of mortgage loan options to meet the needs of your customers
• You appreciate having maximum flexibility in choosing your servicing and remittance option

How It Works

The FHLBanks are able to offer you competitive mortgage products and pricing through the MPF Program as a benefit to membership. When you sell government loans to your FHLBank, the FHLBank manages the liquidity, interest rate, and prepayment risks of the loans.

Benefits

• Competitive servicing retained execution
       • Choice of remittace options
Excellent servicing released execution
       • All-in execution = Asset Price + SRP
Same-day loan delivery and funding 

Depository institutions have no leverage capital or risk-based capital requirements for loans sold under the MPF Government product.*

MPF® Government MBS

MPF Government MBS is an MPF Program government loan product whereby the Federal Home Loan Bank of Chicago purchases government loans from eligible MPF Program participants. The purchased loans will be aggregated and pooled into securities guaranteed by the Government National Mortgage Association (Ginnie Mae). Loans that qualify under this product are fixed-rate mortgage loans insured or guaranteed by the following government agencies:  

FHA                          Low down payment options
VA                            Financing and down payment flexibility for military veterans
RHS Section 502     Flexible financing for borrowers in rural and agricultural areas

Use MPF Government MBS if:

You are looking for a competitively priced government loan investor
You are approved by the applicable government agency to originate and service loans
You want a variety of mortgage loan options to meet the needs of your customers
You have experience servicing with scheduled/scheduled remittance or sell servicing to an approved MPF servicer

How It Works 

The Mortgage Partnership Finance® Program offers you competitive government mortgage products and pricing as a benefit to membership in an FHLBank. You can choose to retain servicing or sell the servicing and receive a servicing released premium.  If you retain servicing, you'll report and remit payments on a scheduled/scheduled basis.   

A master commitment specificially for MPF Government MBS is required in order to participate in this product. You would underwrite loans in accordance with applicable government agency guidelines. Our competitive pricing and your servicing expertise (or the servicing released option), allows you to offer your customers access to the best mortgage products in the marketplace today.   

Benefits

Cash execution – securities pricing
Excellent servicing-released execution
Same-day loan delivery and funding
Depository institutions have no leverage capital or risk-based capital requirements for loans sold under the MPF Government MBS product*
Minimal overlays to government agency guidelines

 

Remittance Options

Actual/Actual Remittance*

Actual/Actual Remittance features an investor reporting and remittance option similar to agency actual/actual and a competitive up-front price. This option is structured so that Participating Financial Institutions transfer funds to their MPF Bank non-interest bearing custodial deposit account whenever the collected principal and interest net of servicing fees exceeds $2,500. PFIs will find the actual/actual remittance option particularly attractive for ease of operation, they value the up-front price benefit and they are knowledgeable in actual/actual investor reporting.

Characteristics

• Remittance Amount – Actual P&I collections, less a servicing fee
• Accounting Cut-Off Date – Falls on the last day of calendar month
• Investor Reporting – Reports distributed by the fifth business day following the cut-off
• Remittance Frequency – When collected P&I exceeds $2,500 net of servicing fees, and the account balance on the first business day of the month

Requirements

• Non-interest bearing custodial P&I account maintained at the FHLBank
Electronic investor-reporting
• Access to the eMPF® website 

*Please see the MPF Xtra Guides for Actual/Actual remittance requirements under the MPF Xtra product

 

Actual/Actual Single Remittance

Actual/Actual Single Remittance offers an alternative option to remit MPF principal and interest. This option features a single monthly remittance with a simple investor reporting process. The single remittance option provides a significant float income benefit for all P&I payments received in an accounting cycle. This float value results from all collections received in a calendar month being remitted on the 18th of the following month. Members will find this program attractive if they value the float income, are new to investor reporting, or prefer a simple remitting process.

Characteristics

• Remittance Amount – Actual P&I collections, less a servicing fee
• Accounting Cut-Off Date – Falls on the last day of calendar month
• Investor Reporting – Reports distributed by the fifth business day following the cut off
• Remittance Date – Date falls on the 18th of the month following the cut off, or the prior business day if the 18th is not a business day

 

Scheduled/Scheduled Remittance

Scheduled/Scheduled Remittance features a competitive up-front price and an investor-reporting concept similar to agency scheduled/scheduled. However, with the scheduled/scheduled option, scheduled monthly principal and interest is advanced through liquidation. A full month of interest for payoffs and curtailments is paid. Members will find this option attractive if they value the competitive up-front price and if they have experience utilizing this remittance type and sophisticated investor-reporting process. 

Characteristics

Remittance Amount

 1) Scheduled P&I, less a servicing fee (remitted the current month);

 2) Unscheduled principal (curtailments and payoffs remitted the month following receipt);

 3) 30-days interest expense on payoffs and curtailments

• Accounting Cut-Off Date – falls on the last day of calendar month
• Investor Reporting – reports distributed by the fifth business day following the cut-off
• Remittance Date – date falls on the 18th of the month following the cut off, or the prior business day if the 18th is not a business day

 

Servicing Released Partners

Loan servicing aggregators that partner with the MPF Program provide a unique benefit in their offering to purchase servicing. The servicing agreements or Servicing Transfer Manuals generally include a 'non-compete clause', meaning they will not solicit your customers for ancillary products and services that your institution may provide. PFIs should contact the MPF Bank in their district for information regarding servicing released options that may be available to suit their specific needs.

MPF Traditional Products (MPF Original, MPF 125, MPF 35, and MPF Government)

CMC Funding

CMC Funding Whole Loan Servicing Transfer Manual - MPF Traditional

CMC Funding Key Contacts 

Colonial Savings

Colonial Savings Concurrent Servicing Sale Manual

Colonial Savings Concurrent Servicing Sale SRP Schedule

MPF Government MBS

Nationstar Mortgage LLC, d/b/a Mr. Cooper (a service mark of Nationstar Mortgage LLC)

Nationstar Mortgage Concurrent Servicing Sale Manual

Nationstar Mortgage Key Contacts

MPF Xtra 

CMC Funding

CMC Funding Whole Loan Servicing Transfer Manual - MPF Xtra

CMC Funding Key Contacts 

Redwood Trust*

Redwood Whole Loan Servicing Transfer Manual - MPF Xtra

Redwood Key Contacts

* It has been announced Redwood will no longer accept new MPF Xtra Delivery Commitments (DCs) after September 29, 2017. All loan fundings under MPF Xtra DCs with Redwood must be completed on or before December 31, 2017.