Reach More First-Time Homebuyers with the MPF Program

Reach More First-Time Homebuyers with the MPF® Program

by David Hardwick, Vice President of Lending, Clearview Federal Credit Union

After years as a portfolio lender, Clearview Federal Credit Union (Clearview) recently started selling conventional mortgages into the secondary market through the Federal Home Loan Banks’ Mortgage Partnership Finance® (MPF®) Program. With headquarters in Pittsburgh and roughly $2 billion in assets, Clearview provides consumer and business financial solutions to more than 110,000 credit union members in western Pennsylvania. We’re focused on financial empowerment and community impact, and one way we pursue both goals is by making homeownership more affordable for first-time buyers.

 Participating in the MPF Program has allowed us to:

• Expand our conventional loan offerings;
• Minimize interest-rate risk;
• Maintain liquidity and deploy proceeds to other areas of the credit union; and
• Earn downstream income by sharing in the credit risk for mortgages we sell.

By partnering with our local Federal Home Loan Bank of Pittsburgh (FHLBank Pittsburgh) and participating in the MPF Program, we’ve also gained access to tools that help us attract and benefit more mortgage borrowers in our communities—including first-time and low-income homebuyers:

Enhanced Pricing for Low-Income Borrowers and Low-Balance Loans
The MPF Traditional products recently introduced new Housing Impact pricing options for 30-year fixed loans for low- to very-low-income borrowers, in addition to already enhanced pricing for low-balance loans. Another tremendous benefit of MPF Traditional products is their simplified pricing model with no loan-level price adjustments. Together, these tools help us pass economic benefits through to more low- to moderate-income borrowers.

The Ability to Retain Servicing
First-time homebuyers are often new credit union members, and a mortgage loan can be the beginning of a decades-long relationship. Clearview takes great pride in providing high-quality service to our membership; so, we value the opportunity to retain servicing and stay in touch with the member throughout the life of the loan.

Grant Programs for Down Payment and Closing Costs
Eligible MPF loans can be combined with FHLBank Pittsburgh grant programs that provide meaningful assistance to borrowers who need it most. Through the First Front Door program, member financial institutions of FHLBank Pittsburgh can submit applications for grants of up to $15,000 to help with down payment and closing costs for income-qualified households, and the First Front Door Keys to Equity fund provides even greater assistance for minority and first-generation first-time homebuyers. These programs are well-known to realtors in our communities and increase Clearview’s visibility as a resource for first-time homebuyers.

Market Insight
Clearview’s partnership with FHLBank Pittsburgh and the MPF Program helps us access industry intelligence and stay up to date with what’s going on in our local housing markets and beyond. The better we understand current market dynamics, the better we can serve homebuyers.

For credit unions that have traditionally been portfolio lenders, the MPF Program offers a great opportunity to sell loans into the secondary market, take stress off the balance sheet, and minimize interest-rate risk, while retaining the ability to service members’ loans. To learn how the MPF Program could help your credit union serve more homebuyers in participation with your local Federal Home Loan Bank, contact us.