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).
Product Details
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
- RHS Section 502 Flexible financing for borrowers in 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 option. When choosing the servicing-released option, you would receive a competitive servicing-released premium from the MPF Program's approved servicing aggregator.
Use MPF Government 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 appreciate having maximum flexibility in choosing your servicing and remittance option
How it Works
When selling government loans to your FHLBank, the FHLBank manages the liquidity, interest rate, and prepayment risks of the loans. The PFI is responsible for obtaining the applicable government insurance or guarantee, following all agency guidelines and requirements, closing the loan with the borrower, and selling the loan to their FHLBank.
Benefits
- Competitive servicing retained execution
- Choice of remittance 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.*
- Delegated Underwriting; DU and LPA maybe used to assist in making the underwriting decision
*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.
Community Lenders Share Their Experience
"The ability to originate loans and sell them through the MPF Traditional products without loan-level price adjustments gives us the flexibility to compete with other lenders. Sometimes members tell us they want to keep their business with our credit union but they’ve received a matching or even better quote than what we’ve initially offered. In these cases, the lack of LLPAs gives us the pricing flexibility we need to compete and continue to serve our membership without sacrificing profitability."
Daniel McLean
Vice President, Quality Control and Secondary Market Sales, Credit Union 1
"We appreciate the flexibility to either hold loans on our balance sheet until an opportune time or sell them immediately, with best efforts or mandatory lock execution—whatever market conditions require. In the current high-rate environment, having the ability to quickly move loans off the balance sheet in moments of market improvement has been especially helpful."
Russ Bernardo
Chief Lending Officer, OCCU
"As we’ve scaled up our mortgage operations, the MPF Traditional products have given TTCU the tools and resources to operate like a larger lender, with much greater flexibility in reporting requirements than other GSEs as well as the option to continue servicing our members’ loans."
Floyd Goode
Senior Vice President, Chief Lending Officer, TTCU Federal Credit Union
"Managing liquidity can be a challenge for lenders when interest rates rise. Texas Tech Credit Union originates a high volume of mortgages for our asset size, which means it’s important for us to sell and transfer loans promptly so we can turn around and provide loans to more members. With the MPF Traditional products, we’ve been able to complete this process quickly and easily, usually within 48 hours versus the seven to 10 days we’d expect with another investor."
Greg Couture
Mortgage Operations Director, Texas Tech Credit Union
"We’ve found the MPF Program to be a friendly introduction to the secondary market. The guidelines are exceptionally easy to follow, and gaining access to Fannie Mae’s Desktop Underwriter® through the Program has made the process even smoother."
Darlene Vigil
Assistant Vice President/Real Estate Manager, State Employees Credit Union
Remittance Options
Actual/Actual Remittance features a remittance option similar to agency actual/actual, with monthly reporting and competitive up-front price. This option is structured so that Servicers transfer funds to their FHLBank non-interest bearing custodial deposit account whenever the balance of the P&I Custodial Account (excluding Servicing Fees) exceeds $2,500 and then any remaining account balance on the first business day of the month after the accounting cut-off date.
Characteristics
- Remittance Amount – Actual P&I collections, less a servicing fee
- Accounting Cut-Off Date – Falls on the last business day of calendar month
- Investor Reporting – Reports submitted by the fifth business day following the accounting cut-off
- Remittance Frequency – Whenever the balance of the P&I Custodial Account (excluding Servicing Fees) exceeds $2,500 and then any remaining account balance on the first business day of the month after the accounting cut-off date.
Requirements
- Non-interest bearing custodial P&I account maintained at the FHLBank
- Electronic investor-reporting (using either an Excel or ASCII file)
- Access to the MPF Master Servicer's secure website, ServicerConnect®
- Remittance Amount – Actual P&I collections, less a servicing fee
- Accounting Cut-Off Date – Falls on the last business day of calendar month
- Investor Reporting – Reports submitted by the fifth business day following the accounting cut-off
- Remittance Date – The 18th calendar day of the month following the accounting cut-off. If the 18th falls on a weekend or holiday the remittance day is the business day prior to the18th.
- Electronic investor-reporting (using either an Excel or ASCII file)
- Access to the MPF Master Servicer's secure website, ServicerConnect®
- Remittance Amount
- Scheduled P&I, less a servicing fee (remitted the current month)
- Unscheduled principal (curtailments and payoffs remitted the month following receipt);
- 30-days interest expense on payoffs and curtailments
- Accounting Cut-Off Date – Falls on the last business day of calendar month
- Investor Reporting – Reports submitted by the fifth business day following the accounting cut-off
- Remittance Date – The 18th calendar day of the month following the accounting cut-off. If the 18th falls on a weekend or holiday the remittance day is the business day prior to the 18th.
- Electronic investor-reporting (using either an Excel or ASCII file)
- Access to the MPF Master Servicer's secure website, ServicerConnect®
MPF® Government MBS
MPF Government MBS allows approved lenders to sell fixed-rate government loans (FHA, VA, RHS Section 502) to the Federal Home Loan Bank of Chicago. These loans are then pooled into securities guaranteed by Ginnie Mae.
Benefits include competitive pricing, a variety of loan options, and scheduled/scheduled remittance servicing.
View MBSConventional / Conforming Loans
MPF Program offers conventional conforming loans with flexible remittance options to help manage liquidity and risk.
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