- April 13, 2021
- Bulletin No: 2021-09
Collateral Verifications – 2021 Assigned Exception Rates
The Federal Home Loan Bank of Dallas' (Bank) Member Products and Credit Policy (MPCP) requires periodic reviews of members on blanket collateral status to determine the ineligible loan and document exception rates to be used to calculate borrowing capacity. Ineligible loan rates are determined by desktop reviews, and document exception rates are determined by onsite collateral verifications. Ineligible loan and document exception rates become outdated and are no longer valid after the end of the year following the most recent review.
For members on blanket collateral status that have never had a desktop review or onsite collateral verification, or that have outdated ineligible loan and/or document exception rates, the MPCP also requires the application of default exception percentage rates. The exception rates are assigned based on a member’s classification as a credit union (CRU) or, for banks and thrifts, as either a Community Financial Institution (CFI) or Large Financial Institution (LFI) as defined in the MPCP.
Effective April 19, 2021, new members, members that have never had a desktop review or onsite collateral verification and members that had their last review prior to 2020 will be assigned the default rates set forth below. These default rates are derived from the results of all onsite and desktop reviews conducted by the Bank during 2019 and 2020.
| Collateral Type | Exception Type | CFI Median | LFI Median |
CRU Median |
|---|---|---|---|---|
| Single Family | A: Ineligible Loans | 5.6% | 14.5% | |
| B: Documentation Exception on Eligible Loans | 3.0% | 1.5% | ||
| Combined = A + B | 8.6% | 16.0% | ||
| Multifamily | A: Ineligible Loans | 5.0% | ||
| B: Documentation Exception on Eligible Loans | 5.0% | |||
| Combined = A + B | 10.0% | |||
| Commercial Real Estate | A: Ineligible Loans | 12.0% | ||
| B: Documentation Exception on Eligible Loans | 5.0% | |||
| Combined = A + B | 17.0% | |||
| Commercial Construction | A: Ineligible Loans | 2.6% | ||
| B: Documentation Exception on Eligible Loans | 3.8% | |||
| Combined = A + B | 6.4% | |||
| Land | A: Ineligible Loans | 12.0% | ||
| B: Documentation Exception on Eligible Loans | 3.8% | |||
| Combined = A + B | 15.8% | |||
| Home Equity | A: Ineligible Loans | 5.0% | 5.0% | |
| B: Documentation Exception on Eligible Loans | 8.1% | 8.1% | ||
| Combined = A + B | 13.1% | 13.1% | ||
| Small Business | A: Ineligible Loans | 47.3% | ||
| B: Documentation Exception on Eligible Loans | 17.4% | |||
| Combined = A + B | 64.7% | |||
| Small Farm | A: Ineligible Loans | 12.5% | ||
| B: Documentation Exception on Eligible Loans | 17.4% | |||
| Combined = A + B | 29.9% | |||
For additional information, please contact the Bank's Collateral Services department at 800.541.0597 (option 1).
Sincerely,
Gustavo Molina
SVP, Chief Banking Operations Officer