Bulletin No.: 2019-06
March 13, 2019
SUBJECT: Changes to Collateral Eligibility Requirements for Members
The Federal Home Loan Bank of Dallas (Bank) recently revised its collateral eligibility requirements as they relate to multifamily participations, document exception rate calculations and mortgage appraisal thresholds.
The Bank will now accept as eligible collateral participation interests in first mortgage loans secured by multifamily properties where the member retains the original note. This change aligns with the Bank’s practice for first mortgage single-family residential and commercial loans. Beginning on March 15, 2019, the Bank will provide collateral availability for the participation percentage of the mortgage loan that has been retained, subject to the loan meeting the Bank’s established eligibility requirements as identified in its Loan Collateral Eligibility Requirements Guide. In addition, on that same date, the Bank will implement an adjustment to collateral availability for multifamily participations that were identified during the 2018 onsite collateral verifications. As a result, members may receive the additional borrowing capacity without having to wait until their next collateral review. The collateral value for the participation interests will be subject to the Bank’s established prices, haircuts and changes in the reported unpaid principal balances for mortgage loans secured by multifamily dwellings.
Document Exception Rate Calculations
The Bank has modified its calculation of exception rates for document exceptions identified during an onsite collateral verification for loans pledged on blanket lien. Beginning with the 2019 onsite collateral verifications, the Bank may, in its sole discretion, assign partial credit if the loans sampled during the collateral verification fail to fully satisfy the Bank’s eligibility or documentation requirements. A listing of the partial adjustments can be found in Exhibit A, “Partial Exceptions Criteria,” of the Loan Collateral Eligibility Requirements Guide.
Mortgage Appraisal Thresholds
The Bank has also modified the mortgage appraisal thresholds for multifamily, commercial real estate, commercial construction, land, small business and small farm loans originated on or after April 9, 2018. For loans originated on or after that date, the minimum dollar value for which a full appraisal is required will now be consistent with the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and Uniform Standards of Professional Appraisal Practice (USPAP standards).
For more information, please review the Loan Collateral Eligibility Requirements on
fhlb.com or contact Collateral Services at 800.541.0597.
SVP and Chief Banking Operations Officer