AMPF On Balance Sheet allows you to share various risks associated with home mortgage finance with FHLB Dallas. FHLB Dallas manages the liquidity, interest rate and prepayment risks of the loans while you manage the credit risk of the loans. Explore each MPF On Balance Sheet product below to see which one best fits the needs of your institution.
Here is what differentiates MPF On Balance Sheet
MPF On Balance Sheet products provide many benefits to you, the Participating Financial Institution (PFI), depending on the product such as competitive execution, credit enhancement fee paid monthly, economic reward for quality loans, same-day delivery and funding, servicing-released options available and no loan level price adjustments.
MPF Original and MPF 125
- Credit Enhancement Fees: Up to 10 basis points (.10%) annualized on the outstanding Master Commitment balances, paid monthly.
- The MPF 125 Credit Enhancement fee is performance based while the MPF Original is not.
- Credit Enhancement Fee: A mutually agreed upon amount ranging from seven basis points (0.07 percent) up to 14 basis points (0.14 percent) annualized on the outstanding Master Commitment balances made up of two components.
- Fixed rate paid monthly beginning the month after delivery; and
- Performance-based portion paid monthly beginning the 13th month after delivery after deducting any losses (up to the amount of the First Loss Account).
How Risk Sharing Works
MPF On Balance Sheet allows you to share the credit risk associated with home mortgage finance with FHLB Dallas. The MPF Original credit risk sharing structure has an additional three layers of loss protection. Here is how each product’s First Account Loss (FLA) is unique.
First Loss Account (FLA)
- MPF 35: FLA is typically equal to 35 basis points (0.35%) of the funded amount of all the loans in a Master Commitment.
- MPF 125: FLA is equal to 100 basis points (1.00%) of the funded amount of all the loans in a Master Commitment.
- MPF Original: The monthly accrual rate of the FLA is 4 basis points (0.04%). The FLA starts at zero and builds over time calculated and accrued monthly, on the outstanding principal balance of the loans in a Master Commitment.
Offer lower rates to help members become first-time homeowners or step into a larger home and maintain closer relationships with your customers through the wide range of options available. FHLB Dallas offers servicing retained or released options.
- Actual/Actual Single Remittance
Questions about specific products? You can view more information on the MPF program such as FHLB Dallas publications
, product sheets
, white papers
and video library