One of the attractive features of the mix of products available from the FHLBank Chicago is that we can pick and choose what works best for our bank as our needs evolve. From a strategic perspective, we view the FHLBank Chicago as a key partner because they meet our needs for contingent liquidity. They are one of our first considerations when we’re trying to make a competitive offering for nearly any type of client. The FHLBank Chicago offers an entire suite of funding products, and the Member Strategy and Solutions Team can help identify the best fit for our needs.
From a tactical perspective, we use advances to “match fund” affordable housing project loan terms so that we’re not taking on interest-rate risk on longer terms. We look to the FHLBank Chicago to provide letters of credit on our behalf when we’re involved in commercial deals requiring credit enhancements. We participate in the MPF Program, which offers a wide range of secondary mortgage products as well as strong pricing. To meet our community investment goals, we use both the DPP Program and the competitive AHP.
In 2017, a beautiful new project called The Villas at Vinegar Hill opened on the site of two previously demolished high-rises. The project, created in partnership with the Springfield Housing Authority, came to fruition with the help of a $700,000 competitive AHP award.
To the extent that we can match FHLBank Chicago products with client-specific needs, we leverage our shareholder value to do so. But membership value is affirmed by creating customer value, and that’s what the FHLBank Chicago helps us accomplish. In our world, that’s either a more lucrative source of funding or, more often, a more sophisticated funding structure and longer terms than we’re used to offering ourselves.