Additional MPF Traditional Government Accommodations for COVID-19 Loan Modifications

  • November 30, 2020
As borrowers near the end of the forbearance period, some may be unable to reinstate the loan due to financial hardship and may qualify for government agency loan modifications and/or payment deferrals. Presently, the Federal Home Loan Bank of Chicago (FHLBank Chicago) requires Mortgage Partnership Finance® (MPF®) Traditional Government loans to be repurchased if a modification is necessary. In an effort to simplify the process and to provide additional relief, FHLBank Chicago is allowing modifications on MPF Traditional Government loans.

What's Changing?

FHLBank Chicago will now allow loan modifications for MPF Traditional Government loans. Servicers are no longer required to repurchase these loans in order to facilitate a loan modification. Servicers should follow the guidance listed below for Government loans. Servicers must also follow the policies and guidance issued by the applicable Government Agencies.

  • Servicers work independently with the borrower and the applicable Government Agency to negotiate the terms of the deferment or modification while protecting the guaranty or insurance.
  • Servicers notify FHLBank Chicago of the agreed upon terms (see below). FHLBank Chicago will not review or approve the change of terms, as your role as the servicer is to ensure that the guaranty or insurance remains intact.*
  •  Servicers are required to submit Appendix B and an unexecuted draft agreement indicating the change of loan data for the purpose of updating systems only. FHLBank Chicago is relying on you in your role as the servicer to ensure the agreement is both enforceable and in compliance with the applicable Government Agency’s guidelines.


Notification Requirements for MPF Traditional Government Payment Deferrals

Notice of MPF Traditional Government loan modifications must be submitted to The following documents must be submitted by the 25th, or the prior business day if the 25th falls on a weekend or holiday, of the month in which the first payment under the payment deferral is due:
  • Appendix B (COVID-19 Deferral Plan Worksheet)
  • A draft (i.e., unsigned) agreement
  • Twelve month payment history for the subject mortgage
Within 25 days of the borrower signing the agreement, the agreement must be sent to the document custodian in accordance with MPF Program requirements.

As a reminder, MPF Government Mortgage-Backed Security (MBS) loans must follow the relief policies and guidance issued by the applicable Government Agencies.

*FHLBank Chicago reserves all rights under the PFI Agreement to require repurchase or other remedies if the loan modification or payment deferral negatively affects the applicable Government Agency’s guaranty or insurance.


We're Here to Help 

For questions or to submit an MPF Traditional Government loan modification, please contact the MPF Sales Support team at

Contact Us

Please direct all media inquiries to:

Casey Reidy 
Director, Communications

Heather Bockstruck
Assistant Director, Communications