Government Products
The MPF Government and MPF Government MBS products give Participating Financial Institutions the option to sell fixed-rate mortgage loans that are insured or guaranteed by government agencies and programs, including FHA, VA, HUD Section 184, and RHS Section 502.
| Features | MPF Government | MPF Government MBS | |
|---|---|---|---|
| Execution | Credit Enhancement Obligation: contingent liability of PFI | ||
| Credit Enhancement Fee Income: 6-12 basis points paid to PFI | |||
| Loan level/investor price adjustments | |||
| Underwriting | Loan terms: fully amortizing, up to 30-year fixed rate | • | • |
| 5/1, 7/1, 10/1 Adjustable Rate Mortgages (ARMs) | |||
| Occupancy: owner-occupied/second home | Owner-occupied only | Owner-occupied only | |
| Investment property | |||
| Mortgage insurance coverage required | • | • | |
| Fannie Mae Desktop Underwriter (DU) access included | |||
| Maximum LTV (%) | Per applicable government guidelines | Per applicable government guidelines | |
| Servicing | Servicing options: released or retained | • | Retained only |
| Remittance options: A/A, S/R, or S/S | • | ||
| Remittance options: A/A only | |||
| Remittance options: S/S only | • | ||
| Servicing fee income (bps) | 44 | 19-56.5 | |
| Delivery | Master Commitment: required; $5 million minimum Delivery commitments: mandatory | • | • |
| Master Commitment: required; $5 million minimum Delivery commitments: best efforts | |||
| Same-day loan delivery and funding | • | • | |
| Structure | Credit enhanced: FHLBank Chicago and PFI share credit risk | ||
| First Loss Account (bps) | |||
Product terms subject to change; contact your Sales Director for the most current product information.
PFI = Participating Financial Institution
A/A = Actual/Actual
S/R = A/A Single Remittance
S/S = Scheduled/Scheduled
How It Works
1
Lenders originate the loan.
Participating Financial Institutions (PFIs) originate eligible FHA, VA, or USDA-RHS government-insured or guaranteed loans for their borrowers.
2
Loans are delivered to the MPF Program.
PFIs sell the loans to their Federal Home Loan Bank under the MPF Government or MPF Government MBS products.
3
For MPF Government MBS, loans are pooled and securitized.
The Federal Home Loan Bank of Chicago aggregates the loans into Ginnie Mae-guaranteed mortgage-backed securities.
4
PFIs receive funding and servicing income.
Lenders gain liquidity from the loan sale and may continue servicing the loans, earning ongoing servicing fees while transferring the credit risk to the government agency.
Related Resources
Learn more about MPF and how we partner with participating members to enhance profitability and provide support for all secondary mortgage market needs.
MPF Program Guide
The MPF Program Guide contains a general overview of the program.
View More Guides
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Webinars
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Products Offered
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