The Federal Home Loan Bank of Chicago announced Monday it plans to issue mortgage-backed securities guaranteed by the Government National Mortgage Association, or Ginnie Mae.

The new product, known as MPF government mortgage-backed securities, aims to provide smaller mortgage lenders with a reliable way to sell home loans. It will allow the Federal Home Loan Bank to buy government-insured loans from lenders, hold those loans on the balance sheet, and pool them into Ginnie Mae-guaranteed securities which can then be sold to investors.

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