The Federal Home Loan Bank of Chicago says the Home Loan Bank System's mortgage partnership finance program has funded more than $1 billion of residential mortgages-and $800 million more is in the pipeline.
The program helps fund fixed-rate loans for single-family homes. The median loan is $94,400, and about 53% of the loans have been made to low- and moderate-income borrowers, the bank said.
The program is expected to grow and compete in the secondary market, said Alex J. Pollock, president and chief executive of the Chicago bank.
Banks and thrifts originate and service the loans. Lenders pay no guarantee fees and take on no interest rate risk, but they retain credit risks and get credit enhancement fees from the Home Loan bank. The Home Loan bank manages the funding, interest rate, liquidity, and prepayment risks.
The program is available to members of the Home Loan banks in Chicago and Dallas. In Chicago, 44 thrifts and banks are participating, and more than 100 institutions are joining, the bank said.
The Dallas Federal Home Loan Bank has funded more than $340 million of loans since it entered the program in October. Three other Home Loan banks have expressed interest.