INDIANAPOLIS - Three more Federal Home Loan banks have received approval to buy home mortgages from member banks.

The Home Loan Banks of Cincinnati, Indianapolis, and Seattle, which had refused to join a secondary mortgage program founded by the Home Loan Bank of Chicago, announced Tuesday that the Federal Housing Finance Board has granted them formal permission to move forward with a program of their own. The Mortgage Partnership Program has been operating as a pilot test for several months.

Eight of the 12 Home Loan Banks already belong to Mortgage Partnership Finance program created by the Chicago Home Loan Bank in 1997. But the Cincinnati, Indianapolis, and Seattle banks opted to develop their own version in order to retain more local control. The San Francisco Home Loan Bank is the only one not affiliated with either program.

Under both programs, banks receive payment from the Home Loan Banks for retaining a portion of the credit risk. Other secondary lenders, notably Fannie Mae and Freddie Mac, charge banks a fee for taking on that credit risk.

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