The Mortgage Partnership Finance (MPF) Program, established in 1997, is a business-to-business partnership between Federal Home Loan Banks (FHLBanks) and local mortgage lenders (Participating Financial Institutions or PFIs). It serves as a secondary market for residential mortgages, allowing PFIs to sell their conventional fixed-rate and government-insured mortgage loans to their FHLBank. This model helps lenders manage liquidity, interest rate risk, and credit risk, while also providing a source of fee income. Unlike other secondary market models, the MPF Program involves a credit risk-sharing arrangement, which can provide better pricing to the lender. The program is administered by the Federal Home Loan Bank of Chicago on behalf of the entire FHLBank System.

Founded in

United States