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Federal Home Loan Bank of Dallas to offer MPF Xtra product

The Federal Home Loan Bank of Dallas has joined the Mortgage Partnership Finance (MPF) program, in a bid to provide the MPF Xtra product, and enable qualifying members to sell fixed-rate, conforming mortgage loans into the secondary market.

Through MPF Xtra, home loans are aggregated and sold to the Federal National Mortgage Association (FNMA), also known as Fannie Mae, enabling small and mid-sized lenders to maintain customer relationships.

Shunning interest rate, prepayment, and credit risks generally linked with long-term, single-family loans, the new product also allows the companies to compete effectively in the mortgage lending market.

FHLB Dallas president and CEO Terry Smith said that the product will allow community lenders to leverage the strength of FHLB Dallas to assist families buying new homes or lower the price of their current homes.

"The beauty of MPF Xtra is that it lets smaller lenders provide the same competitively priced loans as larger banks while keeping the personal, local touch their customers appreciate," Smith added.

With the recent launch, FHLB Dallas joins six other federal home loan banks that offer the MPF Program in Boston, Chicago, Des Moines, New York, Pittsburgh, and Topeka.

FHLB Dallas had total assets of $35.2bn as of 30 September 2012, and supports housing and community development by providing competitively priced advances and other credit products to over 900 members and associated institutions in Arkansas, Louisiana, Mississippi, New Mexico and Texas.