Federal Home Loan Bank of Des Moines

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1 Federal Home Loan Bank of Des Moines

2 Federal Home Loan Bank System Established by government charter in 1932, the Federal Home Loan Bank System is the oldest housing government sponsored enterprise (GSE). The FHLBank System is comprised of 12 regional wholesale banks that serve nearly 8,000 members, including community banks, credit unions, insurance companies, community development financial institutions and thrifts. The FHLBanks, which are governed by the Federal Housing Finance Agency, are cooperatively owned by their members, operate independently with their own boards of directors and are registered with the Securities and Exchange Commission. Their unique structure as a cooperative allows the FHLBank System and its members to continuously play an important role in building, sustaining and nurturing communities throughout the nation.

3 Seattle Boston Des Moines Chicago Indianapolis Pittsburgh New York City San Francisco Topeka Cincinnati Dallas Atlanta The FHLBanks are headquartered in: Atlanta Boston Chicago Cincinnati Dallas Des Moines Indianapolis New York Pittsburgh San Francisco Seattle Topeka The core mission of the FHLBank System has remained the same for eight decades: to provide readily available, low-cost funds to local lenders so they can invest in their communities. The FHLBanks are one of the largest sources of mortgage credit in the United States. The Banks play a vital role in keeping credit flowing to local communities by offering favorable rates and terms to their member financial institutions and providing cost-effective financing for housing, community and economic development. The FHLBanks are selfsupporting and receive no taxpayer funds. Due to sound management practices, the FHLBank System has never taken a credit loss on a loan.

4 Federal Home Loan Bank of Des Moines The Federal Home Loan Bank of Des Moines is a valuable partner to more than 1,200 member financial institutions throughout Iowa, Minnesota, Missouri, North Dakota and South Dakota. FHLB Des Moines provides readily available, low-cost liquidity to local lenders in all economic cycles to meet their communities needs. Members are offered a variety of products to help lower their funding costs, manage liquidity, control risk and provide a range of mortgage services to their customers. Advances can be structured at fixed and variable rates with or without embedded options and for maturities up to and including 20 years. Membership In order to become a member of FHLB Des Moines, a financial institution must complete an application process and also meet collateral, capital and credit eligibility requirements as determined by the Bank. Once approved for membership, membership stock must be purchased and additional stock retained to support activity as it occurs. FHLB Des Moines works closely with its regulators to assure safety and soundness and actively monitors the credit profiles, asset quality and creditworthiness of its members given that collateral requirements can change as credit conditions change. Members

5 Meeting Member Needs FHLB Des Moines has two principal lines of business: secured member loans (advances) and purchasing member mortgages. Advances Advances low-cost loans made by FHLB Des Moines to member institutions increase the availability of residential mortgage and community investment credit, thus lowering borrowing costs for homebuyers, small businesses and other community borrowers. Advances are a nearly instantaneous way to secure liquidity and ensure that financial institutions have sufficient funds to meet the credit needs of their communities. FHLB Des Moines members must pledge high-quality collateral, in the form of mortgages, government securities or loans on small business, agriculture or community development projects to qualify for advances and must purchase activity-based stock for their borrowing. Mortgage Programs Innovative FHLB Des Moines mortgage programs provide competitive alternatives to members who sell conventional and government insured mortgage loans into the secondary market. Through these programs, members who cannot participate in the mortgage market because of their small size have an opportunity to access the benefits of the secondary mortgage market. The Mortgage Partnership Finance (MPF ) Program creates a unique partnership resulting in a better, more efficient method of financing mortgage loans. Under the MPF Program, mortgage lenders continue to manage all aspects of their customer relationships, rather than selling loans to a secondary market agency or a private sector aggregator. Instead of paying costly guarantee fees, lenders receive monthly fees for managing the credit risk of the loans they originate. The MPF Xtra product is an off-balance sheet alternative that provides more small- and mid-sized FHLB Des Moines members with an additional avenue to access competitive mortgage pricing. The Bank s MPF Provider, FHLB Chicago, entered into an agreement with Fannie Mae in which Fannie Mae purchases conventional conforming loans and takes on the pricing, market and credit risk. The originating member institution has the option of retaining the servicing rights or selling servicing to an approved servicer. With MPF Xtra, participating members do not provide collateral and are not required to purchase activity stock in FHLB Des Moines.

6 Community Investment Programs FHLB Des Moines sets aside 10 percent of its net earnings for affordable housing programs each year. Grants are awarded to members to help them meet the housing needs of low- to moderate-income households and other special populations in their communities, including seniors, persons with disabilities, homeless individuals and families and first-time homeowners. The funds provided through these affordable housing programs support a wide range of housing and community development projects throughout the Bank s five-state district.

7 The FHLBank System s Affordable Housing Program (AHP) is one of the largest sources of private sector grants for housing and community development in the country. Member financial institutions partner with community development organizations to receive funding through this competitive grant program. AHP is designed to encourage the creation of innovative lending efforts by members to increase the availability of affordable housing. In addition to AHP, FHLB Des Moines supports affordable housing in its district through down payment and closing cost programs such as the Native American Homeownership Initiative, Rural Homeownership Fund and Urban First-time Homebuyer Fund. Members can use the Commercial Lending Advance or Residential Lending Advance to meet community development or affordable housing needs in both rural and urban communities. These advances provide members a lower-cost, long-term source of funding to support economic development projects including small business, small farm and other targeted activities, or the purchase, construction or rehabilitation of owner-occupied and rental housing. Visit for more information on FHLB Des Moines and its products and services.

8 Federal Home Loan Bank of Des Moines Skywalk Level, 801 Walnut Street, Suite 200, Des Moines, IA fhlbdm.com