Aquired Member Assets

The Acquired Member Assets (AMA) programs provide an additional way for FHLBanks to supply liquidity to their members. FHLBanks operate four AMA programs: the Mortgage Partnership Finance (MPF) program currently operates across six FHLBanks and is administered by the FHLBank Chicago; the Mortgage Purchase Programs (MPP) programs are operated by FHLBanks Cincinnati and FHLBank Indianapolis; and the Mortgage Asset Program (MAP) is operated by FHLBank New York.

Through the AMA programs, FHLBanks acquire and hold on their balance sheets conforming loans and loans guaranteed by a department or agency of the U.S. government (typically residential 1-4 single-family mortgages). Regulations governing the AMA programs establish eligible parameters for such purchase programs, which include various credit enhancement requirements that take the form of collateralization or premium hold-backs that serve to align the interests of members and their FHLBank operating the AMA program.

The principal benefits to members of the AMA programs arise from allowing members to:
 

  • Sell loans to their FHLBank thereby receiving funding;
  • Avoid interest rate risk to their balance sheet;
  • Remove prepayment risk;
  • Reduce credit risk;
  • Retain servicing income and connection to the borrower;
  • Get compensated for credit quality; and
  • Increase returns to members.

The AMA programs are structured such that the FHLBank manages a loan’s interest rate risk, while the participating member manages a substantial portion of the risks associated with originating the mortgage loan, including a significant portion of the credit risk. AMA programs also provide a substantial benefit to mid-size and smaller mortgage originators by reducing complexity, minimizing hedging risk, and providing a competitive capital markets execution, which allows them to be competitive with larger market participants.

The FHLBanks held $61.4 billion of mortgage loans on their balance sheets as of December 31, 2023, up from $56.1 billion at year-end 2022.

AMA programs are part of the FHLBanks’ core mission activities.