CHICAGO/MILL VALLEY, Calif.– The Mortgage Partnership Finance (MPF) Program and Redwood Trust, Inc. have announced increased loan limits on mortgage loans for the MPF Direct product, which will become effective during the third quarter of 2016.
The new single-family loan limit will be $2.5 million, up from $1.5 million previously. In addition, hybrid adjustable rate mortgages (ARMs) will become eligible for delivery.
“We continue to broaden opportunities for FHLBank members to realize benefits from the MPF Direct product with the intention to help them—community lenders—remain competitive,” said John Stocchetti, executive vice president and group head of the MPF Program at the FHLBank of Chicago, which operates the MPF Program for the FHLBank System.
The MPF Direct product allows members of a Federal Home Loan Bank that participate in the MPF Program to deliver eligible jumbo mortgage loans through the MPF Program’s operational platform to a subsidiary of Redwood Trust. This arrangement adds private capital to the secondary mortgage market, the two organizations said.
“By raising the loan limit and amending eligibility to include hybrid ARMs, the MPF Direct product will provide additional flexibility to members of the Federal Home Loan Bank System who wish to sell loans into the secondary market,” said Christopher Abate, president of Redwood Trust.
Six FHLBanks have been approved by their regulator to offer the MPF Direct product: Atlanta, Boston, Chicago, Des Moines, Pittsburgh, and San Francisco.