The Federal Home Loan Bank of San Francisco announced its new Homeownership Preservation Advance (HPA) program which offers member financial institutions discounted credit to restructure loans for eligible low- and moderate-income homeowners. The HPA program can also be used to enable elderly residents to preserve homeownership by obtaining a reverse mortgage.
“The foreclosure crisis has hit California, Arizona, and Nevada especially hard. Our homeownership preservation grant program and credit product enable our members to offer relief to struggling homeowners in their communities,” said Dean Schultz, President and Chief Executive Officer. “These efforts are very much in keeping with the Bank’s mission to expand, through our members, the availability of mortgage credit in our district,” he added.
The FHLB was designed to help meet the borrowing needs of communities by providing wholesale credit products and services to member financial institutions. The Bank is privately owned by its members, which can be commercial banks, savings institutions, credit unions, thrifts, and insurance companies. Members can use the FHLB as a source of funding by submitting loans as collateral and in return members receive funding at a competitive rate.
The HPA program works the same but provides a cheaper source of funding as long as the loans meet the programs eligibility requirements. Below is a list of advantages the HPA program offers to its member banks:
Interest rates are generally lower than rates on regular Bank advances
Available in a variety of maturities for an array of credit products
HPA applications may be made at any time
Using HPA credit may help you meet your community investment goals
HPA credit may be used in tandem with the Homeownership Preservation Subsidy program
For banks looking for a source of funding, the FHLB could be a great option.