FHLBank Indianapolis adds $3 million to popular new home loan program with below-market rates

last updated on Wednesday, October 9, 2024 in Federal Home Loan Bank Indianapolis

Buying a home remains out of reach for many low-income Americans, but an innovative FHLBank Indianapolis program seeks to change that for residents of Indiana and Michigan. 

The new MPP Rate Advantage Program incentivizes Bank members to fund mortgage loans to low-income borrowers by offering below-market note rates. Launched with $1 million on Aug. 15, 2024, the initial 100 loans were locked in under six weeks – a clear sign of need across the Bank’s district. As a result, the Bank’s Board of Directors approved an additional $3 million in September. 

As of Oct. 4, 2024, more than 170 loan applications totaling over $27 million have been locked or funded through the program. 

A total of 400 new homeowners could potentially benefit from the program. 

“FHLBank Indianapolis recognizes the financing challenges potential homeowners face in today’s market, so we developed a creative way to address that,” said Joe Biczak, Associate Director, MPP Products and Services. “The program is core to our mission of supporting affordable housing, as well as building and strengthening communities, something FHLBank Indianapolis has been doing for decades.”

Key points of the program: 

  • $10,000 incentive paid for each qualifying below-market conventional loan 
  • Funds provided on a first-come, first-served basis 
  • No limit to the number of loans PFIs (Participating Financial Institutions) can sell into the program.

Member reaction has been overwhelmingly positive. 

“(Rate Advantage) is such a straightforward and easy program to take advantage of and is making housing payments so much more affordable for our borrowers,” said Josh Summerfield, VP of Mortgage at Consumers Credit Union in Kalamazoo, Mich. “We always want to help with affordable lending and this program is a perfect fit, being simple to execute from lock through delivery!”

The program has been praised by the Bank’s national trade group, too. 

“We're thrilled to see how the Rate Advantage Program is directly benefiting low-income borrowers by reducing their housing costs through affordable and accessible means,” the Council of Federal Home Loan Banks recently wrote on social media. “Great work, FHLBank Indianapolis!” 

The program is only available through FHLBank Indianapolis members. More information is available on the Mortgage Purchase Program landing page of fhlbi.com.

Rate Advantage program user

Story by Scott Thien, Sr. Communications Lead. For more information, contact the Corporate Communications department at corpcomm@fhlbi.com.

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