FHLBI members gain safe, consistent and reliable access to the capital markets at a competitive price because our borrowing power is backed by the collective strength the FHLB System. The FHLBanks raise money to fund member lending through the daily sale of debt securities in the global capital markets. Just as the FHLBanks are flexible lenders, they are also known for their ingenuity in debt issuance, which is reassuring to both members and underwriters. The FHLBanks' Office of Finance
acts as the central debt issuance facility for the FHLBanks. FHLBanks are jointly and severally liable for their combined obligations, providing another level of safety and leading to prudent borrowing throughout the FHLBanks. Proceeds enable member financial institutions to extend mortgage credit to U.S. homebuyers and fund economic development projects at the local level.
Financial institutions have limited means to obtain liquidity: they do it primarily by attracting deposits or accessing capital markets. But it takes time to attract deposits and traditional access to capital can be costly, not to mention terms and optionality are many times out of their control.
FHLBI advances - or secured loans to our members - are an almost instantaneous way for members to get the liquidity they need, on their terms. The FHLBanks go to the financial markets several times a day to provide their members with funding. Advances can be structured in any number of ways, allowing each member to find a funding strategy tailored to their specific needs with the terms, structure, and optionality needed. This allows our members to match funding with asset growth while managing interest rate risk. Learn more about FHLBI Credit Services.
Remain Fully Invested
FHLBI accepts a wide variety of collateral, including assets that are not easily liquidated, allowing members to post collateral and access funds as needed instead of selling investments at inopportune times. This ability to manage liquidity gives our members a powerful earnings and risk management tool. Contact an FHLBI Account Manager to learn about collateral options and requirements.
Access to Mortgage Purchase Program (MPP)
With MPP, members have a source to sell fixed-term conventional mortgages and receive:
- Simple pricing structure – only one loan level price adjustment for cash-out refis.
- Competitive pricing, selling and delivery through a secure online connection.
- Both servicing retained and released options.
- Potential cash flow beyond the sale. With MPP's Lender Risk Account, sellers receive additional cash during the life of the loan if it performs. No other secondary market program rewards a seller for making good quality loans.
- Excellent customer service – local decision making and problem resolution means questions are answered and issues resolved quickly.
One of the most important reasons to sell through the MPP is that the loans FHLBI purchases become earning assets to the FHLBI and are not securitized and sold in the secondary market. These earning assets produce income for FHLBI and are returned to our member shareholders in the form of dividends on their FHLBI stock. To learn more about MPP, visit the Mortgage Purchase Program
Access to Funding for Community Housing and Economic Development
The FHLBanks' Affordable Housing Program (AHP) is the largest private source of grant funds for affordable housing in the United States. Funded with 10% of the FHLBanks' net income each year, the AHP is comprised of a competitive grant program with maximum awards of $500,000 and three homeownership initiatives that provide grants for home purchases and renovations. Members partner with local developers and community organizations seeking to build and renovate housing for low- to moderate-income households. Grant money can be combined with other programs to support projects benefiting seniors, the disabled, homeless families, first-time homeowners and others with limited resources or special needs.
FHLBI's Community Investment Program (CIP) offers below-market-rate loans and letters of credit for financing housing and economic development projects. The program is designed to be a catalyst for economic development because it supports projects that create and preserve jobs and helps build infrastructure to support communities.
To learn more about the Affordable Housing Programs or Community Investment Program Advances, visit the Communities & Housing page.