Federal Home Loan Banks (FHLBanks)
The Federal Home Loan Banks (FHLBanks) are a system of 11 government-sponsored wholesale banks that provide liquidity to their member financial institutions (which include commercial banks, credit unions, insurance companies, and community development financial institutions).
Role in Mortgage Lending
FHLBanks play a significant role in the secondary mortgage market by purchasing loans from their members. Specifically, they are identified as eligible purchasers of loans originated under the Single Family Housing Guaranteed Loan Program (SFHGLP) (SFHGLP), which is part of the broader Federal Housing Administration (FHA). This allows lenders to sell SFHGLP loans to FHLBanks, along with other approved entities like Government Sponsored Enterprise (GSE) and Government Sponsored Enterprise (GSE), thereby providing liquidity and supporting the availability of mortgage credit in rural areas.
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