Advance Programs

Common Uses

·	Allows the borrower to originate and hold fixed-rate mortgages without undertaking significant interest rate and prepayment risk

·	Useful in lengthening liabilities to facilitate risk management

·	Effective financing tool for both mortgage pass-throughs and collateralized mortgage obligations (CMOs)

Rate

Fixed for entire term to maturity

Accrual Basis

Actual / Actual day basis

Interest is Paid

Monthly (or call date if call option is exercised)

Principal is Paid

At maturity or call date (if call option is exercised)

Principal Prepayment Policy

With 20 business days' notice, prepayable with no prepayment fee; prepayable on other dates, subject to prepayment fee

Submission of Application

A Callable Advance application is required for each borrowing