Advance Programs

Summary

Anti-Predatory
Lending Policy

Subprime and Nontraditional Mortgage Lending

Mortgage Purchase Program

Analytical

Correspondent Services

Advance Programs >

Common Uses

·	Allows the borrower to match fund fixed-rate mortgages and reduce associated interest rate and prepayment risk

·	Borrower has the option to reduce outstanding principal once every twelve months through a prepayment (if percentage paid is less than or equal to established market speeds, without fee)

·	Enables the borrower to take advantage of arbitrage opportunities between the MMA and a pool of portfolio mortgage loans or mortgage-backed securities

Rate

Fixed for entire term to maturity

Accrual Basis

30 / 360 day basis

Interest and Principal are Paid

Monthly (payment is first credited to interest due, then to principal reduction)

Principal Prepayment Policy

At the time of the borrowing, a corresponding coupon rate for the MMA is established, based on the coupon rate of a FHLMC/FNMA MBS; the coupon rate is used to establish a constant prepayment rate (CPR) index; during each 12-month period, borrower is entitled to make a principal prepayment equal to the corresponding CPR percentage with no fee; any additional prepayment may be subject to prepayment fee; monthly payment is reset after any prepayment of principal

Submission of Application

A MMA application is required for each borrowing

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