A long-term fixed rate advance that amortizes like a mortgage (level monthly payments):
- 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 12 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.
10, 15, 20 or 30 years
Fixed for entire term to maturity
30 / 360 day basis
Principal and Interest 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 without fee; any additional prepayment may be subject to prepayment fee; monthly payment is reset after any prepayment of principal.
Submission of Application
A Mortgage Matched Advance application is required for each borrowing.
To learn more about our Advance products, contact Jeff Berryman or Lisa Wishart at 800-828-4191.
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