The Mortgage Partnership Finance Direct program will now accept larger jumbo mortgages and a wider variety of products including hybrid adjustable-rate mortgages, the Federal Home Loan Bank of Chicago and Redwood Trust said Monday.
The partners said that the program would accept jumbos of up to $2.5 million, a boost from the previous $1.5 million limit.
"By raising the loan limit and amending eligibility to include hybrid ARMs, the MPF Direct product will provide additional flexibility to members of the Federal Home Loan Bank System who wish to sell loans into the secondary market," said Redwood Trust President Christopher Abate in a press release.
The MPF Direct program allows members of six participating Home Loan Banks to deliver jumbo mortgages through the MPF platform to a subsidiary of Redwood Trust.
"We continue to broaden opportunities for FHLBank members to realize benefits from the MPF Direct product with the intention to help them — community lenders — remain competitive," said John Stocchetti, executive vice president and group head of the MPF program.
Currently, 177 financial institutions have signed up to participate in the program, including 37 in the first quarter of this year. So far only 42 members have actually sold jumbos to Redwood through MPF Direct.
Six FHLBs have been approved by their regulator to offer the MPF Direct product: Atlanta, Boston, Chicago, Des Moines, Pittsburgh and San Francisco.
