About Us


About Us: Frequently Asked Questions


Frequently Asked Questions
 
 

Questions Answers
What do the FHLBanks do? Simply, the Federal Home Loan Banks provide credit to nearly 8,000 member financial institutions. As a safe, reliable source of low-cost funds, the FHLBanks strengthen community financial institutions, which in turn strengthen their communities.

The FHLBanks also fund programs to promote affordable housing and economic development for low- and moderate-income families and communities. Since 1990, the FHLBanks have awarded approximately $4.3 billion in AHP subsidies to help construct or rehabilitate 742,000 housing units for low to moderate income families and individuals.
How do the FHLBanks do it? The Federal Home Loan Banks raise funds by issuing debt instruments (bonds and notes) in the capital markets. Because these instruments have "AA+" credit ratings, the Home Loan Banks can borrow at favorable rates and terms. The Home Loan Banks are privately-capitalized and do not receive any taxpayer assistance to operate. FHLBanks debt is not guaranteed, nor is it the obligation of the U.S. Government.
Why do we need the FHLBanks? Direct borrowing from the capital markets is not a viable option for many institutions, especially small community banks. Likewise, raising rates to attract deposits often is too costly. By providing short and long-term funding, tools essential for managing liquidity and interest rate risk, the FHLBanks enable their members to have a greater portion of their assets in loans to their communities. The Home Loan Banks also make it possible for members to provide financing for home mortgage loans that do not conform to secondary market guidelines such as those to low-income families in rural areas.
Do the FHLBanks pay taxes? The Home Loan Banks are not subject to federal income tax; however, the Home Loan Banks provide an annual contribution to affordable housing of 10 percent of net income or $100 million, whichever is greater.
What is the Federal Housing Finance Agency? The Federal Housing Finance Agency (FHFA) was created on July 30, 2008, when the President signed into law the Housing and Economic Recovery Act of 2008. The Act created a world-class, empowered regulator with all of the authorities necessary to oversee vital components of our country’s secondary mortgage markets – Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

Edward DeMarco is the Acting Director of the Federal Housing Finance Agency.

For more information, please visit the FHFA website.

What is the Council of Federal Home Loan Banks? The Council of Federal Home Loan Banks is a trade association comprised of director and officer representatives from each of the 12 Home Loan Banks and is dedicated to enhancing public awareness and understanding of the Home Loan Bank System.
What is the Federal Home Loan Bank System? The System consists of 12 regional Federal Home Loan Banks with nearly 8,000 member commercial banks, thrifts, insurance companies and credit unions.
How does the FHLB Des Moines  accomplish its mission? FHLB Des Moines:

  • Supports member needs by providing credit at attractive rates and by paying a market rate of return on their investment in the Home Loan Bank.

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  • Plays a leadership role in meeting the housing needs of the public through community investment and affordable housing programs and services.
     
  • Fosters member profitability through the provision of a variety of quality products.
     
  • Purchases member housing mortgages through a shared risk program.

 



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