FHLB Des Moines members often times have borrowers who want to lock in loan rates for long terms. Members are reluctant to lend long term and accept unwanted interest rate or prepayment risk.
How can members retain their customers and mitigate the risks associated with holding long term loans? The FHLB Des Moines Blended Funding Model allows members to explore the possibility of matching the cash flows of long term loans for their customer with a blend of funds from the member’s deposit base and advances from FHLB Des Moines. Using the model, members can view multiple funding scenarios to arrive at the best solution to finance the loans that their customers want.
The Blended Funding Model also works well to explore the possibility of funding pools of longer term, residential loans. Prepayment speeds can be included in both the loans being funded and advances funding the loans. Click here to see an example of what the Model looks like.
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Contact your Relationship Manager or the Strategies Team for more information about our Blended Funds Model and how it can positively impact your business.