Adjusted Eligibility Guidelines for Pledged Collateral

posted on Monday, May 18, 2020 in General

As a part of our overall response to COVID-19, we've temporarily adjusted our eligibility guidelines on pledged collateral to align with our member financial institutions who are implementing loan forbearance or loan modification agreements for their borrowers. 

January 2021 update:
Given the significant impact of other natural disasters in 2020, the Bank will now extend these accommodations to any loan adversely affected by a major disaster occurring in 2020. Refer to the Frequently Asked Question link below for additional details and clarifications.

Loan forbearance or loan modification

  • Forbearance Agreement

    A Forbearance Agreement is a suspension or reduction in principal and/or interest payments for a period of time, which result in no changes to the original wet-inked promissory note. If no changes to the original wet-inked promissory note take place, no signature is required to witness acknowledgment and consent to the forbearance. 

    Open in new page
  • Modification Agreement

    A Modification Agreement is a suspension or reduction in principal and/or interest payments for which repayment changes the original terms and conditions of the original wet-inked promissory note. If changes to the original wet-inked promissory note take place, signatures from all borrowers are required; please see FHLB Des Moines Covid-19 modification.   

    Open in new page

Loan forbearance or loan modification agreements executed with electronic signatures (see below for requirements) will be accepted as long as an original wet ink signed promissory note from origination is still in full force, in effect, and in possession of the member.

Most importantly, loan forbearance or loan modification agreements must be evidenced by a written agreement (Agreement) with the borrower with evidence of the borrower’s acceptance and reference to the related note. These Agreements should be available if/when the loan is selected for FHLB Des Moines regular Member Collateral Verification (MCV) process. Members need to include the UPB for pledged loans in forbearance in their pledging and reporting.

Necessity of Electronic Signatures

Additionally, we understand some members are using electronic signatures to safely process loan forbearance and loan modification agreements. Assuming loans meet all other eligibility guidelines we will temporarily allow electronic signatures in order to:

  • maintain the eligibility of the existing pledged loan 
  • allow the eligibility of new loan originations until a wet-inked signed copy can be obtained

Additional requirements for loan modification agreements depend, in part, on how the member’s borrower provides its signature:

Collateral Guidelines

Frequently Asked Questions

Additional information regarding this guidance can be found on this resource:

Frequently Asked Questions

If your institution needs to utilize these available adjustments to your eligible loan collateral, please contact our Collateral team: or 800.544.3452, ext. 2500. We look forward to the day when business can resume as normal for our members. 

Update on Collateral Eligibility Regarding Paycheck Protection Program (PPP)



  1. Collateral
  2. COVID-19
  3. Credit and Collateral