New Community Lending Program Enhancement:
Program-Specific Commitments
April 2006 |
The Home Loan Bank of New York (”HLB”) offers Community Lending Program (”CLP”) funds at below-market advance rates. CLP is an additional tool for originating housing and community development financing for eligible activities in your communities. We’ve recently enhanced our CLP program to offer Program-Specific commitments.
In addition to submitting Community Investment Program (”CIP”), Rural Development Advance (”RDA”), and Urban Development Advance (”UDA”) applications on a project-specific basis, you may now apply for a Program-Specific commitment that will operate like a pre-approved line of credit, at no cost.
Program-Specific commitments allow you to submit one application to fund multiple projects. Instead of describing one specific project in the application, you would describe the underwriting criteria of CIP-, RDA-, or UDA-eligible loans to be originated under a targeted lending program.
Once approved for a Program-Specific commitment, all loans originated within the parameters of the approved lending program may be submitted for funding. Loans that have already been originated prior to the submission of the Program-Specific application are eligible for funding as long as the loans were originated within 3 months prior to the funding of the advance. A $10 million commitment limit will be in effect for 2006 for both Program-Specific housing programs and community development programs, allowing for a total combined commitment limit of $20 million per member institution. There continues to be no limits on CIP, RDA, and UDA commitments issued on a project-specific basis.
Many of our community-based member lenders use regular advances to fund loans that are within the parameters of our CLP programs to help with their asset/liability management objectives. To do this, members commonly use longer-term advances to fund longer-term assets. Any of our advance structures can be used with CLP to help you achieve your goals. Fixed-Rate and Amortizing Advances are the most popular CLP advance structures. The Fixed-Rate Advance allows you to pay interest monthly and principal at maturity in the range of 2 days to 30 years. The Amortizing Advance gives you the ability to match the amortization characteristics of your fixed-rate mortgage portfolio and customize the amortization schedule to match a selected prepayment profile. You may also use the Strip Advance to customize your payment schedule on a quarterly basis, where interest is paid monthly.
Since CLP advances are priced at below regular market rates, the added cost savings could help improve your margins. Click here for a rate comparison. The CLP program provides a continuous source of low-priced funds to help you enhance profitability, improve community public relations, and enhance CRA performance. For assistance with choosing the right advance structure for your housing or economic development endeavor, contact a Calling Officer at 212-441-6700. If you have any questions about our CLP programs or Program-Specific commitments and how they can benefit you, contact the Community Investment department at 212-441-6851.
Do You Pledge CRE Loans to Meet CML Requirements?
We have good news for you! Effective immediately for existing Commercial Real Estate (”CRE”) stateside properties, the Collateral Maintenance Level (”CML”) requirement for stateside commercial and commercial mixed-use mortgage portfolios has been reduced from 125% to 120%.
This reduction should provide increased liquidity against these CRE collateral types and may increase your collateral borrowing potential. By April-end 2006, the Collateral Services Group will send a confirmation of any change to your institution's assigned CML for stateside CRE-related collateral portfolios.
If you have any questions regarding this change, please contact a Calling Officer at 212-441-6700 or Collateral Services at 201-356-1065.
Please note: The CML reduction does not result in any changes to the standard CMLs and Market Value Adjustments for similar CRE assets located in Puerto Rico or the U.S. Virgin Islands.
Prior Issues 