FHLB Des Moines members often have customers who want to lock in loan rates for long terms. Members are reluctant to lend long term and accept excessive interest rate or prepayment risk.
How can members retain their customers and mitigate the risks associated with holding the long term loans? The FHLB Des Moines Blended Funding Model allows members to explore the possibility of matching the cash flows of the long term loan to 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 (PDF) 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.
Contact your Vice President/Member Solutions (Opens in New Window) for blended funding scenarios. Please provide the terms of the loan to be funded and the results can be emailed to determine the best solution.