Counting Collaterals

The total value of collateral held by the Federal Home Loan Banks (FHLBanks) rose 7.6 percent from $2.8 trillion at the end of 2016 to $3 trillion by the end of 2017 according to the latest report on collateral pledged to FHLBanks released by the Federal Housing Finance Agency (FHFA).

The report provides and overview and analysis of FHLBanks' collateral by composition, collateral type, and other relevant categories and reports collateral data for both the entire FHLBank System as well as the individual banks.

According to the FHFA, FHLBank members are allowed to pledge various types of collateral to secure advances and other bank products. Overall, FHFA found that collateral with the FHLBanks in 2017 consisted of nine types of collateral. They included:

• Single-Family 1-4 Unit Residential First Liens
• Agency MBS/CMOs
• All Other Authorized Securities
• Multifamily First and Second Liens
• Other Real Estate Related Collateral (ORERC) such as Commercial Real Estate First and Second Liens
• ORERC: Home Equity Loans and Lines of Credit, First and Second Liens
• ORERC: Other Loans
• Community Financial Institution (CFI) Collateral

The report indicated that single-family collateral remained the largest single collateral category at the end of 2017 and accounted for an estimated 53 percent of all eligible collateral that was pledged to FHLBanks during the year. Single-family collaterals increased by $134 billion or 9 percent between the end of 2016 and the end of 2017.

Looking at the distribution of collateral by type and bank, the report said that single-family collateral was the largest category across all banks. Dallas was the only FHLBank that reported having more eligible commercial real estate collateral pledged ($98 billion) than single-family collateral ($88 billion). "Commercial real estate was the second-largest collateral category at seven FHLBanks, multifamily was the second-largest category at two FHLBanks, and CFI collateral was the second-largest category at the Topeka Bank," the report said. Four FHLBanks–Atlanta, Boston, Cincinnati, and New York–reported having no eligible CFI collateral pledged by their members.

Under the member lien and pledge status, the FHFA report indicated that members pledging collateral under blanket lien arrangements continued to account for the largest dollar amount of eligible collateral at $1.6 trillion or 53 percent of eligible collateral.

Click here to read the detailed FHFA report.