A Message From the President
May 15, 2020
Throughout the past few months, I have gained an even greater appreciation for what you, our members, do to support your communities and keep our nation moving forward. I have heard numerous stories of how community banks and credit unions are going above and beyond to meet their customers’ and members’ needs during this pandemic. On behalf of FHLBank Topeka, I can say we are proud to be a part of your outreach efforts through our mission of providing liquidity for your financial institutions.
On April 29, FHLBank Topeka announced its first quarter operating results and on May 12, we filed our Form 10-Q for the quarter. Those two documents detail the financial performance of the FHLBank, while this message focuses on some of the “other” aspects of our business.
I would be remiss if I started the message without mentioning the most significant event of the quarter, or maybe even the century, which is of course COVID-19. Like many of your organizations, FHLBank reacted to the pandemic in a very strategic and conservative manner. Even though we didn’t know exactly what was in the offing, we were confident FHLBank would continue to be a reliable source of funding for its members. That is what we are designed to do - provide liquidity to you in all operating environments.
On April 22, 2020, one of our Nebraska members, Union Bank and Trust of Lincoln, was featured in the Washington Post. The article tells the amazing story of community financial institutions and their employees responding quickly to support their customers and communities. It explains how local lenders were much nimbler compared to larger financial institutions when accessing the Paycheck Protection Program (PPP) loans. This meant they helped their customers in a more timely and effective manner. The story states, “… Keeping local businesses healthy also ensures bank customers remain strong in the future.” After reading this article, I was even more proud to be associated with our community financial institution members that were making such differences in their communities.
In order to help our members serve their customers during this stressful time, FHLBank made temporary changes including increased flexibility for collateral through acceptance of various types of forbearance plans and loan modification agreements. For MPF® customers, we waived delivery commitment extension fees and eased certain underwriting, documentation and payment requirements. Additional measures were also undertaken to allow PPP loans to be pledged as collateral for FHLBank credit obligations. It is our hope that by accepting this collateral, we remove some of the challenges you may face in this area and make it easier to keep funding flowing into the communities you serve.
We are also offering a COVID-19 relief advance special - $1.5 billion in zero-cost and $1.5 billion in at-cost, low-rate funding to help you serve your customers affected by the pandemic. We have had 201 members take advantage of this offering, and we have heard several positive comments from members regarding the assistance and how the funds are being used to support their communities. Funds will be available until June 30 on a first-come, first-served basis. Please visit our website or contact the Lending Desk at 800.809.2733 for more details.
FHLBank has continually operated without significant difficulties or disruptions, with the majority of our employees working remotely since mid-March. The health and safety of our employees is our top concern, so at this time we cannot predict when our full employee base will return to work in our main office. We will comply with state and local guidelines as we plan our phased transition back to the main office.
One of the incredible outcomes of the pandemic is how FHLBank employees have pulled together as a team. A team who genuinely cares about each other and our members demonstrated by working tirelessly to assure your needs were met. It takes all of us working together to keep our communities economically strong. Hard times really do bring people together. In fact, that is our internal mantra – “Together we will."
We continue to monitor the progress of the pandemic and are committed to assisting our members and their communities as impacts related to the pandemic continue to unfold. To keep up to date on what FHLBank is doing in relation to the pandemic, please see the COVID page.
Housing and Community Development
Our Homeownership Set-aside Program (HSP) is going strong with $3.5 million reserved so far in 2020. HSP provides $5,000 grants to assist very low, low-, and moderate-income first-time homebuyers. The money is available first come, first served, with a $25,000 per member per month limit. As of May 13, 2020, we have over $3.7 million still available. If we continue to keep pace as we are, we most likely will be out of HSP funds by late July. Find out more about how you can participate on our website.
Our Affordable Housing Program (AHP) application period is from July 6 to August 21. This year, we have more than $13 million available for financing owner-occupied and rental housing that address the needs of very low-, low-, and moderate-income households. The maximum subsidy per project is $750,000. The online application, which is convenient and easy to use, will be available when the round opens on July 6.
For questions about HSP or AHP, contact our Housing and Community Development department at 866.571.8155.
20th Anniversary of MPF Program
Twenty years ago this month, FHLBank Topeka began offering the Mortgage Partnership Finance® Program, one of its most successful products, to our members. Over the years, about 300 members have used the product to help their customers achieve the American dream of homeownership. Many members have noted that their institution would not be able to be in the mortgage business if it were not for MPF.
FHLBank Membership Rule
On April 22, the 11 FHLBanks filed a comment letter with the Federal Housing Finance Agency (FHFA) regarding FHLBank membership. Basically, the letter states that membership is guided by two objectives.
- Ensuring the FHLBank System remains safe and sound and able to provide liquidity for housing finance through the housing and business cycle.
- Ensuring all members have an appropriate nexus to the housing finance and community development mission of the FHLBanks.
The FHFA is accepting comment letters until June 23, 2020. If you wish to comment, visit the FHFA site for more information.
Member Experience Research
Finally, I want to thank those who completed our member experience survey at the end of 2019. We had a high response rate, which gives us excellent data from which to make important decisions. We have received the results from our third-party consultant and are currently evaluating the interviews, workshops and survey data for possible improvements to our processes and products. I will keep you informed regarding the results of the research and actions we plan to take based on your input.
For those of you who were not able to complete the survey, please know your input is valued. Please reach out to your regional account manager or Dan Hess, Chief Business Officer, with ideas regarding how we can improve your experience in working with us.
I know how unsettling and challenging this time can be. And yet, our members rise to meet these challenges, doing all that they can to support their customers, neighbors and communities. FHLBank Topeka is honored to be your funding partner in these efforts. Please reach out to any of us at FHLBank Topeka if we can help you continue the important work you’re doing to support communities across the Tenth District.