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March 25, 2022 Changes to our Member Products Policy

At its meeting this week, FHLBank Topeka’s board of directors approved changes to its Member Products Policy. Details are available in the online  Member Products and Services Guide (MPSG) and are effective March 31, 2022.

We are offering repeating sessions of our annual collateral webinar series to help you stay up to date on collateral matters. The series runs March 29 through April 8. Select the sessions that work for you to learn more about the changes outlined below. 

E-SIGNATURES ALLOWED FOR LOAN MODIFICATIONS:Our members have asked for increased flexibility with e-signatures. We are pleased to announce the acceptance of pledged  loans with electronically signed loan modifications of wet-ink promissory notes and copies of loan modifications of wet-ink original promissory notes. You will notice this change throughout our Underwriting Guidelines. For a full explanation of the requirements, please see page 69 and 70 of the MPSG. Please note that loan modifications executed before March 31, 2022, that meet these requirements will also be eligible.

INCREASE IN INDIVIDUAL LOAN LIMITS: We have expanded the maximum lending value on individual loans for mortgages on multifamily residential real property and commercial real estate from $75 million to $200 million.

LENDING VALUE CHANGES: After some additional refinement to our Lending Value Methodology and observing generally stable to slightly improved credit conditions for many collateral categories across our district, you will see increases in lending values for many categories of our Schedule of Eligible Collateral.

The most commonly pledged loan category, conventional mortgages on one-to-four family residential real property, saw improvements from 78% to 81% for blanket and Class A delivered lending values. You will also see a slight increase on lending values for FHA-insured mortgages.

In the Other Real Estate Related Collateral category, you’ll see an increase for agriculture real estate from 61% to 66% for blanket pledge members. Commercial real estate remains unchanged for most members but will increase slightly from 65% to 68% for Class A insurance company members.

In the Other Collateral category, which is eligible for our members classified as Community Financial Institutions, you will notice an increase for operating loans from 53% to 57% and an increase for equipment loans from 48% to 54%.

As we have announced previously, our normal cadence on lending value changes is typically during the fall. At this time, we are still evaluating the annual lending review cadence to determine if we shift back to the typical cadence or if we continue to make adjustments in the spring. We will keep you informed as we determine the appropriate timing of future changes to lending values.

If you have any questions about any of these changes, please contact Lance Liby, chief credit officer, Tom Bliss, director of credit administration, Kylie Mergen, director of financial services, at 785.233.0507.

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