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Company Info: Frequently Asked Questions
What is the Federal Home Loan Bank of San Francisco? The Bank is not a retail bank with branches and tellers. We are a wholesale bank, which means we make loans (we call them "advances") to financial institutions that are our members and customers. Our ability to borrow at very favorable rates and terms allows us to engage in our core business – providing low-cost loans to our members to help them meet the housing finance and community development needs of their communities. The Federal Home Loan Bank of San Francisco is part of a network of 12 regional wholesale banks, which is called the Federal Home Loan Bank System. Top
What is the Federal Home Loan Bank System? The Federal Home Loan Bank System was established by Congress in 1932 to support residential mortgage lending. The FHLBank System provides a stable source of readily available, low-cost funds to federally insured depository institutions. Each FHLBank is governed by a Board of Directors comprised of elected directors voted in by member institutions and public interest directors appointed by the Federal Housing Finance Board. Top
What is the Federal Housing Finance Board? The Federal Housing Finance Board, an independent agency in Washington, D.C., is the regulator and supervisor of the Federal Home Loan Bank System. The Finance Board consists of a five-director board – one director is the Secretary of Housing and Urban Development. The other four directors are appointed by the President and are subject to Senate confirmation. Top
Why do we need the Federal Home Loan Banks? Direct borrowing from the capital markets is not a viable option for many institutions, especially small community financial institutions. Likewise, raising rates to attract deposits is often too costly. By providing short and long-term funding, tools essential for managing liquidity and interest rate risk, the FHLBanks enable their members to have a greater portion of their assets in loans to their communities. The FHLBanks also make it possible for members to provide financing for home mortgage loans that do not conform to secondary market guidelines, such as those to low-income families in rural areas. Top
How do the Federal Home Loan Banks raise money to lend to members? The Banks raise funds by issuing debt instruments (bonds and notes) in the capital markets. Because these instruments have "AAA" credit ratings, the FHLBanks can borrow at very favorable rates and terms. FHLBanks are capitalized through stock purchased by member institutions and retained earnings and do not receive any taxpayer assistance to operate. FHLBank debt is not guaranteed by, nor is it the obligation of, the U.S. government. Top
Who are the San Francisco Bank's members? Our members include savings institutions, commercial banks, credit unions, and thrift and loan associations headquartered in Arizona, California, and Nevada – the three states that make up the 11th District of the FHLBank System. Top
What financial products does the Bank offer? We offer a variety of products, including fixed- and adjustable-rate loans, securities-backed credit, interest rate swaps, standby letters of credit, and deposits. These products are customized to help our members lower their funding costs, manage liquidity, control risk, and offer a wide range of mortgage products to their customers. Top
What are some of the programs the Bank offers to support affordable housing and economic development? Programs include the Affordable Housing Program (AHP), which awards grants to innovative and effective affordable housing projects on a competitive basis twice a year; Advances for Community Enterprise (ACE), which offers low-interest loans for economic development projects that result in the creation or retention of jobs or provide services or other benefits for low- and moderate-income people and communities; Community Investment Program (CIP) credit that can be used to fund affordable housing development for low- and moderate-income households and help revitalize their communities; Homeownership Preservation Advance (HPA) credit that may be used to fund the refinancing or modification of mortgage loans for low- and moderate-income homeowners who may be at risk of losing their primary residence; the Access to Housing and Economic Assistance for Development (AHEAD) Program, which provides conception- and early-stage grants to support economic development and housing projects; the Individual Development and Empowerment Account (IDEA) Program and Workforce Initiative Subsidy for Homeownership (WISH) Program, homeownership set-aside programs that provide match funding for downpayment and closing cost assistance for qualified households; and the pilot Homeownership Preservation Subsidy (HPS) Program, which provides matching grants that Bank members can use to restructure or refinance mortgage loans for qualifying homeowners who may be at risk of foreclosure due to unaffordable increases in their monthly mortgage payments. Top
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