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FHL Bank Terms

The Federal Home Loan Banks (FHLBanks) are government-sponsored enterprises (GSEs), federally-chartered but privately

capitalized and independently managed. The FHLBanks together with the Federal Home Loan Banks Office of Finance (Office

of Finance), the fiscal agent of the FHLBanks, comprise the FHLBank System. apply for a home loan

pre qualify home loan

pre qualify home loan

The Office of Finance is responsible for preparing the Combined Financial Report of the FHLBanks. Each FHLBank is

responsible for the financial information and underlying data it provides to the Office of Finance for inclusion in the Combined

Financial Report. The Office of Finance is responsible for combining the financial information it receives from each of the


The FHLBanks Combined Financial Report is intended to be used by investors refinancing a home loan in consolidated obligations (consolidated

bonds and consolidated discount notes) of the FHLBanks as these are the joint and several obligations of all FHLBanks. This

Combined Financial Report is provided using combination accounting principles generally accepted in the United States of

America. This combined presentation in no way indicates that these assets and  home mortgage loans liabilities are under joint management and

control as each individual FHLBank manages its operations independently.

Because of the FHLBank System’s structure, the Office of Finance does not prepare consolidated financial statements.

Consolidated financial statements are generally considered to be appropriate when a controlling financial interest rests

directly or home loans refinance indirectly in one of the enterprises included in the consolidation. This is the case in the typical holding company

structure, where there is a parent corporation that owns, pre qualify home loan directly or indirectly, one or more subsidiaries. However, the

FHLBanks do not have a parent company that controls each of the FHLBanks. Instead, each of the FHLBanks is owned by its

respective members and former members.

Each FHLBank is a separately chartered cooperative with its own board of directors and management and is responsible for

establishing its own accounting and financial reporting policies in accordance with accounting principles generally accepted in

the United States of America (GAAP). Although the FHLBanks work together in an effort to achieve consistency on significant

accounting policies, the FHLBanks’ accounting and financial reporting policies and practices are not necessarily identical

because alternative policies and presentations are permitted under GAAP in certain circumstances. Statements in this report

may be qualified by a term such as “generally,” “primarily,” “typically,” or words of similar meaning to indicate that the

statement is generally applicable, but may not be applicable to all FHLBanks or transactions as a result of their different

business practices and accounting and financial reporting policies under GAAP.

An investor may not be able to obtain easily a system-wide view of the FHLBanks’ business, risk profile, and financial

information because there is no centralized, system-wide management or centralized board of director oversight of the

individual FHLBanks. This decentralized structure is not conducive to preparing disclosures from a system-wide view in the

same manner that is generally expected of U.S. Securities and Exchange Commission (SEC) registrants. For example, a

conventional Management’s Discussion and Analysis is not provided in this Combined Financial Report; instead, this report

includes a “Financial Discussion and Analysis” prepared by the Office of Finance using information provided by each FHLBank.

Each FHLBank is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and must file

periodic reports and other information with the SEC. Each FHLBank prepares an annual financial report, filed on SEC Form

10-K, and quarterly financial reports, filed on SEC Form 10-Q. Those reports contain additional information that is not

contained in this Combined Financial Report.get prequalified for a home loan  An investor should review available information on individual FHLBanks to obtain

additional detail on each FHLBank’s business, risk profile, and accounting and financial reporting policies. FHLBank financial

reports are made available on the web site of each FHLBank and on the SEC’s web site at This web site address is

provided as a matter of convenience only, and its contents are not made part of this report and are not intended to be

incorporated by reference into this report.2


General Information

The 12 FHLBanks are GSEs, organized under the authority of the Federal Home Loan Bank Act of 1932, as amended

(FHLBank Act). The Office of Finance is a joint office of the FHLBanks established to facilitate the issuance and servicing of debt

for the FHLBanks, known as consolidated obligations, and to prepare the quarterly and annual combined financial reports of

the FHLBanks. The FHLBanks and the Office of Finance are regulated by the Federal Housing Finance Agency (FHFA). (See

Audits and Examinations – FHLBanks’ Regulator for more information regarding the FHFA.)

The mission of the FHLBanks is to provide financial products and services to their members and eligible non-members,

including, but not limited to, secured loans known as advances, that assist and enhance their financing of: (1) housing,

including single-family and multi-family housing serving consumers at all income levels; and (2) community lending. FHFA

regulations require each FHLBank’s board of directors to have in effect, at all times, a strategic business plan that describes

how the business activities of that FHLBank will achieve the mission of FHLBanks.

The FHLBanks serve the public by providing a readily available, low-cost source of funds to FHLBank members through

advances. These funds may be used for residential mortgages, community investments, and other services for housing and

community development. In addition, some of the FHLBanks provide members with a means of enhancing liquidity by

purchasing home mortgages through mortgage programs developed for their members. Under these programs, the FHLBanks

purchase mortgage loans from members and eligible housing associates. Members can also borrow from an FHLBank to fund

low-income housing, helping the members satisfy their regulatory requirements under the Community Reinvestment Act.

Finally, some of the FHLBanks offer their members a variety of services, including:

  • correspondent banking, which includes security safekeeping, wire transfers, and settlements;
  • cash management;
  • letters of credit; and
  • derivative intermediation
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