“The ideology of capitalism makes us all into connoisseurs of... the indefinite expansion of possibility.”  Susan Sontag

If you would like to get the most borrowing capacity out of your collateral, you may wish to consider the Seattle Bank’s expanded collateral program. Depending upon your institution’s financial condition, capitalization, and regulatory status, you may be eligible for the program. 

With the expanded collateral program, the Seattle Bank may accept a wider variety of collateral, thereby providing our members with greater access to liquidity and balance sheet flexibility. 

In addition to marketable securities and first-lien single-family and multifamily mortgage loans, you may also be eligible to incorporate other real estate related (ORER) collateral, as well as certain community financial institution (CFI) collateral. 

ORER collateral consists of loans that are secured, documented, and wholly owned. Eligible assets could be derived from the following representative categories:

• First-lien commercial real estate loans with current loan-to-value ratios below 80%.

• Closed-end second mortgage loans and revolving open-ended loans secured by first or second liens on improved single-family residential loans.

• Certain privately issued mortgage-backed securities.

• The first-mortgage portions of SBA 504 loans that are secured by commercial mortgages.

Several limitations apply to eligible ORER collateral, including: concentration limits on property usage types, full disbursement, and minimum debt-coverage ratios. 

For those members that qualify as CFIs (FDIC-insured depository institutions whose average total assets over the preceding three-year period is less than $567 million), eligible collateral could also be expanded to incorporate eligible small business loans (subject to blanket liens and caps on equipment, inventory, and accounts receivable), along with small agri-business and farmland loans. 

The Seattle Bank’s expanded collateral program may be just the right solution for optimizing your institution’s borrowing capacity and managing liquidity. To learn more about effective ways to potentially expand your pool of available collateral, contact your Seattle Bank Relationship Manager: John Biestman, Debra Davis, Charlie Eiseman, or Jim Mochizuki.

IMPORTANT DISCLAIMER, PLEASE READ: The Federal Home Loan Bank of Seattle ("Seattle Bank") publishes What Counts for educational and promotional purposes only. The data and analysis presented are based upon information obtained from sources that we consider reliable. The opinions expressed represent the current opinions of our staff and are subject to change without notice. We make no warranties, express or implied, regarding the accuracy or completeness of any information, analysis, or opinions presented. No part of this newsletter may be reproduced in any manner without the written permission of the Seattle Bank. The Seattle Bank, its employees, agents, and contractors are not registered investment advisors, financial advisors, or broker dealers, and they are not acting in a fiduciary capacity. The information contained in this newsletter does not constitute a recommendation, offer to sell, or solicitation of an offer to purchase any particular investments or products, including without limitation securities of any companies discussed, and it should not be construed as such. It is the reader’s responsibility to evaluate the suitability, risks, and merits of any investment, funding strategy, or business proposal presented in this newsletter. Newsletter content is for our readers' informational purposes only. Please refer to our Terms of Use for details.