- April 06, 2023
- Bulletin No: 2023-07
Collateral Verifications – Assigned Exception Rates for 2023
Updated on April 17 to reflect 2023 rates.
The Federal Home Loan Bank of Dallas' (Bank) collateral verification requirements, as more fully described in the Bank's Member Products and Credit Policy (MPCP), require periodic reviews of members on blanket collateral status to determine the ineligible loan and document exception rates to be used to calculate borrowing capacity. Ineligible loan and document exception rates become outdated and are no longer valid after the end of the year following the most recent review.
For members on blanket collateral status that have never had a desktop review or onsite collateral verification, or that have outdated ineligible loan and/or document exception rates, the Bank's policy requires the application of default exception percentage rates. The exception rates are assigned based on a member's classification as either a Community Financial Institution (CFI) or Large Financial Institution (LFI), as defined in the MPCP for banks and thrifts, or as a credit union (CRU).
Effective April 17, 2023, new members, members that have never had a desktop review or onsite collateral verification, and members that had their last review prior to 2022 will be assigned the default rates set forth below. These default rates are derived from the results of all onsite and desktop reviews conducted by the Bank during 2021 and 2022.
| Collateral Type | Exception Type | CFI Median | LFI Median |
CRU Median |
|---|---|---|---|---|
| Single Family | A: Ineligible Loans | 5.3% | 13.0% | |
| B: Documentation Exception on Eligible Loans | 3.0% | 0.0% | ||
| Combined = A + B | 8.3% | 13.0% | ||
| Multifamily | A: Ineligible Loans | 4.0% | ||
| B: Documentation Exception on Eligible Loans | 5.0% | |||
| Combined = A + B | 9.0% | |||
| Commercial Real Estate | A: Ineligible Loans | 11.0% | ||
| B: Documentation Exception on Eligible Loans | 5.0% | |||
| Combined = A + B | 16.0% | |||
| Commercial Construction | A: Ineligible Loans | 2.0% | ||
| B: Documentation Exception on Eligible Loans | 3.3% | |||
| Combined = A + B | 5.3% | |||
| Land | A: Ineligible Loans | 11.0% | ||
| B: Documentation Exception on Eligible Loans | 3.3% | |||
| Combined = A + B | 14.3% | |||
| Home Equity | A: Ineligible Loans | 4.0% | 9.0% | |
| B: Documentation Exception on Eligible Loans | 8.5% | 8.5% | ||
| Combined = A + B | 12.5% | 17.5% | ||
| Small Business | A: Ineligible Loans | 53.0% | ||
| B: Documentation Exception on Eligible Loans | 4.4% | |||
| Combined = A + B | 57.4% | |||
| Small Farm | A: Ineligible Loans | 12.3% | ||
| B: Documentation Exception on Eligible Loans | 4.4% | |||
| Combined = A + B | 16.7% | |||
For additional information, please contact the Bank's Collateral Services department at collateral@fhlb.com or 844.541.0597.
Sincerely,
Gustavo Molina
EVP and Chief Banking Operations Officer