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FHFA Announces Guidance for Small Businesses Regarding PPP Loans

NationalMortgageProfessional.com
Apr 24, 2020
Photo credit: Getty Images/krblokhin

To support small and community banks, the Federal Housing Finance Agency has announced that Federal Home Loan Banks (FHLBanks) can accept Paycheck Protection Program (PPP) loans as collateral when making loans, called advances, to their members.
 
FHLBanks can accept loans guaranteed by the Small Business Administration (SBA) under the PPP, provided FHLBanks comply with certain safety and soundness requirements. On April 3, the Small Business Administration launched PPP, a $349 billion emergency loan program. On Friday, President Trump signed a measure increasing the funding available through the PPP. 
 
To date, the FHLBanks have been able to meet the needs of their members, especially small and community banks, during the COVID-19 national emergency. Accepting PPP loans will provide additional liquidity for small and community banks to borrow from their FHLBank to support the small businesses in their communities.

 
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