Must the FHLBC member hold the DPP recipients first mortgage in their portfolio?
The FHLBC member is not required to hold the DPP recipient’s first mortgage loan in their portfolio. Members should check with the secondary market investor on their requirements for purchasing first mortgage loans where there is a second lien on the property from a down payment assistance grant. Though the FHLBC member may elect to have a servicing agent service the DPP lien for them, the member may not transfer the DPP lien to another party without the FHLBC’s prior consent.
