What is the lender risk account (LRA)?
The LRA is an account that is set up in the name of the member at FHLBI. It contains money that is set aside each month from the interest income stream of sold loans for expected losses. Should loans within an MCC (or pool) perform as expected, the member will receive proceeds from the LRA as payout over time. The LRA is a benefit to the member because it (along with the SMI) replaces the guarantee fee that is charged by other agencies. To find out more about how the LRA can add to your income over time, please contact your marketing representative.
