Warehouse Lending: What Is It and How Does It Work?

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Want to learn more? Contact Joe Palank, MBA's Associate Director of Residential Policy and Member Engagement.

The liquidity for most home mortgage originations in the United States is provided by "warehouse lending" facilities - a little-known but vital source of liquidity that facilitates the American dream of homeownership. 

An Overview of Warehouse Lending

Warehouse lending operations efficiently and affordably finance the home mortgage lending of independent mortgage bankers (IMBs) that account for well more than half of all mortgage originations.

The warehouse lending business is one of the most important, and perhaps least understood, ways in which insured depository institutions support our nation's housing finance system. Warehouse lending is a low-risk, efficient line of business that promotes competitive housing finance markets, lowers consumer costs, and supports safe and sound lending practices.

In this paper, you will read more about warehouse lending such as:

  • Who are Warehouse Lenders?
  • How does Warehouse Lending Work?
  • Is Warehouse Lending an Expensive Source of Funds?
  • Is Warehouse Lending a Safe Line of Business?