The fundamental business of the FHLBanks is to provide members with loans secured by mortgage-related collateral and other credit products; simply put, to provide primary liquidity to the U.S. housing market. The current FHLBank membership is comprised of many types of financial institutions, from small community thrifts to insurance companies to money-center commercial banks. In addition, these members are located in every state. With such diversity of membership, FHLBank lending must be flexible to accomplish this public purpose. As a result, loans (often referred to as advances) are available in a wide variety of maturities and structures, enabling members to conservatively match their assets with their liabilities.

The FHLBanks raise money to fund member lending through the daily sale of debt securities (known as Consolidated Obligations) in the global capital markets. Just as the FHLBanks are flexible lenders, they are also known for their ingenuity in debt issuance, which is reassuring to both members and underwriters. The FHLBanks' Office of Finance acts as the central debt issuance facility for the regional FHLBanks. Available fixed-income debt products include discount notes, bonds with fixed rates and fixed maturities, callable bonds, putable bonds, variable rate bonds, and Global bonds. These are sold through a broad, international network of underwriters, or as direct placements. Proceeds enable member financial institutions to extend mortgage credit to U.S. homebuyers, and fund economic development projects at the local level.

Buyers of FHLBank debt securities represent the entire spectrum of fixed-income investors including commercial banks, central banks, mutual funds, major corporations, pension funds, government agencies, and individuals.