The Federal Home Loan Bank system (FHLB) provides which of the following?

The Federal Home Loan Bank system (FHLB) is primarily designed to support residential mortgage lending through its member financial institutions, which include banks, credit unions, and thrift institutions. The FHLB provides advances, which are essentially loans to these financial institutions, enabling them to have access to funding. This allows the member institutions to offer mortgage loans to qualified borrowers more effectively.

By providing liquidity in the form of advances, the FHLB helps to ensure that financial institutions have the necessary capital to meet the demands for home loans in their communities. This support for residential mortgage lending is crucial because it not only facilitates homeownership but also contributes to the overall stability and availability of credit in the housing market.

In contrast, direct loans to borrowers, federal guarantees for lenders, and complimentary services like appraisals are not the primary functions of the FHLB system. Their focus remains on providing liquidity and stability to the financial institutions that serve as intermediaries in mortgage lending.