Affordable Housing Programs

The FHLBank System is unique among government-sponsored enterprises due to its public policy responsibilities and its role in housing finance. In addition to providing on-demand liquidity to member financial institutions, the System also delivers on its commitment to promote community development through two of the nation's most successful ongoing housing initiatives: the Affordable Housing Program and the Community Investment Program, as well as through the Community Investment Cash Advance Program. In fact, the Affordable Housing Program was honored by the National Housing Conference in 2010 with its highest award.

The Affordable Housing Program (AHP) is designed to encourage the creation of innovative lending efforts by members to increase affordable housing stock. The FHLBanks contribute ten percent of their annual net earnings to the AHP, and AHP funds subsidize the interest rates for loans to member financial institutions and provide direct subsidies to members making loans for the purchase, construction, or rehabilitation of very low- to moderate-income owner-occupied or rental housing. Since 1990, AHP funds have supported more than 778,000 households, ranging from rental and owner-occupied housing in both urban and rural areas, to special needs households, including individuals with disabilities and the elderly. Through 2015, the Banks have awarded over $5.1 billion through the AHP, with more than half of the households supported qualifying as very low-income.

Through the Community Investment Program (CIP), the Banks fund advances or letters of credit for economic development targeted for lower-income communities. Between 1990 and 2015, the CIP has funded more than $56 billion in housing advances and approximately $7.5 billion in economic development advances, benefiting over 839,000 housing units, as well as community development projects in very low-, low-, or moderate-income areas.

The FHLBanks can also choose to participate in the Community Investment Cash Advance (CICA) Program. Through the CICA Program, Banks provide advances, letters of credit, or grants for economic development targeted for lower-income communities. From 1990 to 2015, the Banks funded over $23 billion in CICA economic development advances.

Here are some facts about FHLBank affordable housing programs:

  • The AHP, CIP, and CICA Programs are authorized by the Federal Home Loan Bank Act. The Federal Housing Finance Agency monitors these activities, and issues an annual review of the programs.

  • The AHP Competitive Application Program awards grants to Bank members to support housing sponsors' projects targeted at very low- and low-or moderate-income households. Since its inception, nearly 75% of  rental units and over half of all owner-occupied units assisted by the AHP competitive application program served very low-income households.

  • The AHP Homeownership Set-Aside Grant Program expands homeownership opportunities for very low- and low- or moderate-income households. This program awards grants to Bank members who then provide these funds to households for down payment or closing cost assistance, counseling or rehabilitation assistance towards the purchase or rehabilitation of an owner-occupied home. From 1995 through 2015, the set-aside program provided approximately $865 million in funding, assisting more than 153,000 households, the vast majority of whom were first-time home-buyers.

  • CIP funds can be used to support housing-only or economic development projects, such as service or educational facilities, hospitals, nursing homes, civic centers, daycare centers, grocery stores, roads, utilities, water, and wastewater structures. In 2015, the CIP had over $3.2 billion in Advance Commitments, benefiting 39,000 households.

  • In 2015, CICA advance funding was approximately $4 billion, funding economic development projects in both urban and rural communities.

  • Additional information on these programs is available from the Community Investment Officer at any FHLBank, or from the Federal Housing Finance Agency, 400 7th Street, SW, Washington, DC 20024. Phone: (202) 649-3800. Email: FHFAinfo@fhfa.gov.

    Source: Federal Housing Finance Agency