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​Federal Home Loan Bank

Affordable Housing & Community Investment

 

FHFA and Affordable Housing & Community Investment

FHFA is responsible for establishing Affordable Housing Goals, maintaining data, annual reporting, and developing regulatory policies, as well as, conducting off-site monitoring and examinations of the Federal Home Loan Banks' housing and community investment programs and activities. 

Programs include:

  1. the Affordable Housing Program (AHP),

  2. the Community Investment Program (CIP),

  3. the Community Investment Cash Advance Program (CICA), and

  4. the Community Development Financial Institutions membership in the FHLBanks. 

FHFA is required to monitor and report annually on the Federal Home Loan Banks’ support of their low-income housing and community development activities to the Federal Home Loan Banks’ Advisory Councils. This report fulfills that requirement.​ In 2014, the FHLBanks contributed approximately $293 million to their Affordable Housing Programs, and awarded over $328 million for rental and ownership housing.

 

Read the latest Low-Income Housing and Community Development Activities of the Federal Home Loan Banks Report.

 

1. Affordable Housing Program

By law, each Federal Home Loan Bank (FHLBank) must establish an Affordable Housing Program (AHP).

Under the Federal Home Loan Bank Act​, (Bank Act) the specified uses of AHP funds are to:

  • Finance the purchase, construction, or rehabilitation of owner-occupied housing for households at 80 percent or less of the area median income, and

  • Finance the purchase, construction, or rehabilitation of rental housing where at least 20 percent of the units are affordable for and occupied by very low-income households (with incomes at 50 percent or less of the area median income).

Each FHLBank must contribute 10 percent of its net earnings to its AHP.

Each FHLBank is authorized to operate two AHP programs.

  • Competitive Application Program a financial institution member of a FHLBank submits an application to that FHLBank on behalf of a non-profit sponsor.

  • Homeownership “Set Aside” Program that provides down payment and closing cost assistance for home buyers or funds to homeowners to rehabilitate their homes.

Establishment of homeownership set-aside programs for a variety of purposes is elective for each FHLBank. FHFA regulations limit the amount of funds that a Bank can allocate to its set-aside program. AHP leverages other types of financing and provides housing affordable for special-needs and very low-income households.

The Results

Since 1990 through 2014, the FHLBanks have contributed approximately $4.6 billion in AHP subsidies to support almost 759,000 units of housing.

 

2. Community Investment Program

The Bank Act also requires each FHLBank to offer Community Investment Program (CIP) advances (loans) to their member financial institutions.

The Federal Home Loan Banks pass on the program loans to:

  • finance housing for households with incomes up to 115 percent of the area median income or

  • finance commercial and economic development activities that benefit low-income individuals or low-income areas (defined as 80 percent or less of area median income).

 

3. Community Development Cash Advance (CICA) for Economic Development 

Under the CICA program, which was established by regulation, the FHLBanks offer advances for economic development The Community Investment Cash Advances (CICA) programs offer funding for their members to use to provide financing for projects that are targeted to certain economic development activities.  These include commercial, industrial, manufacturing and social services projects, infrastructure, and public facilities and services.  CICA lending is targeted to specific beneficiaries, including small businesses and certain geographic areas.  Two types of CICA programs benefit households at specified income levels.  These are:  Rural Development Funding (RDF):  Projects in rural areas for beneficiaries with incomes at or below 115% of the area median income;

  • Urban Development Funding (UDF) Program:  Projects in urban areas for targeted beneficiaries with incomes at or below 100% of the area median income; and

  • Rural Development Funding (RDF):  Projects in rural areas for beneficiaries with incomes at or below 115% of the area median income; 

 

 ​​​​​4. Community Development Financial Institutions members in the FHLBanks

Community Development Financial Institutions (CDFI) are specially designated financial intuitions that serve a niche market underserved by traditional financial institutions. The FHLBanks, as part of the affordable housing intuitive, extend membership to CDFI's. As of December 31, 2012, 131 depository CDFIs and 12 non-depository CDFIs were Bank members​

© 2016 Federal Housing Finance Agency