Council of Federal Home Loan Banks Supports Streamlining AHP Application Process

FHLBanks anticipate providing approximately $1 billion in support for affordable housing and community development in 2024

WASHINGTON, June 20, 2024 (GLOBE NEWSWIRE) — Ryan Donovan, President and Chief Executive Officer of the Council of Federal Home Loan Banks, the public voice of the Federal Home Loan Bank System (FHLBank System), today released the following statement in response to the publication of the Federal Housing Finance Agency’s Request for Input on Affordable Housing Program (AHP) applications.

“We appreciate FHFA recognizing the feedback it heard from the FHLBanks, their members, and affordable housing developers during its review of the FHLBank System that the AHP application process is overly complicated, and we welcome the opportunity to respond to this Request for Input.

“Solving the affordable housing crisis is one of our greatest societal challenges and while we recognize that no single entity or group can alone solve the problem, the FHLBanks today are one of the largest sources of private funding for affordable housing, down payment assistance and community development in the country with an expected $1 billion available in 2024.

“One of the biggest challenges facing community and affordable housing groups desperately seeking funding is how best to navigate the complexity of the AHP grant program application process. The FHLBanks, along with our members who provide AHP grants directly to consumers and housing providers, provide tools and guidance to applicants to ensure compliance for their projects and we fully support creating an easier path to for accessing AHP funding. We hope this is the beginning of a process to meaningfully streamline AHP regulations to enhance access use and, importantly, the impact of the program.” 

Additional information:

Each of the 11 FHLBanks have implemented programs designed to broaden the AHP applicant pool, extending the reach of the program into underserved and needy communities. Some examples include:

  • FHLBank San Francisco established the Nevada Targeted Fund, the first program of its kind that specifically targets affordable housing projects in the state. To ensure the widest pool of applicants, the Bank granted $850,000 to the Nevada Housing Coalition over two years to build the Coalition’s capacity, expand affordable housing development capabilities, and initiate educational efforts to ease the application process. 
  • FHLBank Atlanta’s Multifamily Housing Bridge Fund awarded $400,000 to Crescent Drive Apartments in Durham, North Carolina through member Truist Bank. The grants will enable the completion of a large, 82-unit complex specifically serving low- to middle-income households: 18 units are for households earning up to 30% of AMI, 42 for those earning up to 60%, and 22 for those earning up to 80%.
  • FHLBank Chicago’s “Cultural Exploration” initiative provides an avenue for it to meet with members in local communities and work toward innovative solutions. One member, IAA Credit Union, attended a “Cultural Exploration” event and left with a solution for a customer who had been previously approved for down payment assistance through FHLBank Chicago’s AHP, but was faced with walking away from the purchase due to structural issues identified late in the process. IAA Credit Union paired the AHP funding with a USDA 504 loan program, which can be used to address hazardous repair or modernization of a property, allowing the buyer to move forward with the purchase.

Each FHLBank is required by law to contribute a minimum of 10% of income to its Affordable Housing Program (AHP). Last year, the 11 FHLBanks voluntarily agreed to contribute a total of 15% of income to affordable housing and community development initiatives on a go forward basis. Each FHLBank is either already making additional voluntary contributions or is in the process of increasing its voluntary contribution levels. The FHLBank System recently reported combined net income of over $6.6 billion for 2023 with a combined AHP assessment of $752 million. Including expected voluntary contributions based on their 2023 financial results, the FHLBanks expect to provide approximately $1 billion in support for affordable housing and community development initiatives in 2024.

About: The FHLBanks are 11 regionally based, wholesale suppliers of lendable funds to financial institutions of all sizes and many types, including community banks, credit unions, commercial and savings banks, insurance companies, and community development financial institutions. The FHLBanks are cooperatively owned by member financial institutions in all 50 states and U.S. territories. The steady supply of lendable funds from FHLBanks helps U.S. lenders invest in local needs including housing, jobs, and economic growth. The Council of FHLBanks represents all 11 FHLBanks.

Council of FHLBanks
Peter E. Garuccio
202-955-0002 ext. 14
[email protected]

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