FHLBank Affordable Housing Programs - More Than 15 Years of Success Stories

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 (AHP) and the Community Investment Program (CIP).

AHP subsidizes the interest rates for loans to member financial institutions, and provides direct subsidies to members making loans for the purchase, construction, or rehabilitation of very low to moderate income owner-occupied or rental housing. This program is designed to encourage the creation of innovative lending efforts by members to increase affordable housing stock. It works. Since Program inception, over $3 billion in subsidies have been awarded by the FHLBanks, helping to finance 600,000 housing units that might otherwise not have been built.

CIP provides funds for community-oriented mortgage lending for families whose incomes do not exceed 115% of the area median. CIP also directs lending towards economic development activities that are located in low to moderate income neighborhoods. Total CIP lending is now approaching $50 billion, financing 650,000 housing units and thousands of economic development projects.

The FHLBanks pursue these commitments vigorously on their own merits, without great fanfare. A little known fact: The FHLBanks are involved with one of every four homes built by Habitat for Humanity - about 7,000 in the last 10 years. This is one example of how strong and prosperous neighborhoods are built. Successful economic development efforts occur when local residents, community officials, county and state agencies, banks, landowners, non-profits and others commit time and resources to create healthier neighborhoods. Successful community development is about creating community wealth. Each neighborhood has gifts, resources and talents that can be nurtured to build a more cohesive, prosperous community. Focus on a community's inherent assets and strengths, and every step forward builds community wealth.

Successful community development requires partners that can lend expertise, resources and commitment - filling in the gaps between what already exists and what is still needed. The Federal Home Loan Bank System is such a partner. To fulfill the System's mission, new challenges must be met and new products developed.

Here are some facts about FHLBank affordable housing programs:

  • The AHP and CIP Programs were created by Congress under the Financial Institutions Reform, Recovery and Enforcement Act of 1989
  • AHP grants can subsidize construction, purchase and/or rehabilitation of owner-occupied and rental housing for very low-, low- and moderate-income households
  • AHP funds can be used for construction financing, permanent financing, principal reduction, down payment assistance or interest rate buy-down
  • Since inception, the FHLBanks have funded AHP with 10 percent of net income, or a minimum of $100 million annually
  • Total AHP commitments/contributions have averaged about $268 million annually for 2003-2007 (with $318 million in 2007)
  • AHP contributions since Program inception total over $3 billion and have helped create 600,000 housing units
  • If AHP were a stand-alone foundation, it would be the largest housing foundation in the country by a wide margin (measured by total commitments)
  • CIP makes loans available (generally at cost) for home purchase or rehabilitation to families whose incomes do not exceed 115% of the area median
  • CIP lending since Program inception is approaching $50 billion, financing 650,000 housing units and thousands of economic development projects

    • Use this link to read about recent FHLBank affordable housing initiatives.

    The map below shows the location of the 12 FHLBanks, and the states that they serve. To link directly to the affordable housing programs sponsored by the FHLBanks, just click on your state of residence.

    FHLBank of Seattle FHLBank of Seattle FHLBank of Seattle FHLBank of San Francisco FHLBank of Des Moines FHLBank of Topeka FHLBank of Dallas FHLBank of Atlanta FHLBank of Cincinnati FHLBank of Chicago FHLBank of Indianapolis FHLBank of Pittsburgh FHLBank of New York FHLBank of New York FHLBank of Boston

    Additional information on these programs is available from the Community Investment Officer at any FHLBank, or from the Federal Housing Finance Agency, 1777 F Street, NW, Washington, DC 20006. Phone: (202) 408-2500. Facsimile: (202) 408-1435.