Federal Home Loan Bank Affordable Housing Program Overview

The Federal Home Loan Bank Affordable Housing Program is a vital initiative that helps make homeownership a reality for low-income families. The program provides funding to support the development of affordable housing.

The Federal Home Loan Bank Affordable Housing Program offers a range of benefits, including below-market interest rates and favorable loan terms. These benefits make it easier for developers to build affordable housing units.

The program has a long history of helping to address the nation's affordable housing crisis. Since its inception, it has provided billions of dollars in funding to support the development of affordable housing units across the country.

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The Affordable Housing Programs offered by the Federal Home Loan Banks (FHLBanks) are a vital part of their mission to provide funding for affordable housing and community development. The AHP (Affordable Housing Program) has been in operation since 1990 and has collectively made available over $8 billion in subsidies, assisting over one million households.

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Each FHLBank must set aside at least 10 percent of its prior year's income to fund its AHP, with a minimum annual allocation of $100 million. In 2023, the FHLBanks contributed over $355 million in combined AHP subsidies, exceeding the statutory requirement.

FHLBank members can apply for AHP funding through two distinct programs: a competitive application program and a set-aside program. The competitive program is geared toward development of multifamily housing, while the set-aside program targets individual borrowers and homeowners.

The AHP competitive program awards funds on a competitive basis to applicants, with a maximum of 100 points possible for each project application. In 2023, the FHLBanks awarded over $319 million in AHP competitive funds, supporting 443 rental and owner-occupied housing projects and a total of over 20,000 housing units.

The AHP set-aside program is available on a transaction-by-transaction, first-come, first-served basis, with funding dedicated to supporting low- and moderate-income households in the purchase or rehabilitation of a home. In 2023, all 11 FHLBanks offered AHP set-aside funding, with total funding of approximately $124 million.

Here's a breakdown of the AHP set-aside fund awards in 2022:

By providing funding for affordable housing, the FHLBanks are not only helping low- and moderate-income households, but also stimulating local economies. For every $1 million invested in AHP, $14.3 million of housing is constructed or rehabilitated, and 158 jobs are created.

The Federal Home Loan Bank's Community Investment Program (CIP) offers advances to member financial institutions to finance housing for low- and moderate-income households.

Each FHLBank is required to offer CIP advances, which can finance housing for households with incomes up to 115 percent of the area median income.

These advances also support commercial and economic development activities that benefit low- and moderate-income families.

FHLBanks also offer Community Development Cash Advances for Targeted Economic Development, which provide funding for projects that benefit specific economic development activities.

In urban areas, CICA funding is targeted to beneficiaries with incomes at or below 100 percent of the area median income, while in rural areas, it's targeted to beneficiaries with incomes at or below 115 percent of the area median income.

FHLBanks also have Targeted Community Lending Plans that evaluate and prioritize funding for affordable housing needs in their districts.

Each FHLBank must annually produce a Targeted Community Lending Plan, which involves market-based research and identification of emerging trends.

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The plan must be developed in consultation with the FHLBank's Affordable Housing Advisory Committee and members, housing associates, and public and private economic organizations.

FHLBanks also operate voluntary programs that are created with input from their board of directors, AHAC, and community stakeholders.

These programs are flexible and responsive to local needs, and they range from direct grant programs to discounted advances.

FHLBank Atlanta's Affordable Housing Program sets aside 10 percent of its annual net income to invest in its members' communities through various products and services.

The program provides critical funding for affordable housing development throughout the communities served by its members.

Community investment advances offer reduced rate funding that supports affordable housing and local economic development.

For every $1 million invested in the AHP, $14.3 million of housing is constructed or rehabilitated and 158 jobs are created.

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Voluntary programs are a vital part of FHLBank's efforts to support affordable housing in their districts.

These programs are created with input from a FHLBank's board of directors, AHAC, and community stakeholders, making them tailored to local needs.

Voluntary programs can range in duration and structure, from direct grant programs to discounted advances.

They target very low-, low-, or moderate-income individuals, making a significant difference in their lives.

FHLBanks operate these programs in addition to their competitive and set-aside programs, offering a more flexible and responsive approach to community support.

Voluntary programs are designed to be flexible and responsive to local needs, providing a unique solution to each community's challenges.

By offering discounted advances and direct grant programs, FHLBanks can provide financial assistance to those who need it most.

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To request disbursements, approved projects must submit a request within 12 months of the effective date on their AHP Agreement. The entire AHP subsidy must be requested within 42 months, and all disbursements must be funded or funds de-obligated within 48 months.

You can grow your customer base by supporting community heroes like law enforcement officers, educators, and first responders through the Community Partners program. This program provides home purchase assistance to current or retired community heroes and their families.

The Community Rebuild and Restore Product offers up to $10,000 for the rehabilitation of homes damaged by natural disasters in designated disaster areas. This can help homeowners in your community get back on their feet.

You have a project that's been approved, and now it's time to get the funds flowing. All approved projects must submit a disbursement request within 12 months of the effective date on the project's AHP Agreement.

The entire AHP subsidy must be requested within 42 months. This is a pretty tight deadline, so make sure you have a plan in place to meet it.

You'll need to fund all disbursements or de-obligate funds within 48 months of the effective date shown on the project's AHP Agreement. This gives you a bit more time to wrap things up, but don't get too comfortable – you still need to stay on track.

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FHLBank Atlanta offers a range of products to support community development and affordable housing.

The Community Partners product provides home purchase assistance to eligible individuals, including law enforcement officers, educators, and first responders, with up to $10,000 in assistance for down payments and closing costs.

Members can also support homeowners in disaster areas with the Community Rebuild and Restore Product, providing up to $10,000 for home rehabilitation.

The First-time Homebuyer Product (FHP) helps first-time homebuyers cover down payments and closing costs, making homeownership more accessible.

The AHP General Fund offers flexible funding for affordable owner-occupied and rental housing, partnering with member institutions and community developers to support very low- to moderate-income families and individuals.

FHLBank Atlanta's community development opportunities also include funding for housing and low- to moderate-income families and underserved communities, with programs and funding changing annually based on district needs.

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