FHLBanks Assist 65,000 Households Through Key Programs MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent 

 The Federal Home Loan Banks’ (FHLBanks) affordable housing and community development support grew significantly last year, as earnings improvement across the FHLBank System corresponded with greater commitments to lower-income communities, according to a new Federal Housing Finance Agency (FHFA) report, “2023 FHLBank Targeted Mission Activities Report.”

 The Report highlights the FHLBanks’ performance and activities under the Affordable Housing Program (AHP), the Community Investment Program (CIP), the Community Investment Cash Advance Program (CICA), and additional voluntary targeted mission-activity programs. “2023 FHLBank Targeted Mission Activities Report” also measures the growth in FHLBank membership and advances among non-depository Community Development Financial Institutions (CDFI), as well as the FHLBanks’ progress in meeting the affordable housing goals for mortgage purchases under the Acquired Member Assets (AMA) program.

 The Federal Home Loan Bank Act (Bank Act) requires each FHLBank to establish an AHP. Under the program, members may apply to the FHLBank for AHP funds, which are provided to approved projects and households for the purchase, construction, or rehabilitation of owner-occupied and affordable rental housing. AHP funds may be in the form of grants or reduced interest rates on advances (subsidized advances) from an FHLBank to the member. A family’s household income must be at or below 80% of area median income (AMI) to be eligible for funding through AHP’s owner-occupied housing programs. For AHP-assisted rental housing to be eligible for funding, at least twenty percent of the project’s units must be affordable for and occupied by households with incomes at or below fifty percent of the AMI.

 “The Federal Home Loan Banks assisted close to sixty five thousand low- or moderate-income households and supported more than four hundred targeted economic development projects in 2023 through grants and advances,” said FHFA Director Sandra L. Thompson. “I am encouraged to see the Federal Home Loan Banks pursue creative and innovative approaches to addressing local housing needs through the voluntary programs they undertake in addition to meeting their obligations under the Affordable Housing Program.”

 Funds awarded through the AHP rose by approximately one hundred and eighty million dollars in 2023. Combined advances under the CIP and CICA programs, issued to members to finance affordable housing and economic development projects in lower-income communities, grew by forty four percent.

 The increased support for affordable housing and community development initiatives came as FHLBank earnings have recovered in the last few years. The FHLBanks are statutorily mandated to commit ten percent of net income for the prior year to the AHP, which totaled approximately three hundred fifty five point two million dollars in 2023. Their actual AHP awards in 2023 were approximately ninety one point seven million dollars or about twenty six percent above that amount. FHLBank contributions to the AHP rose for the first time since 2018.

Key takeaways from the report include:

• The FHLBanks approved approximately $446.9 million in total contributions to the AHP, assisting more than thirty three thousand low- or moderate-income households, more than seventeen thousand of which were very low-income households. This funding represented a sixty seven percent increase from 2022.
• The FHLBanks assisted another approximately thirty two thousand low- or moderate-income households through the CIP and supported three hundred and ninety nine targeted economic development projects through CICA. Overall, CIP and CICA advances totaled just over seven billion dollars, an increase of over two billion dollars from 2022.
• One additional non-depository CDFI joined the FHLBank System, bringing the total to seventy one non-depository CDFI members. That number has grown by eighteen percent since 2019. Outstanding FHLBank advance balances at non-depository CDFI members were approximately $336.2 million at year-end 2023, an increase of about $63.8 million from 2022.

 Providing liquidity such as advances to CDFIs is an important means by which the FHLBanks support financing of low-income housing and community development. FHFA is working with various stakeholder groups to help CDFIs—a key source of assistance for underserved communities—overcome potential difficulty accessing FHLBank membership, products, and services.

Click here to read the “2023 FHLBank Targeted Mission Activities Report” in its entirety.

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