On October 7, The Federal Housing Finance Agency (FHFA) released its annual report on the low income housing and community development activities of the twelve Federal Home Loan Banks (FHLBs). The FHLBs support these activities through the Affordable Housing Program (AHP), Community Investment Program (CIP), and Community Investment Cash Advance Program (CICA). In 2013, the banks distributed $322 million in AHP funds, assisting more than 37,000 low or moderate income households.
The Federal Home Loan Bank Act requires each FHLB to establish an AHP and contribute 10% of its net income from the previous year to the AHP. The minimum annual combined contribution by the twelve Banks must total $100 million. AHP must be used to purchase, construct, or rehabilitate housing. There are two AHP programs, the Competitive Application program that all FHLBs are required to offer, and the Homeownership Set-Aside Grant program, which a bank may choose to offer.
The Competitive Application program provides grants or reduced interest rate loans to a FHLB’s member financial institutions that apply on behalf of a housing sponsor. This program supports the development of rental and owner-occupied housing. The Homeownership Set-Aside program provides grants to a bank’s member financial institutions that in turn grant funds directly to households for downpayments, closing costs, counseling, or rehabilitation assistance. At least 20% of an AHP-assisted rental project’s units must be occupied and affordable for very low income (VLI) households, those with income at or below 50% of area median income (AMI). AHP-assisted homeowner units must be occupied by a household with income at or below 80% of AMI.
From 1990 to 2013, the FHLBs allocated more than $4.2 billion to AHP. The $322 million distributed in 2013 is a 57% increase over the previous year, and the 37,595 units assisted is a 40% increase from 2012. Approximately $254 million went toward the Competitive Application program, assisting 27,582 households, and $68 million went to the Homeownership Set-Aside program, helping 10,013 homeowners. The amounts varied from bank to bank, ranging from $7.8 million at the Seattle Bank to $60.2 million at the San Francisco Bank.
Since the beginning of the Competitive Application program in 1990, approximately 72% of the units assisted have been affordable to VLI households. In 2013, 74% of rental units and 53% of owner-occupied units served VLI households. Of these, 21% of the rental units and 5% of the owner-occupied units assisted extremely low income households, those with income at or below 30% of AMI. Furthermore, 59% of the projects supported in 2013 served people who were homeless or people with special needs. Approximately 31% of the projects reserved units for individuals with disabilities, 24% reserved units for homeless households, 19% reserved units for elderly households, and 15% reserved units for two or more special needs or homeless households.
Approximately 87% of the units subsidized through the Competitive Application program in 2013 were rentals, 7,700 more units than in 2012. The number of rental units assisted through this program has increased significantly since 2007, as the need for rental housing affordable to lower income households increased.
Since 1990, approximately 68% of the Competitive Application program funding has supported developments in urban areas. The trend is toward a greater distribution of supported properties in urban communities, with 78% of all assisted units in urban areas in 2013.
The AHP Competitive Application program is often used with other sources of funding, such as the Low Income Housing Tax Credit program (48%), the HOME Investment Partnerships program (34%), and the Community Development Block Grant program (11.5%).
The report also includes data on the AHP Homeownership Set-Aside Program, the Community Investment Program, and the Community Investment Cash Advance Program.
The 2013 Low-Income Housing and Community Development Activities of the Federal Home Loan Banks report is available at http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2013LowIncHsgRptFinal100714.pdf
See also, “The Federal Home Loan Banks’ Affordable Housing Program and Community Investment Program,” page 231 of NLIHC’s 2014 Advocates’ Guide, http://nlihc.org/sites/default/files/2014AG-231.pdf