The Federal Home Loan Banks (FHLBanks) have launched approximately three dozen new initiatives since 2022 to address housing and community development needs across their districts. This year, they are projected to contribute $1 billion to these efforts, adding to the $8.3 billion they have allocated since 1990.
In a recent letter, the presidents of the 11 FHLBanks outlined several recommendations to enhance housing supply and access to their programs. A key proposal is to expand the access of Community Development Financial Institutions (CDFIs) to FHLBank services. This includes allowing the use of the Bond Guarantee Fund to secure FHLBank advances and permitting the pledge of Community Financial Institution collateral for these advances.
The letter also suggests simplifying the Affordable Housing Program (AHP), which is currently burdened by 13 regulations and five bulletins. The FHLBanks argue that the complex regulatory framework effectively excludes smaller members from participating, as the administrative costs diminish the benefits of the awards.
Additionally, the FHLBanks propose increasing their support for state housing finance agencies and reforming both the Community Investment Cash Advance (CICA) and Community Investment Program (CIP) to better serve community needs.
These recommendations aim to make FHLBank programs more accessible and effective in meeting the growing demand for affordable housing and community development projects across the United States.
