A recent report from the Federal Housing Finance Agency highlights the activities of the Federal Home Loan Banks in supporting a number of low-income housing initiatives in 2013. The 12 regional Federal Home Loan Banks are overseen by FHFA. The FHFA is also the conservator of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).
Federal Home Loan Banks provide low-income housing
The FHL Banks are involved in a variety of of low-income housing and community development activities through the Affordable Housing Program (AHP), Community Investment Program (CIP) and Community Investment Cash Advance Program (CICA). Through these federally mandated programs, the FHL banks provide grants and loans (called advances) to their members, and the members distribute these funds to benefit a range of very low- and low- or moderate-income households and communities.
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Affordable Housing Program details
According to the report, the FHL Banks contributed around $297 million to the AHP in 2013, ten% of their net earnings for the preceding year and up more than 57% from 2012. When you add in monies returned to the Banks from previous years, over $322 million in AHP funds were disbursed in 2013. More than 37,000 low- or moderate-income households were assisted by the program, including 20,000 very low-income households.
The FHL Banks have awarded over $4.4 billion through the AHP since 1990, providing assistance to over 724,000 households, including 428,000 very low-income households. AHP funds have supported rental and owner-occupied housing in urban and rural areas, as well as many special needs households such as individuals with disabilities or the elderly.
Community Investment and Community Development Cash Advance Program details
More than $2.7 billion in CIP advances for housing and community development projects were also funded throughout 2013, providing a financial aid to residents in over 25,000 rental and owner-occupied housing units.
The FHL Banks also disbursed morethan $2.6 billion in advances for targeted economic development projects under the CICA program in 2013. This figure was almost double the 2012 volume. The Banks have provided $57 billion in CIP advances since 1990 — $50 billion in CIP housing advances and around $7 billion in CIP economic development advances.
Over the last 13 years, more than $17 billion in CICA economic development advances have also been provided through FHL Banks.