FHLBanks Respond to FHFA Report on Affordable Housing Investments
The Council of Federal Home Loan Banks (FHLBanks) praised this week’s publication of a report from the Federal Agency for Housing Financing (FHFA), which highlighted the banks’ growth to support affordable housing and community development efforts through 2023.
The report details FHLBanks’ activities in several programs, including the Affordable Housing Program (AHP), the Community Investment Program (CIP), the Community Investment Cash Advance Program (CICA) and other “voluntary targeted mission activity programs,” according to the report . report.
The report found that the FHLBanks provided $446.9 million in AHP funds, including $35.2 million in voluntary AHP expenditures. It also indicated that the banks provided an additional $134.6 million in voluntary grants – totaling more than $581 million in financing for affordable housing and community development projects last year.
Ryan Donovan, president and CEO of the Council of FHLBanks, appreciation expressed for the FHFA report and said it demonstrates the banks’ commitment to expanding the availability of affordable housing.
“Over the past two years, the FHLBanks have made tremendous strides to address the housing supply and affordability issues facing the country,” Donovan said. “This report clearly demonstrates the positive impact and responsiveness of the eleven FHLBanks to the needs of their members and the communities they serve.”
Donovan added that the council is “grateful to FHFA for publishing the report” and looks forward “to continuing to work with the agency, financial regulators and other stakeholders to develop innovative and workable solutions to the nation’s needs in the area of housing financing.”
The overall recovery in FHLBank’s revenues corresponded with “increased support for affordable housing and community development initiatives,” FHFA said in the report. FHLBanks are required to allocate 10% of their prior year net income to the AHP in response to previous FHFA feedback.
“[T]The FHLBanks voluntarily agreed in early 2023 to contribute 15% of the prior year’s net profits to affordable housing and community development, an increase of 50% from the 10% required by law,” the council said in the response letter.
“Based on 2022 net income, the FHLBank system was valued at $355.2 million for AHP in 2023, as stated in FHFA’s report. The $581 million in AHP and voluntary contributions in 2023 represents a total of more than 16 percent, or more than 60% above the legal minimum.”
But affordable housing issues remain a prominent factor plaguing much of the country. The presidents and board chairs of the eleven FHLBanks – who have been under pressure to allocate more money to affordable housing – letters sent to the US Department of the Treasury in August, arguing that raising their contribution thresholds will not fully resolve the complexity of the current situation.
