Facts at a Glance: FHLBanks (con’t)

Benefits

• Advances increase the availability of residential mortgage and community investment credit, thus lowering borrowing costs for homebuyers, small business and other community borrowers.
• Advances enable member institutions to ensure a steady flow of credit and other services for housing and community development. Advances provide funding to smaller lenders that lack access to funding sources available to larger entities.

Collateral

• FHLBank members who borrow advances must pledge collateral against them. (By statute, this collateral is limited to major types of mortgage loans and mortgage-backed securities.) In addition, Community Financial Institutions (CFIs), those with assets of less than $567 million, may also pledge small business and agricultural loans.

Community Investment Program

• $47 billion in CIP-funded loans have financed nearly 600,000 housing units and thousands of economic development projects
• CIP is a lending program that provides below-market-rate loans that enable banks to extend long-term financing for housing and economic development that benefits low-and moderate-income families and neighborhoods.