The 12 Federal Home Loan Banks are the only way most of community financial institutions can access the global capital markets. Structured as cooperatives, their customers are also their owners, fostering conservative management and a long-term view of financial performance.

Frequently Asked Questions:
Federal Home Loan Banks? Affordable Housing Program

What is the Affordable Housing Program (AHP)?

The AHP is a competitive grant program that serves as the largest source of private sector grants for housing and community development in the country. It provides FHLBanks? member institutions the opportunity to partner with local developers and community organizations seeking to build and renovate housing for low- to moderate-income American households.

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When was the AHP created?

The AHP was created by Congress in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and began operations in 1990.

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How is the AHP funded?

Each FHLBank funds its own AHP with ten percent of its annual earnings.

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What types of projects may the AHP fund?

AHP grants can subsidize construction, purchase and/or rehabilitation of owner-occupied and rental housing for very low-, low- and moderate-income households.

AHP funds can be used for construction financing, permanent financing, principal reduction, down payment assistance or interest rate buy-down.

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How many projects have been developed and affordable housing units built since the inception of the AHP?

The AHP has facilitated the building of more than 845,157 housing units.

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How much money has been distributed through AHP across the country?

Since the programs inception in 1990, the Federal Home Loan Banks have awarded $5.165 billion in AHP funds. Total AHP commitments/contributions have averaged approximately $200 million annually for 2003-2012 (with $293 million in 2013).

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Does the AHP provide full funding for its affordable housing projects?

No. AHP funds are generally intended for gap financing. FHLBanks typically encourage members to work with local partners to develop innovative ways to utilize other funding sources, such as Low-Income Housing Tax Credits and Community Development Block Grants. The AHP is designed to encourage the creation of innovative lending efforts by members as they strive to increase the Nation?s affordable housing stock.

Such leveraging of the guaranteed AHP subsidies has allowed its funding to have an even greater impact.

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How are the grant recipients chosen?

In each funding round, grant applications are scored on a variety of factors intended to ensure that the housing initiatives that will utilize the funding to create the most benefit are given the first priority for funding. Each FHLBank designs its own competitive program, guided by Federal regulatory parameters.

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Are AHP competitive funding rounds oversubscribed?

Yes. Nationally, approximately one out of three applications is funded.

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Do AHP projects reflect local housing needs, and if so, how?

Yes. The AHP is designed to be local in nature. It is administered regionally by each FHLBank, working through their financial institution members and those members? community-based partners. Such community-based partners are the grass roots and the closest to the housing needs of their neighborhoods.

To further ensure that AHP-funded projects serve local housing needs, each FHLBank is advised by a 15-member Affordable Housing Advisory Council for guidance on regional housing and community development issues.

AHP projects serve a wide range of needs. Many are designed for seniors, persons with disabilities, homeless families and individuals, first-time homeowners and others with limited resources.

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I am a non-profit housing developer. May I directly apply for an AHP grant?

Applicants must partner with a member institution and apply to the FHLBank to which that member belongs.

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What is the Community Investment Program and how is it different from the Affordable Housing Program?

Each FHLBank also operates a Community Investment Program (CIP) that offers below-market-rate loans to members for long-term financing for housing and economic development that benefits low- and moderate-income families and neighborhoods. The program is designed to be a catalyst for economic development because it supports projects that create and preserve jobs and helps build infrastructure to support further growth. Unlike the AHP, the Community Investment Program does not provide grants.

Lenders have used the CIP to fund owner-occupied and rental housing, construct roads, bridges, retail stores, sewage treatment plants and provide small business loans. CIP has lent $73 billion toward a variety of projects, resulting in the creation of more than 797,045 housing units and an estimated retention or creation of 260,554 jobs.

Additionally, several of the FHLBanks operate other voluntary programs focused on addressing special needs, such as financial literacy, foreclosure prevention, home rehabilitation and small business lending.

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The Basics

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