FHFA says Federal Home Loan Banks have offered more support to affordable housing efforts

The Federal Home Loan Banks (FHLBanks) saw significant growth in support of affordable housing and community development in 2023, according to a report released Thursday by the Federal Housing Finance Agency (FHFA).

The report detailed FHLBanks’ activity across several programs that include 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 FHFA.

FHFA Director Sandra Thompson lauded the development in a statement accompanying the report.

“The Federal Home Loan Banks assisted close to 65,000 low- or moderate-income households and supported more than 400 targeted economic development projects in 2023 through grants and advances,” she said.

“I am encouraged to see the [FHLBanks] pursue creative and innovative approaches to addressing local housing needs through the voluntary programs they undertake in addition to meeting their obligations under the Affordable Housing Program.”

AHP funds awarded rose by roughly $180 million last year, while “combined advances under the CIP and CICA programs, issued to members to finance affordable housing and economic development projects in lower-income communities, grew by 44%,” FHFA said.

The overall recovery of FHLBank earnings have corresponded with “increased support for affordable housing and community development initiatives,” FHFA said. FHLBanks are required to commit 10% of their net income from the prior year to the AHP, which totaled slightly more than $355 million in 2023.

“Their actual AHP awards in 2023 were approximately $91.7 million — or about 26% — above that amount. FHLBank contributions to the AHP rose for the first time since 2018,” FHFA said.

Still, affordable housing issues are an ongoing challenge. The presidents and board chairs of the 11 FHLBanks — which have been under pressure to allocate more money to affordable housing — sent letters to the U.S. Department of Treasury in August. They contend that raising their contribution thresholds will not address the complexities of the current housing crisis.