The Economic Development Advance (EDA) Program is designed to encourage member financial institutions throughout Kentucky, Ohio, and Tennessee to increase their involvement in economic development and revitalization activities in the communities they serve. The EDA provides a discount off regular advance programs to encourage and assist member financial institutions in providing favorable financing terms for eligible economic development activities.

The following activities qualify for EDA funding: job creation and retention or other economic development projects described as commercial, industrial manufacturing, agricultural, social service, public facility projects and activities, and public or private infrastructure projects (roads, utilities, and sewers). Projects can be qualified on the basis of the activity, geographical, or individual benefits provided.

Small businesses as defined by the SBA as having 500 employees or less.

Commercial, industrial or manufacturing projects may qualify if the annual salaries of 51 percent of jobs created or retained are at or below income target (see income definitions under Geographical Beneficiaries); or, at least 51 percent of families who benefit or are provided services by the activity have incomes at or below the target.

Business or project located in a rural or urban neighborhood with a median income at or below targeted income levels. Rural is defined as being located in rural area with a population of 25,000 or less. In rural areas, eligible incomes may be as high as 115 percent of the Area Median Income (pdf) (AMI). Urban is defined as being located in an urban area with a population of 25,000 or more. In urban areas, eligible incomes may be as high as 100 percent of the AMI. Projects may also qualify if they are located in one of the following designated targeted areas: Empowerment Zones; Enterprise or Champion Communities, Indian, Alaskan Native Village or Native Hawaiian Home Lands; Brownfield Tax Credit Eligible, military base closing area, CAIP (NAFTA-impacted) communities, and Federal or state declared disaster area.

Financing for small or large businesses including fixed assets, plant and equipment and working capital; agricultural lending including farm ownership, operating loans for equipment and crops, animals, etc.; projects/activities for job attraction, creation, or retention; churches; day-care facilities; public facilities such as police stations, public buildings, parks; infrastructure projects including roads, sewers, gas and utilities.

EDAs are priced daily near the FHLBank's cost of funds plus administrative costs. EDAs are available daily and are processed within two business days from receipt of application.

All fixed-rate, mortgage-related advances with terms of one year or greater are eligible. Convertible Fixed Rate and Repo advances are not eligible for the EDA.

EDAs are made available to eligible financial institutions on a secured basis only and are subject to the normal underwriting and collateral policies of the FHLBank. There are no additional limitations on the amount of EDAs that a member may borrow outside of normal credit extension limitations.

Member institutions applying for EDAs should complete and submit an EDA application form (pdf) which describes the eligible activity for which the funds will be used to the Housing & Community Investment Department which assigns the discount. After qualification, the funding becomes a normal credit transaction that requires completion of an Advances Application Agreement submitted to the Credit Department. Funds are disbursed into the member's DDA account with the FHLBank.

Financial institutions receiving EDA funds will be required to identify a contact person and to submit an annual letter outlining the status of the EDA eligible activities.

For information and technical assistance, please contact the Housing and Community Investment Department at (888) 345-2246.