Affordable Housing Program

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The Affordable Housing Program (AHP) is our largest and most impactful initiative – nearly $675 million awarded since 1990, approximately 86,000 affordable housing units funded. AHP can be used to fund both ownership and rental projects. Grants are awarded on a competitive basis in one offering each year. Applications are typically accepted between May and August, with awards in November.

The following is only a brief summary of the AHP. Complete program details, including guidelines, limits, definitions, and requirements are provided in the current AHP Implementation Plan and related documents which are available in the Program Documents and Forms section of the Community Investment section of this website.

Source of AHP Funds

Each of the Federal Home Loan Banks sets aside 10 percent of net earnings annually to be used as subsidies to finance development of affordable housing. The funds are made available only through financial institutions that are members of the Federal Home Loan Banks. Non-profits, local governments, community development corporations, for-profits, and other organizations (known as sponsors), seeking AHP funding must submit an application through a financial institution that is a member of a Federal Home Loan Bank.

Use of Funds

AHP funds can be used to assist with the funding of new construction, acquisition, rehabilitation or any combination thereof for ownership and rental housing serving very low-, low- and moderate-income households. Very low-income households are those with annual incomes at or below 50 percent of area median income. Low- and moderate-income households are those with annual incomes at or below 80 percent of area median income. The area median income guidelines are defined annually by the U.S. Department of Housing and Urban Development (HUD).

Availability of Funds

AHP funds are made available through a single competitive offering conducted annually. Interested members and sponsors have until the closing date for each offering to submit an application. Applications must be completed and submitted online to the FHLB by 5:00 P.M., Eastern Standard Time, August 8, 2018, for the FHLB’s 2018 offering.

Application Process

A sponsor seeking funds for a housing development project should identify a member of the FHLB and work directly with that institution to develop an application that is eligible for funding. A listing of members may be obtained in the Members Directory.

The FHLB will review, analyze, and score the application, taking into consideration:

  • Threshold Requirements
  • Feasibility Requirements
  • Project Scoring Criteria

Each of these requirements is explained in detail in the current AHP Implementation Plan.

Following the submission deadline, applications will be reviewed to determine whether they meet all threshold and feasibility requirements. Applications meeting threshold and feasibility requirements will be scored. Applications are then ranked by score and recommended to the FHLB Board for funding, from highest to lowest score, until all available funds are exhausted. Funding awards will be announced approximately 90 days after the submission deadline.

Subsidy Limits

The following subsidy limits apply to all members and projects:

  • In 2018, a member is limited to $5,000,000 in AHP subsidy annually. If a member had an otherwise eligible project whose AHP subsidy requested would cause the member to exceed the limit if the project were funded, the project would not be funded.
  • AHP subsidy is limited to grants up to $50,000 per unit, $15,000 per unit for owner-occupied rehab projects, and $15,000 per bed for shelters, group homes, or special purpose housing projects.
  • AHP subsidy cannot exceed the lesser of $1,000,000 per project or 75 percent of total project costs.

Thresholds Requirements

The application must meet the following threshold requirements in order to be eligible for funding. The project must:

  • Provide either ownership or rental housing (including shelters);
  • Meet the feasibility guidelines specific for the project type as published in the AHP Feasibility Guidelines provided in Attachment F of the current AHP Implementation Plan;
  • Demonstrate a need for the AHP subsidy;
  • Have costs that are reasonable and customary;
  • Satisfy timing requirements for subsidy use, including full utilization of the subsidy within 48 months;
  • At least 20 percent of a rental project’s units must be set-aside for households with annual incomes at or below 50 percent of the HUD median income for the area in which the project is located;
  • All of an ownership project’s units must be set-aside for households with annual incomes at or below 80 percent of the HUD median income for the area in which the project is located;
  • Be subject to a five-year (ownership projects) or 15-year (rental projects) retention period;
  • The project sponsor must demonstrate a record of accomplishment of conceptualizing, financing, developing, completing, and operating projects of similar size/type. If the sponsor has received prior AHP awards, the sponsor must have demonstrated a capacity to comply with all aspects of the application, reporting, and monitoring requirements of the AHP regulation and FHLB policies;
  • The member submitting the application must originate and close the first (permanent) mortgage in projects with permanent financing. Exceptions to this requirement may be found in the AHP Implementation Plan; and,
  • Comply with all applicable federal and state laws on fair housing and housing accessibility, including, but not limited to, the Fair Housing Act and Amendments, the Architectural Barriers Act, the Rehabilitation Act, the Americans with Disabilities Act, and the Equal Credit Opportunities Act.

Scoring Criteria

Applications, which meet the eligibility requirements, will be scored using a 100-point scoring system, with points awarded based on satisfaction of nine scoring criteria. The Scoring Criteria are provided in Attachment A of the current AHP Implementation Plan.

Recapture

Once AHP funds have been disbursed to the member, if the funds are misused or the project falls out of compliance and the noncompliance is not cured within a reasonable amount of time, the FHLB is required by federal regulation to recapture the funds. Generally, repayment will be required from the project sponsor. In some instances, homeowners may be required to repay a pro rata amount of the AHP grant if the home financed with AHP subsidy is sold, refinanced, or otherwise conveyed during the five-year retention period.

Reporting and Monitoring

Participating members should designate an officer to serve as the AHP contact with the FHLB and report on the status of their projects. sponsors assist the member by working with this designated contact person.

Sponsors and project Owners are required to report, semi-annually, to the member on the status of projects during their development stage. The member is required to provide these semi-annual reports on the status of their projects to the FHLB. Once the project is complete, semi-annual progress reports are no longer required. Thereafter, ownership projects require only a one-time income eligibility certification and documentation verifying appropriate use of the subsidy and fulfillment of all other occupancy and scoring commitments made in the approved AHP application confirmed at time of disbursement and project closeout. Rental projects require documentation verifying appropriate use of the subsidy and fulfillment of the income targeting, occupancy, and scoring commitments made in the approved AHP application confirmed at time of disbursement and initial monitoring. The FHLB will conduct long-term monitoring of Rental projects for the duration of the 15-year retention period to ensure that subsidy benefits remain available to low-income households for the entire retention period. Rental project Owners must submit reports and certifications annually to the FHLB on the project’s status and continued compliance with income targeting and rent affordability requirements.

Disbursement of Funds

Generally, AHP funds are disbursed only after project completion. However, for ownership projects, funds can be disbursed at the completion (typically at closing) of each unit. In some instances, rental projects may be eligible for an early disbursement of up to 25 percent of the grant funds awarded. For additional information, reference the AHP Early Disbursement Manual.

Instruction manuals and forms for requesting a disbursement are available in the Program Documents and Forms section of the Community Investment section of this website. There are separate request forms for Ownership, Habitat, and Owner-Occupied Rehab projects, and for Rental and Tax Credit projects.

At least one person from the sponsor organization is required to participate in project specific Disbursement Training through Webinars or Workshops offered by the FHLB annually. Disbursement Training Webinars for each project type are available for viewing in the Program Documents and Forms section of the Community Investment section of this website.

Information and Technical Assistance

Sponsors and members should attend an AHP training workshop held each year in each of the Fifth District states and participate in the various AHP webinars offered by the FHLB. Dates for AHP workshops and webinars will be posted to the FHLB website at the start of the second quarter of each year. The FHLB is a source of technical assistance in developing projects and can help connect sponsors to members, if requested.

For more information or assistance, please contact Housing & Community Investment Department toll-free at (888) 345-2246 or by email at AHPApplication@fhlbcin.com.