Affordable Housing Program Implementation Plan Summary of Changes and Availability of Other FHLB Programs

December 30, 2022

 

Affordable Housing Program Implementation Plan Summary of Changes

The following lists material changes for the 2023 Affordable Housing Program (AHP) General Fund and Set-aside Program. Please see a complete copy of the 2023 AHP Implementation Plan for all changes and detailed program requirements. FHLB will also cover these changes in the AHP trainings to be held in 2023.

Main Body of Implementation Plan

  • Increased the maximum AHP subsidy per project that can be requested from $400,000 to $800,000
  • Increased the maximum AHP subsidy per Member from $800,000 to $4,000,000
  • Increased the maximum amount of subsidy per unit that a project may receive from $50,000 to $55,000 and the amount of subsidy per bed or owner-occupied rehab unit from $15,000 to $16,000
  • Increased the maximum interest rate on first mortgages to 11.75 percent
  • Applications to the FHLB’s AHP General Fund will be accepted from May 31 through July 21

Scoring Criteria

  • Member Financial Participation – Increased the minimum cash contribution necessary to receive one point for the Member’s payment of development costs from $750 to $2,000
  • Project Sponsorship – Increased the minimum cash contribution necessary to receive two points for the Sponsor’s payment of development costs from $500 to $2,000  
  • Empowerment – Streamlined the requirements and activities required for points within this scoring category

Compliance Requirements

  • Removed the suggestion that FHLB will collect a project’s management agreement as part of its disbursement process
  • Reduced the percentage of tenant files that FHLB will sample to ten percent of the project’s units for initial and long-term compliance audits

Definitions

  • Added new definitions for “Capital improvements” and “Diverse”
  • Removed the suggestion that AHP funds cannot pay for non-residential space from the definition of “Non-residential space”
  • Modified the definition of “Substantial rehab” to reference the increased minimums to achieve points in the Community Stability scoring category

Project Feasibility Guidelines

  • Changed the total project cost per unit feasibility guideline to a total hard cost per square foot guideline based on a location-specific construction cost index that FHLB will publish
  • Increased a number of the FHLB’s Feasibility Guidelines to accommodate the unprecedented impact of inflation on development and operating costs
  • Set one percent of loan principal as the maximum amount for points and fees on permanent, construction and bridge loans
  • Set maximum interest rates for permanent multi-family loans, construction loans and bridge loans to be based on similar FHLB Advance products plus an adjustment factor specific to the loan type
  • Established minimum operating cost per unit guidelines as $3,000 for non-permanent supportive housing projects and as $3,600 for permanent supportive housing projects
  • Established a minimum operating cost per bed guideline of $2,500
  • Established minimum annual replacement reserve guidelines as $250 per unit per year for traditional and permanent supportive housing projects
  • Established minimum annual replacement reserve guidelines as $150 per unit per year for “Shelters,” “Group homes” and “Special purpose housing”

Requirements for the Welcome Home Program

  • Increased the per-household maximums from $5,000 to $10,000 ($7,500 to $15,000 for honorably discharged veterans, reservists, United States National Guard and active military homebuyers or surviving spouses)
  • Increased the maximum amount of subsidy per Member from $50,000 to $150,000
  • Beginning in 2023, the FHLB will have two Welcome Home Program offerings beginning February 6 and July 6


Other Housing and Community Investment Programs

The FHLB is expected to continue to offer the following programs in 2023. For complete information on any of these programs, please see the Housing Programs section of the FHLB's website.

Disaster Reconstruction Program

The Disaster Reconstruction Program provides grants up to $20,000 for homeowners and renters who suffered a loss due to a federal- or state-declared disaster. This program is currently open.

Carol M. Peterson Housing Fund

The Carol M. Peterson Housing Fund provides grants up to $7,500 for accessibility rehabilitation and emergency repairs for elderly households and those with special needs. FHLB expects to announce the opening date for this program at a later date.

Community Investment Program

The Community Investment Program offers discounted advances to Members to finance the purchase, construction, or rehabilitation of housing and economic development projects in areas with qualifying income or demographic factors. This program is currently open.

Economic Development Program

The Economic Development Program offers discounted advances to finance commercial, industrial, agricultural, small business, public facilities, daily care, and infrastructure projects in areas with qualifying income or demographic measures. This program is currently open.

Zero Interest Fund

The Zero Interest Fund is a revolving $2 million fund offering loans of up to $100,000 to finance upfront infrastructure and acquisition costs in an effort to promote housing and economic development. This program is currently open.

­­­­­Please contact the Housing and Community Investment Department at 888-345-2246 with any questions.