The Council of Federal Home Loan Banks (FHLBanks) lauded this week’s release of a report from the Federal Housing Finance Agency (FHFA), which highlighted the banks’ growth in support of affordable housing and community development efforts in 2023.
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 report.
The report showed that the FHLBanks delivered $446.9 million in AHP funds, including $35.2 million in voluntary AHP spending. It also indicated that the banks gave $134.6 million in additional voluntary grant funding — good for a total of more than $581 million in funding for affordable housing and community development projects last year.
Ryan Donovan, president and CEO of the Council of FHLBanks, expressed appreciation for the FHFA report and said it demonstrates the banks’ commitment to expanding the availability of affordable housing.
“Over the last two years the FHLBanks have taken tremendous steps to help address the housing supply and affordability issues plaguing the country,” Donovan said. “This report clearly shows the positive impact and responsiveness of the 11 FHLBanks to the needs of their members and the communities they serve.”
Donovan added that the council is “grateful to FHFA for publishing the report,” and looks forward to “continuing to work with the agency, financial regulators, and other stakeholders to develop innovative and workable solutions to the nation’s housing finance needs.”
The overall recovery of FHLBank earnings corresponded with “increased support for affordable housing and community development initiatives,” FHFA said in the report. FHLBanks are required to commit 10% of their net income from the prior year to the AHP in response to prior FHFA feedback.
“[T]he FHLBanks voluntarily agreed in early 2023 to contribute 15% of the prior year’s net earnings to affordable housing and community development, a 50% increase from the statutorily required 10%,” the council noted in the response letter.
“Based on 2022 net earnings, the FHLBank System was assessed $355.2 million for AHP in 2023, as noted in FHFA’s report. The $581 million in AHP and voluntary contributions in 2023 represent a total of more than 16 percent, or more than 60% above the statutory minimum.”
But affordable housing issues remain a prominent fixture plaguing much of the country. 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, arguing that raising their contribution thresholds will not fully address the complexities of the current situation.
