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The Federal Home Loan Bank (FHLBank) system announced that it expects to provide approximately $1 billion in support for affordable housing and community development initiatives this year.

This firmly establishes the system as one of the largest sources of private funding for affordable housing in the United States, according to officials.

As part of their mission to provide liquidity and support affordable housing and community development, each FHLBank is required by law to contribute a minimum of 10% of income to its Affordable Housing Program (AHP).

Last year, the 11 FHLBanks voluntarily agreed to contribute 15% of income to affordable housing and community development initiatives on a go-forward basis. Each FHLBank is either already making additional voluntary contributions or is in the process of increasing its voluntary contribution levels.

The FHLBank system recently reported a combined net income of over $6.6 billion for 2023 with a combined AHP assessment of $752 million.

The AHP program provides important funding for the purchase, construction, or rehabilitation of affordable housing.

“We are very proud of the positive impact the FHLBanks have on communities large and small across the country,” said Ryan Donovan, president and CEO of the Council of Federal Home Loan Banks, in a statement. “… We are putting our money to work in so many important ways, providing resources for veterans housing, homeless shelters, low- to middle-income borrowers, Native American communities, and other initiatives. There was at least one news item nearly every business day during the first quarter highlighting the impact that FHLBanks and their members are having in their communities, and we expect this to continue.”

Donovan also noted that the ability of the FHLBanks to have such a strong impact on affordable housing and community development is a direct outgrowth of their primary liquidity mission.

FHLBank grants are made available through member financial institutions, and programs are specifically targeted to meet the affordable housing and community development needs within each FHLBank district. Grants range from several thousand dollars to help individuals afford a down payment on a home to more than $1 million to support developers of affordable housing projects. They also support small businesses, local schools, homeless shelters, local libraries and historical societies, and various other entities, providing a fundamental safety net to communities across the country.