July 2015 – 2015 marks the 25thanniversary of the creation of the Federal Home Loan Bank System’s Affordable Housing Program (AHP). Congress established the AHP in 1989, and the Federal Home Loan Banks have distributed more than $4.4 billion in AHP funds since grant awards began in 1990. By contributing 10 percent of annual net income to the AHP each year and partnering with shareholder institutions to deliver these funds to communities, the FHLBanks have helped create or preserve more than 600,000 affordable housing units nationally.
FHLBank Atlanta’s AHP serves the economic and housing needs of communities by providing shareholders with flexible options for community development initiatives. The Bank delivers AHP funds in two ways: a competitive program (AHP Competitive) for homeownership, rental, and supportive housing and a set-aside program (AHP Set-aside) for ownership and certain rehabilitation projects.
Since 1990, FHLBank Atlanta has awarded more than $823 million in AHP subsidies between its homeownership, rental, supportive housing, and rehabilitation products. These funds facilitated more than $11 billion of housing development in communities across the Southeast – a 1:13 ratio of AHP funds to total development financing – and assisted more than 128,000 households.
Evolution of AHP
In the last 25 years, FHLBank Atlanta’s AHP has evolved from a single program to a diverse offering of rental and homeownership products and services that help shareholders achieve community lending compliance and business development goals. Beginning in 2011, FHLBank Atlanta began a series of expansions of the First-time Homebuyer Product to help shareholders reach untapped customer markets and best respond to the emerging credit needs in their communities. Today these products – collectively known as AHP Set-aside Products – support first-time homebuyers, military veterans, homebuyers purchasing foreclosed homes, and homebuyers employed in targeted professions.
Supporting Military Communities
One of the most significant expansions of AHP was the introduction of products and services for veterans and military households. The Veterans Products and services enable shareholders to provide military veterans and their surviving spouses with down-payment and home renovation assistance, funds for rental and supportive housing, and financial literacy services, which help them achieve lasting financial wellness.
Leveraging the Veterans Products, shareholders are able to reach military families, grow their lending business, achieve compliance goals, and build their profile in their communities. Under the Bank’s veteran’s initiative, $35 million of the Bank’s AHP grants have helped facilitate approximately $260 million in real estate development consisting of 2,545 units of ownership and rental housing for veterans.
Philip Galanti is one of the many veterans who has benefited from the Veterans Products. “The veterans grant program is great,” Galanti says. “I used it to have a new roof, a new air conditioner, and a walk-in shower installed in my home. I could not be happier with the renovations.”
The Bank was also recognized with the Mortgage Bankers Association’s (MBA) 2014 Hall of Honor Award for its work in delivering home purchase assistance, home rehabilitation funding, rental housing funding, and financial literacy, via its shareholders, to support veterans across the FHLBank Atlanta footprint.
New Homeownership Initiatives
The Bank continued its expansion of AHP Set-aside Products in 2014 by launching the Community Partners Product. Community Partners provides up to $7,500 in home purchase assistance to current or retired law enforcement officers, educators, health care workers, firefighters, and other first responders. During its first year, the product reached more than 140 households and leveraged approximately $20 million in first mortgage financing through the Bank’s shareholders.
“The Community Partners Product gives us a wonderful opportunity to offer some well-deserving members of our community help with buying a home,” says Jerry Mabry, President and CEO of Village Bank Mortgage Corporation.
2014 also marked the unveiling of the Bank’s Structured Partnership Product, with partnerships in Columbia, S.C. and Savannah, Ga., and with the Virginia Housing Development Authority. The Structured Partnership Product (SPP) is a unique arrangement where the Bank engages in a structured, short-term agreement with a local government or housing finance agency (HFA) to provide funds exclusively to shareholders and their customers. The SPP is designed to help shareholders achieve their lending business objectives, connect with local business drivers, and build stronger partnerships throughout their communities. In 2015, the Bank expanded the SPP housing initiative to Palm Beach County, Fla. and Atlanta BeltLine Inc. and renewed its partnership with the City of Savannah.
Linking Compliance and Business Development
In addition to growing its AHP product portfolio, the Bank has introduced new service offerings that help shareholders better link community lending compliance and business development objectives. In 2013, the Bank launched its Community Reinvestment Act (CRA) business development forums, which feature insights from regulators, testimonials from shareholders, and guidance on using Bank products to achieve CRA goals. The Bank further expanded its CRA business development offerings in 2014 to include personalized one-on-one CRA consultations and CRA success roadmaps for shareholders that ultimately help them to create a successful CRA strategy.b
David Coxon, President and CEO of Georgia Primary Bank said of the Bank’s CRA offerings, “FHLBank Atlanta has created a strategic alliance with members, bringing tremendous value for meeting the CRA commitment we all share.”
Through the AHP, the Bank is driving economic growth in communities, helping shareholders reach their lending goals, and enabling families to achieve their dreams of homeownership and have safe, decent places to live. We are proud of the work we have accomplished in partnership with shareholders over the past 25 years and look forward to another 25.
Annually the Bank captures the accomplishments from the year in the Affordable Housing Advisory Council annual report. The 2014 Report is available on the Bank's website at www.fhlbatl.com.
The Federal Home Loan Bank of Atlanta is not a registered investment advisor. Nothing herein is an offer to sell or a solicitation of an offer to buy any securities or derivative products. You should consult your own legal, financial, and accounting advisors before entering into any transaction.