The Affordable Housing Program: A Unique Business Development Opportunity
January 2014 - FHLBank Atlanta’s Affordable Housing Program (AHP) is a unique product offering for shareholders. The AHP not only helps build thriving communities but also serves as a key piece of a shareholder’s business development plan.
The AHP supports affordable housing development, homeownership, and home rehabilitation through two product lines: the AHP Competitive program and AHP Set-aside Products. The AHP Competitive awards up to $500,000 per project to support the development and rehabilitation of affordable rental and ownership housing. Shareholders and their community partners can seek funds through an annual competitive application process. AHP Set-aside Products provide funds for the down payments, closing costs, and rehabilitation costs of low- to moderate-income homebuyers and homeowners. These dollars can be accessed on a first-come, first-served basis throughout the year until the annual funding allocation is exhausted.
The Bank allocates 10 percent of its annual net income to the AHP. This funding represents a “community dividend” that helps stimulate job creation, tax base growth, and local economic development. Beyond these benefits to low- to moderate-income households and the community at large, there are many additional compelling business reasons for the Bank’s shareholders to participate in the AHP Competitive and Set-aside programs.
Reach new customer markets. AHP Set-aside Products can help institutions reach valuable retail markets, including first-time homebuyers, military households, law enforcement officers, health care workers, educators, and others.
Build relationships with developers, contractors, nonprofits, government entities involved in affordable housing. Relationships forged through AHP can lead to other lending and deposit business opportunities.
Originate new mortgages and loans. Offering access to equity funding from FHLBank Atlanta is a significant competitive advantage and helps attract borrowers for both residential mortgages and other loans for housing development.
Build profile and reputation in the community. Participating in community-building projects helps build positive reputation and mind-share with local customers.
Reduce loan-to-value. AHP serves as an equity infusion into an affordable housing deal or home purchase, reducing the loan-to-value of the transaction.
Achieve community lending goals. Participation in AHP products can qualify for Community Reinvestment Act (CRA) credit. Simply applying for an AHP Competitive award is a CRA-eligible activity.
Program requirements for all AHP products are detailed in the AHP Implementation Plan. Additional information, including webinar recordings, are available on the Bank’s website.
For more information on how your institution can use AHP to achieve its business development and CRA goals, call the Community Investment Services department at 1.800.536.9650, option 3, option 2, option 0.
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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.