The Federal Housing Finance Agency today finalized a proposal making changes to the Federal Home Loan Bank Affordable Housing Program. The final rule is intended to provide FHLBs with greater flexibility in how they can allocate their AHP contributions to the various programs based on the specific housing needs of their districts. The FHLBs must implement all changes by Jan. 1, 2021.
The final rule authorizes the FHLBs to establish target funds to address specific affordable housing needs within their districts that are unmet or have been proven difficult to address through the FHLBs’ general fund. FHLBs may authorize 40 percent of their total AHP funds to target funds. Additionally, in response to comments from industry stakeholders, including the American Bankers Association, the final rule omits the outcome-based framework for project selection included in the original proposal and instead amends the exiting scoring framework to provide the FHLBs with additional flexibility to design their own systems.
ABA — which raised a number of concerns about the original proposal — is in the process of thoroughly reviewing the final rule to determine the extent to which its concerns were addressed. Meanwhile, FHFA will host a webinar on Dec. 13 at 2 p.m. EST to provide an overview of the rule and answer questions.