The Federal Housing Finance Agency has announced proposed changes to its regulation on the Federal Home Loan Banks' Affordable Housing Program (AHP) and is seeking comments on the changes.
Under the proposed amendments, FHLBs would have more authority to allocate AHP funds, including authority to establish special competitive funds that target specific affordable housing needs in their districts. Additionally, the changes would allow FHLBs to design and implement their own project selection scoring criteria, subject to certain outcome requirements.
Other proposed changes include the removal of the requirement for retention agreements for owner-occupied units and further alignment of project monitoring requirements with those of other federal-government funding programs. The amendments would also clarify the provisions on remediating AHP noncompliance as well as certain operational requirements.
Under the Federal Home Loan Bank Act, each FHLB must establish an AHP to which it must contribute 10% of its earnings. AHP funds are used to finance owner-occupied housing for low- or moderate-income households and rental housing where at least 20% of the units are affordable for and occupied by very-low-income households.
The FHFA said interested parties should submit comments on the proposed rule within 60 days of publication in the Federal Register.
"The FHLBanks' Affordable Housing Program is a continuing success story,” FHFA Director Melvin Watt said. “Since it began in 1990, the program has awarded funds to support over one million units of housing affordable to low-income homebuyers and renters. We look forward to stakeholder comments that will enable us to continue to build on the AHP's success."