Community Investment Program

Resources for Affordable Housing

Federal Home Loan Bank Programs

The Federal Home Loan Bank system offers two programs, the Affordable Housing Program (AHP) and the Community Investment Program (CIP), through its financial institution members, that can assist in the financing of affordable housing. Both of these programs were authorized by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and the subsidies made available have been instrumental in the creation of thousands of units of affordable housing.

Community Investment Program

The purpose of the Community Investment Program (CIP) is to provide loan funds for the following purposes:

to finance home purchases by families with incomes at or below 115 percent of the area median,
to finance the purchase or rehabilitation of rental housing for families with incomes at or below 115 percent of the area median,
to finance commercial and economic development activities that benefit low- and moderate-income families (those at or below 80 percent of median income) or activities that are located in low- and moderate-income neighborhoods,
projects that include a combination of these activities.

The Community Investment Program, which is available on a continuous basis through FHLB member institutions, provides for flexible loan structuring, with rates 15 to 20 basis points lower than regular advance rates. Loan terms may be up to and including 20 years.

Through 1995, more than $12 billion in loans had been made available through the CIP, which financed over 273,000 housing units. More than $400 million in loans had been made for economic development projects.

CIP-Funded Projects

Projects that have received CIP-funded financing include the following:

Neighborhood Shopping Center in Charleston, South Carolina
First Federal Savings and Loan of Charleston used CIP advances to fund a commercial loan to renovate a neighborhood shopping center in a low-income area. The center provides much needed services to the neighborhood which includes a public housing complex.
Multifamily Rehabilitation in Lakeland, Florida
First Federal of Lake County used CIP advances to refinance an existing loan and rehabilitate a 6-unit development in a low-income minority neighborhood.
Plant Acquisition in Hall County, Georgia
Trust Company Bank of North Georgia used CIP advances to extend a commercial loan for the purchase of a new plant. The project will create 15 to 20 new jobs for low- and moderate-income persons.
Multifamily Construction in Bessemer City, North Carolina
East Coast Federal Savings Bank used CIP advances, in conjunction with an AHP advance, to fund the construction of 34 rental units for very low-income households. The CIP funds will provide the first mortgage and the AHP funds will be used for the second mortgage. The project also has a third mortgage from the North Carolina Housing Trust Fund and equity from Low-Income Housing Tax Credits.
Water Works Project in Lonaconing, Maryland
First United National Bank and Trust used CIP advances to provide interim financing for a water project, which will benefit the towns of Lonaconing, Barton and Midland and generate low-income jobs in this rural area. Long-term funding will be provided by the Farmers Home Administration.
First Time Homebuyer Program in Florence, Alabama
First Federal Savings and Loan of Florence used CIP advances to fund mortgages for the purchase of moderately priced homes. No points are charged and no mortgage insurance is required for these borrowers.

This information was prepared and provided by the Office of Policy of the Federal Housing Finance Board and the Federal Home Loan Bank of Atlanta.

For additional information on the Community Investment Program, contact a Federal Home Loan Bank Community Investment Officer.

Copyright 1997 - 1998 - 1999 - 2000
Affordable Housing and HOME
National Association of Housing and Redevelopment Officials (NAHRO)
630 Eye Street, NW
Washington, DC 20001-3736
Telephone: (202) 289-3500
Fax: (202) 289-4949