Removing Barriers Blog

FHFA Releases its Final Rule Amending the Affordable Housing Program for Federal Home Loan Banks
Posted November 28, 2018 by CUNA Advocacy

Today, the Federal Housing Finance Agency (FHFA) released its final rule amending requirements of the Affordable Housing Program operated by the Federal Home Loan Banks (FHLBanks). Changes to the program include:

     -ending the requirement for retention agreements of owner- occupied units where the program subsidy is used solely for rehabilitation;

     -granting the Banks additional authority to allocate their AHP funds;

     -authorizing the Banks to establish separate competitive funds that target specific affordable housing needs in their districts;

      -providing the Banks additional flexibility in designing their project selection scoring systems to address affordable housing needs in their districts;

     -reducing and streamlining certain administrative requirements for FHLBanks operating the program; and

     -establishing a new calculation of household subsidy repayment amount to prioritize the return of the household’s investment in the housing to the household;

Excluding changes to the owner-occupied retention rules, the final regulation does not require FHLBanks to follow the proposed amendments until January 1, 2021 with one exception: compliance with the changed owner-occupied retention requirements must occur by January 1, 2020.

The final rule adopts more flexibility for FHLBanks to design and administer their AHP programs then the outcome-based approach previously included in the proposed rule. CUNA’s comment on the proposal had expressed concern that an outcome-based approach “overall could prove punitive, and ultimately inhibit allocation to the set-aside programs.”