The Federal Housing Finance Agency (FHFA) this week issued a Final Rule amending its regulations regarding the Federal Home Loan Banks' (FHLBanks) Affordable Housing Program (AHP). FHFA said that the amended ruling was intended to provide FHLBanks with additional flexibility when it comes to how they choose to work alongside their Advisory Councils in order “to allocate their AHP funds and to design their project selection scoring systems to address affordable housing needs in their districts.”
FHFA stated that these latest amendments are also intended to make the AHP easier to use, to reduce “regulatory monitoring requirements that are redundant with other federal programs.” The rule authorizes FHLBanks to set up “competitive funds” designed to target specific affordable housing needs in their districts.
According to FHFA’s statement, the Final Rule also “removes the requirement for retention agreements for owner-occupied units where the AHP subsidy is used solely for rehabilitation and reduces administrative and financial burdens on FHLBanks, members, and households related to calculating and obtaining household subsidy repayments.”
“We appreciate the thoughtful comments we received on the proposed rule and implemented many of those suggestions," said FHFA Director Melvin L. Watt. “We believe that those suggestions incorporated into the final rule will help to further strengthen this important program, which has supported more than one million units of housing affordable to low-income homebuyers and renters since its inception in 1990."
FHLBanks are required to implement all changes introduced by the Final Rule no later than by January 1, 2021. However, changes related to owner-occupied retention agreement requirements must be implemented by January 1, 2020.
For anyone interested in learning more about the new FHFA Final Rule, the Agency will be hosting a webinar at 2 p.m. EST on Thursday, December 13. You can submit questions for the webinar in advance by emailing them to [email protected], and you can register for the FHLBanks Affordable Housing Program Final Rule Webinar by clicking here.
The FHFA statement noted that FHLBanks’ net income generated $384 million in AHP funding in 2017.