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Programs
The Federal Home Loan Bank of Seattle’s community lending programs include the Affordable Housing Program, Community Investment Program, Challenge Fund and Home$tart Savings Program. Through targeted grants, reduced-rate advances or downpayment assistance, each of these programs uniquely helps lenders support their communities’ demand for funding and technical assistance to build or improve housing and commercial developments serving people with modest incomes.
The Affordable Housing Program
Through the Affordable Housing Program (AHP), the Federal Home Loan Bank of Seattle provides grants to our financial institution customers to help them fund specific affordable housing developments in their communities. Lenders apply for these grants on behalf of nonprofit or for-profit housing developers or governments which use the funds to purchase, construct or rehabilitate housing for families or individuals earning up to 80 percent of their area’s annual median income.
The Seattle Bank funds the AHP with ten percent of its annual profits. We have awarded $59.1 million in grants through the program since 1990. These contributions have benefited 15,000 families or individuals, including first-time homebuyers, homeless individuals, the physically or developmentally disabled, and the elderly. The Seattle Bank provided $10.0 million in AHP grants in 1998 and will award another $12.2 million through the program in 1999.
The AHP was created in 1989 as part of the Financial Institution Reform, Recovery and Enforcement Act (FIRREA). Each of the 12 Federal Home Loan Banks administers its own AHP.
AHP Regional Priority
Each year, the Seattle Bank’s Affordable Housing Advisory Council recommends to the Board of Directors priorities for the AHP. Projects that meet designated criteria are given additional points in the application scoring process, helping them succeed in the grant competition. The 1998 priorities were housing in rural communities and housing for people with special needs. Projects in rural areas that also served Native peoples received bonus points. In 1999, the priorties are housing for families (two or more bedrooms) and housing in rural areas. Projects that also support Native peoples will again receive extra points.
Download Affordable Housing Program Application
The Community Investment Program (CIP) provides reduced-rate advances to help financial institutions fund affordable housing and economic development programs that benefit families with lower to moderate incomes. Federal Home Loan Bank of Seattle customers can obtain CIP funding at our cost of funds, usually 15-25 basis points less than regularly priced advances. The favorable pricing and the availability of funds in terms from one to 30 years make the CIP an excellent funding source for lenders originating long-term community investment loans.
CIP advances can be used to fund:
- homeownership or rental housing
- neighborhood revitalization or preservation
- small business loans
- commercial development
Financial institutions have used the CIP to fund:
- multifamily housing
- first-time homebuyer programs
- retail stores
- medical centers
- community services
Housing funded through the CIP may benefit families earning up to 115 percent of their communities’ median income. Business or commercial uses must benefit families earning up to 80 percent of the median. The application process for a CIP advance is simple and the brief application is typically approved within two days. Funding can be customized to meet a project ’s specific requirements.
Since 1990, 26,365 households in the region have benefited from CIP funding of more than $1.3 billion. Financial institutions have dramatically increased their utilization of CIP advances to fund economic and community development projects, particularly in rural areas where resources are limited. Currently, more than $90 million in CIP advances are helping preserve jobs, build infrastructure and bring new promise to communities.
Download Community Investment Program Advance Application
Communities frequently require assistance in the predevelopment stages of an affordable housing project. The Seattle Bank’s Challenge Fund provides small grants for necessary expenses that help determine a project’s feasibility and assist in getting it started.
The Challenge Fund is a revolving fund that extends recoverable grants of up to $10,000 to financial institutions in support of specific housing proposals. The lender repays the grant if and when a project succeeds. Grants are matched by lenders with reduced or forgiven financing fees, in-kind services or cash.
Lenders have secured Challenge Fund grants to:
- pay for architectural and legal fees associated with the construction of apartments for migrant farmworkers
- fund structural analysis and rehabilitation estimates on vacant buildings being considered for affordable housing
- pay a professional grantwriter to secure funding for an affordable housing development
The Seattle Bank provides $100,000 annually for the Challenge Fund; to date, these funds have supported 98 successful developments benefiting 3,262 families.
Download Challenge Fund Application
In 1995, the Federal Home Loan Bank of Seattle initiated a program to make homeownership affordable to families with modest incomes. Since the difficulty of saving for a downpayment is a significant barrier to homeownership, the Home$tart Savings Program provides an incentive for motivated families to save.
Through Home$tart, the Seattle Bank provides grants to its financial institution customers who use them to match prospective first-time homebuyers’ savings with $3 for every $1 saved, up to $5,000 per family. Homebuyers must establish a savings account with the lender, complete a homebuyer education course and save money for at least six months. To qualify for Home$tart, the family or individual must be a first-time homebuyer and earn no more than 80 percent of the median income in their community. Home$tart is also available to families receiving public housing assistance who are enrolled in a Family Self-Sufficiency Program through their local housing authority.
Currently, 78 Home$tart lenders expect to enroll 929 homebuyers in the program. The Seattle Bank has committed a total of $4.1 million of AHP funds for Home$tart. Lenders can apply for Home$tart funds once a year on March 31. Funding is allocated on a pro-rata basis to all lenders who apply.
Download Home$tart Savings Program Application