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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 62 November 2024 J O U R N A L equitable housing market. "Finding and creating opportunities that promote a more affordable and fair housing market while maintaining safety and soundness is at the core of our mission, so we are happy to extend the reach of our Expanded Housing Choice initiative to all eligible jurisdic- tions and properties. We also thank our Delegated Underwriting and Servicing (DUS) lenders for partnering with us to bring this initiative to life for those who will benefit from it," said Michele Evans, EVP and Head of Multifamily for Fannie Mae. "Many Housing Choice Voucher holders are from historically underserved communities and bringing a program to the greater market that enables increased access to sustainable housing for renters while producing benefits for property owners is a prime example of Fannie Mae's innovation at work." Previously limited to eligible prop- erties in just North Carolina and Texas, EHC is now available to borrowers in all U.S. jurisdictions without Source of Income protections provided their property is not already legally required to accept HCVs and that at least 40% of units are affordable at or below HUD Fair Market Rents or Small Area Fair Market Rents. The EHC initiative also has been enhanced to address customer and stake- holder feedback, including an increased eligibility threshold, which aims to stimulate a more sustainable program; a more streamlined data collection process; and more transparency around inclusive renter screening requirements. FHLBANKS ASSIST 65,000 HOUSEHOLDS THROUGH KEY PROGRAMS T he Federal Home Loan Banks' (FHLBanks) affordable housing and community development support grew significantly last year, as earnings improvement across the FHLBank System corresponded with greater commitments to lower-income communities, according to a new Fed- eral Housing Finance Agency (FHFA) report, "2023 FHLBank Targeted Mission Activities Report." The Report highlights the FHL- Banks' performance and activities under the Affordable Housing Program (AHP), the Community Investment Program (CIP), the Community Investment Cash Advance Program (CICA), and addition- al voluntary targeted mission-activity programs. "2023 FHLBank Targeted Mis- sion Activities Report" also measures the growth in FHLBank membership and advances among nondepository Community Development Financial Institutions (CDFI), as well as the FHLBanks' progress in meeting the affordable housing goals for mortgage purchases under the Acquired Member Assets (AMA) program. The Federal Home Loan Bank Act (Bank Act) requires each FHLBank to establish an AHP. Under the program, members may apply to the FHLBank for AHP funds, which are provided to approved projects and households for the purchase, construction, or rehabili- tation of owner-occupied and affordable rental housing. AHP funds may be in the form of grants or reduced interest rates on advances (subsidized advances) from an FHLBank to the member. A family's household income must be at or below 80% of the area median income (AMI) to be eligible for funding through AHP's owner-occupied housing pro- grams. For AHP-assisted rental housing to be eligible for funding, at least 20% of the project's units must be affordable for and occupied by households with incomes at or below 50% of the AMI. "The Federal Home Loan Banks assisted close to 65,000 low- or moder- ate-income households and supported more than 400 targeted economic development projects in 2023 through grants and advances," FHFA Director Sandra L. Thompson said. "I am en- couraged to see the Federal Home Loan Banks pursue creative and innovative approaches to addressing local housing needs through the voluntary programs they undertake in addition to meeting their obligations under the Affordable Housing Program." Funds awarded through the AHP rose by approximately $180 million in 2023. Combined advances under the CIP and CICA programs, issued to mem- bers to finance affordable housing and economic development projects in low- er-income communities, grew by 44%. The increased support for affordable housing and community development initiatives came as FHLBank earnings have recovered in the last few years. The FHLBanks are statutorily mandated to commit 10% of net income for the prior year to the AHP, which totaled approximately $355.2 million in 2023. Their actual AHP awards in 2023 were approximately $91.7 million—or about 26%—above that amount. FHLBank contributions to the AHP rose for the first time since 2018. Key takeaways from the report include: • The FHLBanks approved approximately $446.9 million in total contributions to the AHP, assisting more than 33,000 low- or moderate- income households, more than 17,000 of which were very low-income households. This funding represented a 67% increase from 2022. • The FHLBanks assisted approximately 32,000 low- or moderate-income households through the CIP and supported 399 targeted economic development projects through CICA. Overall, CIP and CICA advances totaled just over $7 billion, an increase of over $2 billion from 2022. • One additional nondepository CDFI joined the FHLBank System, bringing the total to 71 nondepository CDFI members. That number has grown by 18% since 2019. Outstanding FHLBank advance balances at nondepository CDFI members were approximately $336.2 million at year- end 2023, an increase of about $63.8 million from 2022. • Providing liquidity such as advances