How to Turn Around the FHLB's Economic Development

The lackluster performance of the Federal Home Loan Banks' economic development could be improved by following the model of their own Affordable Housing Program, writes Carol Wayman.

2 minute read

August 23, 2011, 6:00 AM PDT

By Matthew Brian Hersh


"Many housing developers are familiar with the FHLBanks' Affordable Housing Program (AHP), which requires each of the 12, independent, regional banks to set aside 10 percent of annual profits to invest in local affordable housing initiatives," writes Wayman, federal policy director of the Corporation for Enterprise Development (CFED). "The results have been incredibly positive, with more than $4.2 billion in grants administered since 1990, creating more than 700,000 units. The program has been the 'crown jewel' of the system as it brings strong housing development proposals together with appropriate financing. AHP is the largest source of private funds available for affordable housing in the nation."

While there are examples of good economic development financing from FHLBanks-a community space in Washington, DC's Shaw neighborhood; a permanent, year-round farmers' market for low-income farmers and entrepreneurs in Nevada; the redevelopment of vacant commercial property into mixed-use development in Worcester, Mass.; a series of loans given to small businesses in Wisconsin - but for a GSE that gets benefits from its semi-public status, the amounts are disappointingly low.

"The best way to increase investment in community economic development is to mandate it," writes Wayman, "using the AHP model - setting aside a percentage of FHLBanks' annual profits for investment in community economic development projects identified by member financial institutions.

"In this time of overwhelming budget cuts, high levels of unemployment and global economic change, a long-term, significant funding source that brings together community development organizations, local governments, and the financial sector could play a crucial role to building a stronger, more inclusive economy."

Thanks to Matthew Brian Hersh

Monday, August 22, 2011 in Shelterforce

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 16, 2025 - Diana Ionescu

Green vintage Chicago streetcar from the 1940s parked at the Illinois Railroad Museum in 1988.

Chicago’s Ghost Rails

Just beneath the surface of the modern city lie the remnants of its expansive early 20th-century streetcar system.

July 13, 2025 - WTTV

Blue and silver Amtrak train with vibrant green and yellow foliage in background.

Amtrak Cutting Jobs, Funding to High-Speed Rail

The agency plans to cut 10 percent of its workforce and has confirmed it will not fund new high-speed rail projects.

July 14, 2025 - Smart Cities Dive

Worker in yellow safety vest and hard hat looks up at servers in data center.

Ohio Forces Data Centers to Prepay for Power

Utilities are calling on states to hold data center operators responsible for new energy demands to prevent leaving consumers on the hook for their bills.

July 18 - Inside Climate News

Former MARTA CEO Collie Greenwood standing in front of MARTA HQ with blurred MARTA sign visible in background.

MARTA CEO Steps Down Amid Citizenship Concerns

MARTA’s board announced Thursday that its chief, who is from Canada, is resigning due to questions about his immigration status.

July 18 - WABE

Rendering of proposed protected bikeway in Santa Clara, California.

Silicon Valley ‘Bike Superhighway’ Awarded $14M State Grant

A Caltrans grant brings the 10-mile Central Bikeway project connecting Santa Clara and East San Jose closer to fruition.

July 17 - San José Spotlight