AHP Modernization

The Final AHP Rule necessitates the following significant changes for certain owner-occupied units receiving subsidy awarded through the AHP General Fund and to the Set-aside Programs, known within FHLBank Chicago's District as the Downpayment Plus^® Programs (DPP^®). These changes, applicable to both programs, are summarized below. 

• Retention agreements for rehabilitation-only owner-occupied units awarded through AHP are no longer allowed. Furthermore, any outstanding retention agreements for rehabilitation-only owner-occupied units are no longer enforceable.
• The retention agreement used in Illinois and Wisconsin has been updated. This new retention agreement is required for: 1) all acquisition-only and acquisition/rehabilitation AHP owner-occupied units completed on or after January 1, 2020; and 2) all DPP-assisted loan closings on or after January 1, 2020. Since this retention agreement is used in Illinois and Wisconsin only, please review and update any retention agreements used for other states. 
• The repayment worksheet has been updated to reflect:

• The new net proceeds calculation,
• A de minimis exception to subsidy repayment when the amount subject to repayment is $2,500 or less, and
• The use of a proxy method based on sales price to determine whether the subsequent homebuyer is a low- or moderate-income household. This may result in an exception to repayment.

• Required minimum allocation to the AHP General Fund is reduced from 65% to 50% of an FHLBank’s annual contribution
• Authority to create Targeted Fund(s) that total up to 40% of the annual contribution

• The number of statutory priorities increases from two to three; however, the third is optional if at least 10% of the annual contribution is allocated to Set-aside Program(s)
• Three broad regulatory priorities are established whereby the FHLBanks may choose from identified needs under each; the FHFA-identified needs in the regulation are not exhaustive, and alternative needs do not require advance FHFA approval

• Publication of TCLP is aligned with Affordable Housing Program Implementation Plan
• Needs Assessment in TCLP directly informs an FHLBank’s programming
• Publication timeline for announcing Targeted Funds allows exceptions for disaster relief-related funds

• Initial Monitoring: FHLBanks must review project back-up documentation regarding household incomes and rents except for:
• Projects financed with the 9% or 4% Federal Low Income Housing Tax Credit
• Projects funded by HUD Section 202 Program for the Elderly, HUD Section 811 Program for Housing the Disabled, USDA Section 515 Rural Multifamily Program, and USDA Section 514 Farmworker Multifamily Program
• Long-term Monitoring: The above projects are exempt from the review of back-up documentation, including rent rolls