FHLBank Chicago Pilot and Voluntary Programs
FHLBank Chicago delivers innovative programs to serve communities in Illinois and Wisconsin, particularly in underserved areas. Our voluntary programs go beyond our statutory and regulatory requirements to address unique and local community development opportunities. Measuring and elevating community impact is crucial to creating effective programs, and pilots can provide a limited space to determine enhancements and success.
Our commitment to deliver innovative regional support to our members and their communities drives FHLBank Chicago’s pilot programs. Through our housing and thought leadership, member input, community-building and economic development initiatives, we work with our members and their customers. This page provides the descriptions of the current pilot programs available to our members and their communities including the name, a brief description, goal, alignment to FHLBank Chicago’s mission, the scope and duration of the program.
Low-Income Housing Tax Credit (LIHTC) Collateral Pilot Program
Description: The Low-Income Housing Tax Credit (LIHTC) Collateral Pilot Program will provide FHLBank Chicago members with a reduced collateral haircut for up to $300 million of qualifying mortgage loans on LIHTC multi-family housing projects. Through our member banks, credit unions, insurance companies, community development financial institutions (CDFIs), and housing associates, the program will amplify and incentivize lending in support of affordable housing for low-income individuals and families.
Goal: Support increased lending to address low-income affordable housing needs identified in FHLBank Chicago's Targeted Community Lending Plan and facilitate member lending in support of LIHTC affordable housing projects through reduced haircuts.
Mission Alignment: The LIHTC program is a key federal tax policy designed to incentivize private investment in the development and preservation of affordable housing in the United States for lower-income households. The FHLBank Chicago LIHTC Collateral Pilot Program will lower the haircut on qualifying LIHTC loans pledged by FHLBank Chicago members, thereby freeing up capital for members to originate more loans to support affordable housing.
Scope and Duration: The LIHTC Collateral Pilot Program will provide members with a reduced collateral haircut (17 percent) for up to $300 million of qualifying mortgage loans on LIHTC multi-family housing projects over a period of up to three years, from August 2024 through August 2027, with regular evaluation.
Program Details:
- Eligible loans must be first-lien, permanent loans on LIHTC projects.
- Eligible loans must be current and are subject to FHLBank Chicago eligibility requirements for multi-family loans.
- Eligible loans must be reported to FHLBank Chicago using the LIHTC collateral listing file.
- Eligible loans are subject to FHLBank Chicago review prior to receiving the reduced haircut.
- The LIHTC Collateral Pilot Program is subject to a $300 million cap on unpaid principal balance of pledged LIHTC loans, with $200 million reserved for members with assets under $1.46 billion, and an individual member limit of $75 million.
For more information, please contact collateraleligibility@fhlbc.com or view our LIHTC Collateral Pilot Program product sheet.
Community Impact Advance
Description: The Community Impact Advance pilot program will provide $50 million in subsidies to discount the rate on advances up to 200 basis points. Through our member banks, credit unions, insurance companies, community development financial institutions, and housing associates, the program will amplify and incentivize select affordable housing and community development activities in Illinois and Wisconsin. Through a grant, direct lending or investment activity, available funding under the Community Impact Advance pilot program may be used to:
- Support affordable housing through the purchase, construction, or rehabilitation of housing units.
- Create and retain jobs, and provide critical infrastructure and community facilities, such as broadband, healthcare, childcare and other community services in low- and moderate-income areas.
- Expand access to capital for community development financial institutions (CDFIs), nonprofits, and public benefit corporations that assist underserved populations.
Goal: Directly support specific affordable housing and community development needs identified in FHLBank Chicago's Targeted Community Lending Plan, including increased housing supply, jobs created, and enhanced development activity.
Mission Alignment: Through our work across Illinois and Wisconsin, we see the needs of our communities and the progress that members are making to address funding and community development. As the needs in our district are greater than our existing programs can address, we developed the Community Impact Advance to amplify our members’ efforts to address the unmet supply in affordable rental and homeownership, scarcity in capital to the community development financial institution and other community partners doing mission-consistent work, and to provide support for vulnerable small businesses and infrastructure needs in underinvested areas.
Scope and Duration: The Community Impact Advance pilot program will provide $50 million in interest rate discounts on advances, from July, 2024 through June, 2027 with annual evaluation.
Voluntary Programs
FHLBank Chicago also offers voluntary programs to support affordable and sustainable homeownership, housing counseling to prepare potential buyers for homeownership, and to increase housing supply by helping residential developers expand their staff and training.