The Federal Home Loan Bank of Chicago (FHLBank Chicago) is announcing the Low-Income Housing Tax Credit (LIHTC) Collateral Pilot Program, which provides members with increased lendable value on their pledged collateral for up to $300 million of qualifying mortgage loans on LIHTC multi-family housing projects. Through member banks, credit unions, insurance companies, community development financial institutions (CDFIs), and eligible housing associates, the program will amplify and incentivize lending in support of affordable housing for low-income individuals and families.

While all FHLBank Chicago members are eligible to participate, up to $200 million of the LIHTC Collateral Pilot Program funding will be reserved for members with assets under $1.46 billion, including CDFIs.

“Our members are working to address needs and gaps in affordable housing to serve and improve their communities,” said Michael Ericson, President and CEO, FHLBank Chicago. “Our new LIHTC Collateral Pilot Program enhances the value of this important collateral asset class to increase available funding for LIHTC loans in our district, provides much-needed liquidity for affordable housing to benefit low-income individuals and families, and delivers on our mission.”

The LIHTC Collateral Pilot Program is the latest example of FHLBank Chicago’s innovative approach to using its financial strength to support members through impactful reinvestments in their communities. LIHTC loans are highly aligned with FHLBank Chicago’s mission to provide reliable liquidity and support affordable housing.

FHLBank Chicago continues to respond to community needs, increasing its annual commitment to over $180 million for affordable housing and community development initiatives, as of second quarter 2024. The new LIHTC Collateral Pilot Program marks the second pilot program FHLBank Chicago announced this summer. In July, FHLBank Chicago announced the launch of its Community Impact Advance Pilot Program, which provides $50 million in interest rate subsidies to help expand affordable housing, economic development, and community partnerships. The $50 million in interest rate subsidies was fully reserved by members in just 10 days.

The LIHTC Collateral Pilot Program will be available for up to three years, from August 2024 through August 2027, with regular evaluation. For more information, visit FHLBank Chicago’s Pilot Transparency Page.