As part of the streamlining of the Federal Home Loan Bank System, the Federal Housing Finance Board, the FHLBanks' regulator, has given the individual banks blanket approval to make changes to their affordable housing Program-funded projects.
These modifications are basically unforeseen changes--delays in construction or permits, non-FHLBank financiers backing out, et cetera--in the original application for funds from an FHLBank, which generally provides only the seed money for an affordable housing project. The balance of funding is provided by other sources.
"AHP's strengths are its flexibility as a funding source for housing projects, and its ability to attract other funds for Projects in their nascent stage," said FHFB Director Nicolas P. Retsinas.
Retsinas said the board's action "allowing modifications to be approved by the FHLBanks further increases AHP's flexibility and speeds the process of providing housing for families in need." Under the previous system where the board handled all modification requests, delays of one month to two months were not uncommon. And with 280 modification requests out of the approximately 2,100 AHP funded projects since its inception in 1990, it was felt that letting the individual banks handle the modifications would move the projects much faster, said a spokesman for the finance board.
Often cited as a national model of a successful housing program, the AHP has subsidized 63,000 units with $237.4 million in subsidies leveraging $3.3 billion in development costs.
Anyway, of the 280 modification requests, the board approved 99%.
The following two criteria have to be established in order for a modification to receive blanket approval:
* The AHP project, as modified, must continue to score high enough to have been funded in its original AHP funding round, so that the competitive process for awarding AHP funds is maintained; and
* The FHLBank must determine at the time AHP funds are drawn the project continues to qualify for AHP funding in accordance with the rules and policies of the finance board.