WASHINGTON -- The Federal Housing Finance Board on Wednesday approved affordable housing subsidies, worth a total of $30.5 million, for 203 lenders.
The board was able to approve funding for only about 30% of the 702 advances requested, illustrating the increasing popularity of the Affordable Housing Program, said Rita Fair, managing director of the finance board.
"This really shows that demand for the Affordable Housing Program is increasing," Ms. Fair said. "As it has matured, we have been getting twice as many applications for subsidies as we can fund."
Advances provided by the program, which is administered by the finance board, allow member commercial banks to make loans that help them comply with the Community Reinvestment Act, Ms. Fair said.
The 203 applications approved will finance the development of 9,069 housing units, 80% of which will be targeted for very-low-income families. "Very low income" denotes families that earn 50% or below the area's median-family income.
The Affordable Housing Program provides direct subsidies or loans at subsidized rates to financial institutions that are members of the Home Loan Bank System in order to finance housing projects. The 12 district banks evaluate and score applications from member institutions, then forward them to the finance board for final approval.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, required that the 12 district banks provide subsidies of $75 million in 1994.
With Wednesday's approval, the amount provided ended up at $86.5 million -- the extra $11.5 million consists of "recaptured" subsidies that were not used in 1993. In 1995 and subsequent years, the system must provide subsidies of 10% of net income or $100 million, whichever is greater. The program has awarded more than $300 million for the creation of 82,000 units of housing since its inception in 1990.