The 12 Federal Home Loan banks could advance more funds for community development projects under proposals made Wednesday by the Federal Housing Finance Board.
One proposal would create two new programs for rural and urban community investment. Under the Rural Development Advance program, the banks could make advances for economic development projects that benefit moderate- and low-income families. Funding provided through the Urban Development Advance program would be required to benefit low-income families.
Home Loan banks also would be permitted to create their own community investment programs as long as the funds go to projects in areas with low median income or that have been designated for federal economic development assistance.
A second proposal would make it easier for Home Loan banks to issue standby letters of credit for economic development projects.
Comments on both plans are due 90 days after publication in the Federal Register, which should occur next week.