It's putting some serious financing behind the issue
Everybody seems to be talking about skyrocketing home values and the luxury many homeowners now have of tapping into equities to finance other expenses. It may make one wonder if everyone’s forgotten about the growing need for affordable housing too.
Enter the Federal Home Loan Bank of New York, which, towards the end of last year, announced it had awarded $34.3 million for 46 affordable housing initiatives. The projects cover a wide area of the US, encompassing not only New York and New Jersey but Arizona, California, Maryland and Pennsylvania. The awards are funded through the federal home loan banks’ Affordable Housing Program (AHP), resulting in the creation, rehabilitation or preservation of 2,480 units, including 1,641 dedicated to very low-income housing, officials announced.
Not just providing housing, the initiatives are also expected to drive community development. Officials anticipate that more than $748 million in housing investment will result from the development of such projects.
While the Biden administration has touted affordable housing creation as a top priority, the grants are hardly new. A spokesman for the federal home loan bank, Brian Finnegan, explained the program dates to 1989, when Congress created the affordable housing program. Yet the roots of the initiative date to the 1930s, when the 11 home loan banks were first created. The first series of grants were awarded in 1990, and have been awarded ever since, Finnegan said.
Grants represent 10% of the income of each home loan bank, the spokesman said.
“Awarding our annual Affordable Housing Program grants is one of the most important things we do, and something that our entire team looks forward to each year,” José R. González, president and CEO of the Federal Home Loan Bank of New York, said in a prepared statement. “The Affordable Housing Program is central to our housing mission, and provides us with the opportunity to join with our members and housing partners to make a direct and immediate impact in the communities we serve. The past two years have been difficult for so many within these communities, and we have seen just how prevalent housing instability is across our nation.”
The $34.3 million grant allotment is less than the $36.9 million in awards for 2020, Finnegan confirmed. That aggregate total also represented 46 grants like in 2021, the spokesman said.
“For us, it’s a consistent contribution each year. It’s a key part of our mission,” it was explained. “We have a Congressional mission of advancing housing growth and development in the communities we serve. This is something we do in periods of stress and in calm periods.”
The Federal Home Loan Bank of New York’s AHP provides members with direct subsidies which are passed on to income-qualified households through sponsoring local community-based organizations. AHP financing is combined with other funding sources to create housing for moderate-, low- and very low-income households. Program awardees receive this funding through a competitive application process. Each competing project must be sponsored by a financial organization that is a member of the FHLBNY in partnership with a community-based sponsoring organization.
The 11 federal home loan banks have awarded more than $6.7 billion in AHP funds since 1990, officials noted. At the Federal Home Loan Bank of New York, the AHP has supported 1,974 projects with more than $860 million in grants, helping to create or preserve nearly 97,000 units of affordable housing, leveraging an estimated $15 billion from other funding sources.
New Jersey communities benefiting from the announced funds are: Bordentown Township, Chatham, Cherry Hill, Glassboro, Greenwich, Haledon, Millstone Township, Moorestown, Newark, New Brunswick, Saddle River, Wanaque and Westampton. New York communities standing to benefit from the announced funds are: The Bronx, Brooklyn, Buffalo, Evans Mills, Cazenovia, Ithaca, Monroe, New York, Ogdensburg, Rochester, Sennett, Southampton, Syracuse and Troy.
Grants were also awarded for New River, Arizona; Windsor, California; Baltimore, Maryland; and Philadelphia, Pennsylvania.
