The U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund) and the Federal Housing Finance Agency (FHFA) have announced a new collaboration to increase capital for affordable housing lending through the Federal Home Loan Banks (FHLBs). This initiative is part of the Biden-Harris Administration's efforts to expand affordable housing supply and reduce costs for American families.
The newly established CDFI Fund-FHFA Working Group aims to help more Community Development Financial Institutions (CDFIs) access affordable capital from FHLBs, particularly in distressed communities underserved by traditional banks. U.S. Deputy Secretary of the Treasury Wally Adeyemo emphasized the administration's commitment to using available tools to enhance housing supply and affordability, stating, "Helping lenders expand their sources of financing and access capital from the Federal Home Loan Banks will help these community banks support a range of projects that can lower housing costs in communities across the country for years to come."
FHFA Director Sandra L. Thompson highlighted the importance of this collaboration, noting that it will aid in accelerating reforms ensuring FHLBs meet their mission of supporting housing and community development. "CDFIs play a key role with FHFA and our regulated entities in efforts to address the nation’s affordable housing challenges," she said.
The Working Group has outlined initial topics for exploration in 2024-2025, including new programs for increasing capital access by non-depository CDFI members, examination of property appraisal methods, and data sharing on CDFI activities.
A Memorandum of Understanding between CDFI Fund and FHFA facilitates data sharing to better serve CDFIs, aligning with U.S. Secretary of the Treasury Janet L. Yellen's agenda to use all appropriate tools at Treasury’s disposal to expand housing supply.
Since its inception in 1994, the CDFI Fund has provided over $8 billion through monetary awards, $81 billion in tax credits via the New Markets Tax Credit Program, and nearly $3 billion in bonds through its Bond Guarantee Program. These efforts have supported more than 1,400 Certified CDFIs across all states and territories.
The FHFA regulates Fannie Mae, Freddie Mac, and 11 FHLBs which provide significant funding for U.S. mortgage markets.
