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| The Affordable Housing Program |
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The Affordable Housing Program (AHP) is a subsidy fund designed
to assist in the development of affordable housing for low and moderate
income households. The Chicago Federal Home Loan Bank (Chicago FHLB)
contributes 10% of its previous year's net income to the AHP each
year. The allocation is split between the Chicago FHLB's competitive
application program and the non-competitive homeownership set-aside
program, Downpayment Plus®
(DPP®). The AHP is governed by Federal
Regulation 12 CFR Part 951. Pursuant to the AHP regulations, annually
the Bank's Board of Directors adopts an AHP
Implementation Plan outlining the program.
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| The AHP Competitive Program |
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| Financial institutions that hold stock in the Chicago FHLB can
apply for AHP funds on behalf of community projects. The Chicago FHLB
awards AHP funds twice a year through a competitive process. The AHP
subsidy may be in the form of a grant ("direct subsidy") or a below-cost
interest rate on an advance (loan) from the Chicago FHLB to a member.
Member institutions are encouraged to work with non-profit organizations,
for-profit entities and public agencies in developing AHP applications.
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| Eligible Uses |
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AHP subsidies must be used for one of two broad purposes:
- To finance the purchase, construction and/or rehabilitation
of owner-occupied housing for households with incomes at or below
80% of area median income; or
- To finance the purchase, construction and/or rehabilitation
of rental housing. At least 20% of the units, must be occupied
by, and affordable to, households with incomes at or below 50%
of area median income.
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| Eligible uses of funds under the competitive program are acquisition,
construction, or rehabilitation costs, including related soft costs,
interest-rate buydowns, and downpayment and closing cost assistance.
AHP funds may not be used for capitalized operating reserves, non-residential
space, or to provide support services. The benefits of the AHP subsidy
must be passed through to the project or the end user. |
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| Eligibility Requirements |
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Applications will be evaluated to determine whether they meet the
eligibility requirements per 12 CFR 951.5(b) of the AHP Regulation,
including:
- The project must be either an owner-occupied project or a rental
project.
- Applications must demonstrate project feasibility. The review
will include an analysis of the sources and uses of funds, project
costs, operational feasibility, and the need for the AHP subsidy.
Relevant factors in determining project feasibility include, but
are not limited to, applicable financial ratios, market demand,
and other non-financial project characteristics.
- AHP subsidies for approved projects must be likely to be drawn
down within one year of the date of approval of the application.
- AHP assisted projects must be retained as affordable (via a
recorded retention mechanism) for five years for owner-occupied
projects and fifteen years for rental projects.
- A project's sponsor must be qualified and able to perform its
responsibilities as committed to in the AHP application.
- The project must comply with applicable federal and state fair
housing and accessibility laws and regulations.
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| Application Scoring |
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Applications that meet the eligibility requirements will be scored
on a 100 point scoring system based on nine criteria:
- Use of government-owned or other donated or discounted properties
- Sponsorship by a not-for-profit organization or government entity
- Income targeting
- Housing for homeless households
- Promotion of empowerment
- First District Priority (criteria annually selected by the Chicago
FHLB)
- Second District Priority (a housing need identified annually
by the Chicago FHLB)
- AHP subsidy per unit
- Community stability
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These criteria are explained in detail in the Chicago FHLB's Application and Scoring Instructions published semi-annually with the
AHP application.
Applications achieving the highest scores will be awarded funds until
all available AHP funds for a given competitive round are exhausted.
The next four highest scoring applications will be placed in reserve
and may be awarded funds should funds become available prior to the
next round of funding.
Projects awarded funds will be monitored by the Chicago FHLB throughout
the retention period (five years for owner-occupied projects; 15 years
for rental projects) to ensure that they remain in compliance with
AHP regulations and with the commitments made in the AHP application.
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Before Rufus moved into Los Vecinos Apartments, a Single-Room Occupancy (SRO) rental development on Chicago's west side, he had no home.
Rufus now has his own apartment complete with kitchen and bath and the camaraderie of a caring community. Most importantly, as Rufus explained,
Los Vecinos has given him "a new lease on life, and hope."
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Click here for complete story.
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