The Community Investment Program (CIP) offers discounted advances and standby letters of credit to fund affordable housing development for low and moderate income households and to help develop and revitalize communities. CIP funds are available on an ongoing basis to member financial institutions holding stock in the Federal Home Loan Bank of Chicago (FHLB Chicago). The program is governed by the Community Investment Cash Advance (CICA) Regulations, 12 CFR Part 952. CIP financing may also be used in conjunction with Affordable Housing Program (AHP) subsidies. Advances CIP advances are priced at the FHLB Chicago's cost of funds for similar maturities. The CIP provides the flexibility lenders need to link these assets with matching liabilities by offering both a preferential rate and a term from one month to ten years. Rates are listed on the FHLB Chicago's Daily Rate Indications under the CICA column. All advances are subject to the credit and collateral policies of the FHLB Chicago. Standby Letters of Credit CIP Letters of Credit (LOCs) can be used to provide credit enhancement for the issuance of taxable and tax exempt bonds for affordable housing activities. CIP LOCs are offered at a fee of 8 basis points per annum plus an upfront administrative fee. Use of the standby LOC may result in a more favorable interest rate for the bonds, reducing the overall cost of the project. (LOCs are governed by Federal Regulation 12 CFR Part 960.) Eligible Uses Housing projects qualify for CICA rates if they meet one of the following criteria:   Loans for the purchase, refinance, construction or rehabilitation of owner occupied housing where the household income of homebuyers/homeowners is at or below 115% of the area median income (AMI)*. Loans for the purchase, construction, refinance or rehabilitation of rental housing where at least 51% of the units will be occupied by or affordable to households with incomes at or below 115% of area median income (AMI)*. *The FHLB Chicago uses median income guidelines published annually by the Department of Housing and Urban Development (HUD) to determine income eligibility and assumes a 4-person household size. All CIP-eligible loans must be originated within 90 days prior to drawing funds with the FHLB Chicago. Approvals of CIP applications will be extended for the lesser of 30 days from CIP approval date or 90 days from the loan's orgination date. The maximum advance amount is based on qualified outstanding loan balances. Application Process To apply for CIP advances or letters of credit, members must submit a completed CIP Application (.doc) and provide documentation to verify that the loan(s) qualify for the CICA rate. Acceptable documentation includes: Owner Occupied Housing: Homeownership worksheet (included in the CIP Application). The worksheet requests the homebuyers' household income, county, state, loan amount, loan balance, loan term, and a loan origination date. Rental Housing: Rental worksheet (included in the CIP Application) or one of the following: Schedule of rents Rent roll including tenants' incomes Copy of deed restriction limiting tenants' incomes Applications for CIP advances are generally approved within 2 business days. Applications for CIP LOCs are referred to the FHLB Chicago's legal counsel following confirmation of CIP eligibility. Legal counsel will contact the member directly to complete the LOC process. After members receive approval of their CIP advance applications, they have a period of time to access the funding: 30 days for applications with underlying loans that have been previously originated and 90 days for applications with underlying loans that have not yet been originated. For previously originated loans, the 30-day period will be reduced if the origination date conflicts with the requirement that loans must be originated within 90 days prior to drawing funds with the FHLB Chicago. If the applications are not funded within these time frames, they expire. To fund CIP advances, members must notify Community Investment staff and submit an Application for Advance (.doc) signed by two authorized signatories. Community Investment staff can provide you with the names of individuals authorized by your institution to sign for advances.

Types of Lending That May Qualify for CIP Include: Mortgage lending to homebuyers earning less than 115% of the area median income (AMI); Lending to rental housing deals, where at least half the units are affordable to households earning less than 115% of AMI.