Federal Home Loan Banks: Too Soon to Tell the Potential Impact of Excess Stock Rule on the Affordable Housing Program
Highlights
Affordable housing organizations and Federal Home Loan Bank (FHLBank) members have raised concerns that a Federal Housing Finance Board (FHFB) rule limiting excess stock could adversely impact FHLBank earnings. In particular, concerns have been raised regarding the FHLBanks' Affordable Housing Program (AHP), which subsidizes the cost of affordable housing with funds from the 12 FHLBanks, all of whom are required to contribute a minimum of 10 percent of their prior year's net earnings to the program, subject to a minimum annual combined contribution of $100 million. Congress asked us to examine the impact of FHFB's rule making on AHP. Specifically, this report describes (1) the results of FHFB's rule making and the provisions of the final rule on excess stock, and (2) the potential impact of the final rule on AHP.