FALHFA Conference What’s New with our Federally Chartered Partners and Other Sponsors? Federal Home Loan Bank of Atlanta’s Products and Services Art Fleming, Senior Vice President, Director of Community Investment Services Leah Douglass, Vice President, Sales and Trading Operations Manager Friday, July 13, 2018 St. Petersburg, FL
Our Discussion Today • Who Are We? • How can HFA’s become Members? • How can We Assist Local HFAs in achieving business objectives? • Community Heroes Structured Partnership • How can We Help? • Q & A 2
FHLBank Atlanta Who Are We? FOR THOSE PERMISSIONED
FHLBank System Over 80 Years of Helping Institutions Grow and Prosper 4
FHLBank System FHLBank System Increase and expand the availability of Provide wholesale products and services to funds for residential mortgage and approximately 7,000 member financial community development lending nationwide institutions 5
FHLBank Atlanta Shareholders As of December 31, 2017 16 7 31 76 Commercial Banks Credit Unions Savings Banks Insurance Companies 217 534 Housing Associates CDFI Non-Depository 881 Total Shareholders 6
FHLBank Atlanta – Financial Highlights December 31, 2017 • Total Assets: $146.6 billion • Total Advances (loans): $102.2 billion • 2017 Net Income: $349 million • Retained Earnings : $2.0 billion • Fourth Quarter 2017 Dividend: 5.16% • Total Membership: 881 institutions 7
FHLBanks Products and Services Affordable Housing Advances Program (AHP) •Provides FHLBank • Real estate funding for the members low-cost acquisition, development, financing for lending construction, or rehabilitation of affordable housing in their communities • Ownership or rental • Single-family or multifamily Letters of Credit • Provide credit enhancement on bonds for residential and economic development 8
Working with Housing Finance Agencies How can HFAs become Members?
Housing Finance Agencies (HFAs) Eligibility as Housing Associates Housing Associate of the FHLBanks is defined as… Housing Finance Authorities - a public agency, authority, or publicly sponsored corporation that serves as an instrumentality of any state or political subdivision of any state, and functions as a source of residential mortgage loan financing in that state 10
Housing Associate Eligibility Requirements • Approved by HUD as a “mortgagee” under Title II of the National Housing Act • Chartered institution having succession • Subject to the inspection and supervision of some governmental agency • Principal activity in the mortgage field must consist of lending its own funds • The financial condition is such that advances may be safely made • The authority to borrow funds, pledge collateral, and deposit funds with the FHLBank 11
Value and Benefits of Becoming a Housing Associate • Access to all liquidity products without purchasing stock – Short-term warehouse – Term funding – Fixed- and variable-rate • Access to Letters of Credit/AAA-rated bond credit enhancement product • Cash management, including safekeeping services • Interest-rate risk management tools 11
Affordable Housing Products and Services How can we Leverage our Products and Services to Advance Your Business Objectives?
Meeting the Unique Business Needs of Housing Finance Agencies Waterfront Rescue Mission Miami Rescue Mission, Lakeside Terrace Senior Apartments Pensacola, FL Miami, FL Winter Haven, FL Warehousing financing Event Structured mortgage loans Sponsorship to facilitate HFA Partnerships single-family programs LOC for Multi- Balance Sheet family Bods 4% Management LIHTC 14
What is the Affordable Housing Program (AHP)? A Unique Offering to Shareholders and the Community $734.9 million since 1990 AHP • 116,276 units Competitive • Leverage ratio = 1:14 Program $199.9 million since AHP 1997 Set-aside • 29,468 units Program • Leverage ratio = 1:22 10 percent Community Investment Program • Real estate finance “equity” enables residential development $8.3 billion Economic and/or rehabilitation • Low-cost CICA advances for Development • Enable Shareholders to grow business, reduce transactional community economic & Program affordable housing risk and achieve CRA regulatory objectives • Capitalized via 10% of Net Earnings As of Mary 2018 15
What is the Affordable Housing Program (AHP)? AHP Competitive AHP Set-Aside Multi-family Rental; Supportive Home Purchase or Housing; Single-Family projects Home Rehabilitation Up to $500,000 • $5,000 - $15,000 • Competitive application • Down payment, closing cost, etc. • Generally first come/first served • Each FHLBank has scoring criteria • Accessed only via Shareholder • Accessed only via Shareholder • Rental and Ownership Development Mortgage Purchase and Home Rehabilitation Developer/Builder Driven Mortgage Professional Driven • New construction • 9 products First-time homebuyer; Foreclosure • Rehabilitation Recovery; Disaster Recovery; • Multifamily Veterans Purchase; • Single-family Veterans Rehab; • Acquisition Community Partners; etc. • Construction and/or permanent financing 16
AHP Competitive Program (Rental) Low-Income Housing Tax Non-LIHTC Supportive Mixed-use Credit multi-family Housing (LIHTC) Rental Transaction Types Reduces project debt service • Which thereby permits a reduction in project rents to enable affordability Use of Funds • Acquisition • Rehabilitation La Joya Villages | Lake Worth, FL • New construction and/ or AHP Investment: $500,000 55 Rental Units • Permanent funding Total Development Cost: $12,206,957 Special Use: Veterans Housing 17
FHLBank Atlanta Affordable Housing Program (AHP) Scale and Impact Profile December 2017 18
AHP Scale and Impact Profile Low Income Housing Tax Credit (LIHTC) AHP Financing December 2017 19
AHP Scale and Impact Profile State of Florida As of December 31, 2017 20
FHLBank Atlanta’s AHP Set Aside Products Purchase Products Rehabilitation Products First-time Homebuyer Community Partners Veterans Returning Veterans Product Product Rehabiliation Product Rehabiliation Product Foreclosure Recovery Veterans Purchase Product Product Community Rebuild and Restore Structured Partnership Products Returning Veterans Purchase Product 21
AHP Scale and Impact Profile Homeownership AHP Financing December 2017 22
Services Expanding Your Eligible Customer Base FHLBank Atlanta’s AHP Income Limit Methodology and Calculator New Methodology and Calculator • implemented in 2015 Selects the greatest of four • calculation methodologies Point-and-click calculator • automatically provides the highest income limit 548 of 599 counties in the Bank’s • district (91%) now have a higher income limit! AHP Income Limit AHP Income Limits % Higher than Old Methodology “Under Old Methodology” “Under New Methodology” $38,700 $47,200 22% Highlands County, FL – Example above based on 4 person household FHLBank Atlanta Income Calculator Tool https://cis.fhlbatl.com/ahp/utilities.portal 23
Letters of Credit (LOCs) Confirming Letter of Credit A confirming LOC – sometimes FHLBank Atlanta called a ‘wrap’ – can help secure improved credit terms for Shareholder provides Confirming community-focused bonds, agreement, application, LOC and LOC fee enhancing the bond’s credit rating, reducing borrowing costs, and improving marketability Shareholder Credit Relationship Shareholder’s Original Letter Beneficiary Customer of Credit Underlying Transaction 24
Using LOCs to Enhance Housing and Economic Development • The debt is structured as taxable (non-residential projects) or tax- exempt or taxable (residential) • Eligible bond activities include: – General Utilities • – Education Electric Power • – Transportation Public • – Housing Healthcare • – Development Environmental • 25
Community Heroes Grant Funding Initiative A Federal Home Loan Bank of Atlanta Product
Description New Initiative • Local structured partnerships focused on Community Heroes • Revitalization and stabilization objectives Structured Partnership Entities • Municipalities • Counties • States • Housing Finance Agencies (HFAs) Targeted Consumers • Community Heroes earning greater than 80 percent up to 120 percent area median income (AMI) – Law enforcement officers – Public school educators – Firefighters – Other first responders FEDERAL HOME LOAN BANK OF ATLANTA 27
Description Up to $4.5 Million in Grants from FHLBank Atlanta Households must be greater than 80 percent AMI and shall not exceed 120 percent Community of AMI Heroes Local Structured Partnership entity (HFA, state, or local Leveraging up to $13.5 municipality) must provide at least 3 to 1 match million in additional grants from local sources All funding shall be extended to support home exclusively via FHLBank Atlanta shareholder financial purchase activities institutions Local entity will manage local structures, intake, processing, and funding $18 Million in Total Funding Available FEDERAL HOME LOAN BANK OF ATLANTA 28
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