The Federal Home Loan Bank of Chicago has committed $11.25 million for affordable housing and small business development to support diversity and economic opportunity in Illinois and Wisconsin over the next three years.
Its 2022 Targeted Community Lending Plan has two affordable housing programs: the Community First Diverse Developer Initiative and the Community First Housing Counseling Resource Program. The third component, Community First Accelerate Grants for Small Business, represents a shift in focus from the existing Community First Capacity-Building Grant Program.
"The need for the three new, voluntary programs was highlighted by our Community Investment Advisory Council and embraced by our board and leadership team as an impactful strategy to meaningfully contribute to community investment solutions that support equity and expand access to affordable housing and economic development opportunities in members' communities," Katie Naftzger, vice president and community investment officer at FHLBank Chicago, said in an emailed statement.
These voluntary programs go beyond the statutory commitment under federal law, which applies to all 11 Federal Home Loan Banks, to dedicate 10% of its previous year's net earnings to affordable housing. Some people support
The FHLBank San Francisco launched a voluntary
The FHLBank Chicago programs differ from that because all of the funding comes from the bank, without a matching component, Naftzger said.
Creation of the Diverse Developer Initiative grew out of discussions with the advisory council's Racial Equity Working Group that identified a critical need for resources to advance diversity and equity within the affordable housing development industry.
There are three grant tracks: internships, training and mission-driven investments. Groups eligible to receive one of them include development firms seeking to expand expertise; talent development programs that look to increase diversity within the affordable housing industry; trade and professional associations that support diverse developers; and established development firms seeking to offer internship opportunities. The competitive application period opened on April 4 and will close on May 13.
A pair of state agencies will administer the housing counseling program grants: the Illinois Housing Development Authority and the Wisconsin Housing and Economic Development Authority.
Eligible Department of Housing and Urban Development counseling organizations can use these funds for capacity-building activities to expand reach to minority and low- and moderate-income homebuyers. In particular, this can include marketing and outreach activities; staffing; and technology upgrades.
The FHLBank Chicago significantly expanded funding in 2020 for its voluntary programs starting with its COVID-19 Relief efforts, which included $21.4 million in grants for community groups and small businesses, and $1.9 billion in advances for its members. The Targeted Impact Fund specifically focused the bank's resources on underserved communities hardest hit by COVID-19.
"Since then, the bank has continued to dedicate expanded resources to meet community needs, which have only been heightened by the pandemic," Naftzger said. "The three new programs are great examples of our heightened commitment."
