Pilot Program Will Amplify Affordable Housing and Economic Development Investment in Illinois and Wisconsin

The Federal Home Loan Bank of Chicago (FHLBank Chicago) is providing $50 million in interest rate subsidies to help expand affordable housing, economic development, and community partnerships in Illinois and Wisconsin through its new Community Impact Advance Pilot Program. This Program provides an up to two percent reduction in interest rates on advances, which are secured loans, to help FHLBank Chicago member financial institutions support their customers and amplify the impact they are making in their communities.

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Pilot program offered through FHLBank Chicago makes $50 million in interest rate subsidies available to support affordable housing and economic development in Illinois and Wisconsin. The Community Impact Advance is available today to member financial institutions. (Photo: Business Wire)

FHLBank Chicago has already committed more than $110 million in community investment support in 2024. Through additional program commitments and the Community Impact Advance, the Bank’s total investment increases to over $180 million.

“We recognize that economic challenges have created barriers to community investment. After speaking with members of varying sizes and balance sheet composition, the consensus was that expanding interest rate subsidies would be the most impactful way to positively uplift our communities,” said Carolyn Jaw, Executive Vice President, Group Head, Sales, Strategy, and Solutions, FHLBank Chicago. “This increase in funding for community development activities builds on our ongoing efforts to create products and support initiatives that help build stronger and more sustainable communities.”

FHLBank Chicago member banks, credit unions, insurance companies, housing associates, and community development financial institutions (CDFIs) work with their customers to help boost support through lending or investing in mortgages, small businesses, non-profits, and community partner capacity building. Regardless of size or community type, members see the fiscal challenges facing their communities first-hand and are seeking innovative funding solutions to deliver housing and community investment.

“Current elevated interest rates have made accessing capital difficult because of tightening credit standards,” said Ryan Kamphuis, President and CEO, Bristol Morgan Bank. “Compounding the issue, the cost of building and rehabilitating housing and developing essential infrastructure and community facilities has skyrocketed. Products like the Community Impact Advance address the critical need for more funding to build and retain housing and important community development facilities like small businesses.”

Open today, the Community Impact Advance Pilot Program runs through June 30, 2027. Available on a first come, first served basis, FHLBank Chicago members throughout Illinois and Wisconsin can reserve up to $1 million in interest rate subsidy for advances supporting eligible activities in their communities, including lending or investing in:

• Affordable housing – through the purchase, construction, or rehabilitation of housing units.
• Economic development – creating and retaining jobs in small businesses, and providing critical infrastructure and community facilities, such as broadband, healthcare, childcare and other community services in low- and moderate-income areas
• Community partners – expanding access to capital for CDFIs, community development entities, nonprofits, and public benefit corporations that assist underserved populations.

The Pilot Program’s goal is to support thousands of housing units, jobs, economic development projects and community partners. Designed to address growing community needs, it strengthens the availability of liquidity that amplifies support for affordable housing and economic development. For more information, visit fhlbc.com/community-impact-advance.

About the Federal Home Loan Bank of Chicago

The mission of the Federal Home Loan Bank of Chicago is to partner with our members in Illinois and Wisconsin to provide them competitively priced funding, a reasonable return on their investment in the Bank, and support for community investment activities. FHLBank Chicago is one of 11 Federal Home Loan Banks chartered by the U.S. Congress in 1932 to promote homeownership. Our members include banks, thrifts, credit unions, insurance companies, and community development financial institutions throughout our District. To learn more about FHLBank Chicago, please visit fhlbc.com.

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