Operating Subsidies & Other Financing

Federal Home Loan Bank System
Access links to the federal home loan banks of the following cities: Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, Seattle and Topeka.

Federal Home Loan Bank of San Francisco’s Affordable Housing Program
The purpose of the Federal Home Loan Bank of San Francisco’s Affordable Housing Program (AHP) is to subsidize the interest rate of loans and/or to provide direct subsidies to shareholders engaged in lending for the construction and/or rehabilitation of affordable rental housing projects. These subsidies may be used in conjunction with the federal low-income housing tax credit program as well as other housing assistance programs. The Federal Home Loan Bank of San Francisco accepts applications for funding in two rounds per year. The deadlines for submitting applications each year are April 15 and October 15.

For more information, contact:
Federal Home Loan Bank of San Francisco - Community Investment Department
P.O. Box 7948
San Francisco, CA
Phone: (415) 616-2542

Federal Home Loan Bank of Chicago’s Affordable Housing Program (AHP)
The purpose of the Federal Home Loan Bank of Chicago’s Affordable Housing Program (AHP) is to provide subsidies to financial institutions in the Chicago and Wisconsin area to finance the purchase, construction and/or rehabilitation of owner-occupied housing for families with incomes at or below 80 percent of area median income. The subsidy may also be used to finance the purchase, construction and/or rehabilitation of rental housing, at least 20 percent of the units of which will be occupied by, and affordable to, households with incomes at or below 50 percent of area median income. The AHP is available to financial institutions in Illinois and Wisconsin that hold stock in the Chicago Bank. In 1998, the bank provided approximately $8.7 million in subsidy funds.

Federal Home Loan Bank of Chicago’s Community Investment Program (CIP)
Financial institutions in Illinois and Wisconsin that hold stock in the Federal Home Loan Bank of Chicago can apply for CIP funds. The CIP features below market advances designed to finance housing for households earning less than 115% of Area Median Income, or to finance commercial and economic development projects that benefit low and moderate income households and/or neighborhoods. The Bank also issues CIP Letters of Credit for collateralization of public unit deposits, credit enhancement and other purposes such as performance guarantees that qualify under the CIP guidelines.

For more information, contact:

Federal Home Loan Bank of Chicago
Community Investment Department
111 E. Wacker Drive, Suite 700
Chicago, IL 60601 

Charles M. Hill, Sr. : (312) 565-5705
Leslie Pilot-Gatton : (312) 565-5718
Scott A. Stewart : (312) 565-5725

Federal Home Loan Bank System  
Access links to the federal home loan banks of the following cities: Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, Seattle and Topeka.

Flexible Subsidy Program (Section 201)
The Flexible Subsidy Program is part of HUD’s effort to preserve affordable housing developed under federal government programs. It provides loans to owners of troubled federally assisted low-and moderate-income multifamily rental projects. It has two components: The Operating Assistance Program (OAP) provides temporary funding to replenish project reserves, cover operating costs and pay for limited physical improvements; The Capital Improvement Loan Program (CILP) pays for the cost of major repairs or replacement of building components that cannot be funded out of project reserves. Both components are designed to help restore the properties’ physical and financial soundness in order to maintain the use of the property for low- and moderate-income persons. The program allows rents to remain affordable.

Washington Mutual Bank, Community Lending & Investment Program (Multi-family)
This loan program is for multifamily projects of five or more units that are located in minority and/or low income census tracts or have affordability restrictions. The program provides for technical assistance, construction/rehabilitation loans, and tax credits to cities, counties, non-profit corporations, public housing agencies, as well as for-profit organizations. Loan applications are due April 1 and October 1 annually. 

For more information, contact:
Washington Mutual Bank
Community Lending & Investment Program (Multi-family)
Arthur L. Porter
17877 Von Karman Ave., 4th Floor
Irvine, CA 92714
(949) 833-4123

Rental Housing Insurance (Section 207)
The program provides mortgage insurance to finance construction or rehabilitation of a broad range of rental housing. The intent of Section 207 is to increase the supply of quality and reasonably priced rental housing for middle-income families. Mortgage insurance reduces the risk for lenders by guaranteeing payment in the event of default, making capital available at lower cost.

Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing (Section 223(f)) and Small Projects
Through FHA Section 223 (f), HUD provides mortgage insurance for the purchase or refinancing of existing rental housing. Projects refinanced under Section 223(f) may not undergo substantial rehabilitation. These projects may have been financed originally with conventional or FHA-insured mortgages. Section 223 (f) also applies to existing hospitals, nursing homes, assisted-living facilities, board-and-care homes, and combinations of such facilities.

Section 223 (f) permits the restructuring of mortgages at lower interest rates to preserve an adequate supply of affordable rental housing and health care facilities. These projects usually cannot otherwise be refinanced without causing excessive rent burdens on the current tenants. The program allows long-term mortgages (up to 35 years) that can be purchased by the Government National Mortgage Association (Ginnie Mae). This eligibility for purchase in the secondary market improves the availability of loan funds and permits more favorable interest rates.

For more information contact:
U.S. Department of Housing and Urban Development
Deputy Assistant Secretary Multifamily Housing Programs
Robert Reavis
451 7th Street, S.W. Room 6106
Washington, D.C. 20410
(202) 708-2495