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Federal Home Loan
Bank's Community Investment Program (CIP) |
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TARGET USERS: |
Community organization
providing housing; Cities; County |
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WHAT IS THE FEDERAL HOME LOAN
BANK & CIP PROGRAM: |
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The FHLB is a government-sponsored
correspondent bank that can be used as an alternative source of funds for
member institutions. The FHLB’s
Community Investment Program has a component which allows member banks to obtain
fixed rate funds at a cost which may be below the institution’s normal
cost, thus allowing the institution to lend these funds at a lower rate.
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The CIP is designed to finance the acquisition, construction or
rehabilitation of owner-occupied and rental housing for families with incomes
that do not exceed 115% of the HUD adjusted area median income in any census
tract. In low-income census tracts
(i.e. census tracts at or below 80% of area median income) housing for
families with incomes up to 115% of area median income may be financed. |
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The CIP also provides financing for community
economic development, commercial/industrial, and small business
activities. In addition, the activity
must be located in one of the following specifically defined areas: |
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The project is located in a Champion Community, or an
Empowerment Zone or Enterprise Community, as designated by USDA or HUD; |
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The project is located in an Indian area, as defined by the
Native American Housing Assistance and Self-Determination Act of 1996,
Alaskan Native Village, or Native Hawaiian Home Land. |
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ADVANTAGES: |
1) |
The lender may provide
funds at a below market rate. |
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2) |
The lender may provide these funds on a long term, fixed rate
basis. |
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DISADVANTAGES: |
Due to higher administrative costs, the lender may limit these
types of loans to higher dollar amounts.
Loan may have pre-payment penalty. |
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HOW TO APPLY: |
Through a local financial institution that is a
member of the Federal Home Loan Bank (FHLB). |
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CONTACT: |
Information and technical assistance, please contact: |
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Lisa Robinson, FHL Bank Atlanta |
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(800)
536-9650 ext. 8576 |
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www.FHLBatl.com |
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Source: Federal Home Loan Bank, 2003 |
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