FHLBank Atlanta makes $5 million in homeownership assistance available

The Federal Home Loan Bank of Atlanta announced Tuesday it was making an additional $5 million in funds available to assist low-income residents with home purchases. 

Eligible borrowers will be able to apply for as much as $10,000 toward a purchase or a combined purchase and rehabilitation of a new home through two different programs administered by the bank’s AHP Homeownership Set-aside Program. Funding will be available through FHLBank Atlanta member financial institutions beginning on August 29.

The first-time homebuyer product provides up to $7,500 in funding to be used for down-payment assistance, closing costs, counseling or property rehabilitation for new mortgage borrowers in connection with the purchase of an existing home. 

FHLBank Atlanta’s community partners product will allot as much as $10,000 per consumer for the same designated costs but is open only to current or retired law enforcement officers, educators, firefighters, health care workers, other first responders, essential workers, veterans and their surviving spouses.

“This additional funding comes at a critical time for many working, low-income borrowers given the current economic headwinds and uncertainty facing the housing market,” said Arthur Fleming, FHLBank Atlanta’s senior vice president and director of community investment services. 

Interest rates, which are more than 2% higher year over year, and still-limited inventory have exacerbated affordability concerns in 2022, contributing to an intensified market slowdown.

Established in part to support communities and local development, the Federal Home Loan banks have long supplied liquidity to lenders, providing them with funding to make new loans to their customers, particularly during times of economic stress. While talk grew for an overhaul of the system — including calls for diversification of offerings — during the mortgage-originations boom of 2021 when banks were flush with capital with which to issue loans, interest in federal home loan institutions has surged again in this year’s slowing economy. Advances made by the 11 Federal Home Loan banks increased 48% in the first half of 2022 to $518.9 billion from the end of last year.

The announcement comes after two other institutions within the Federal Home Loan bank network made monetary commitments toward community investment earlier this year. In March, FHLBank San Francisco unveiled a $1 million initiative to increase home-education programs for Black borrowers, and in April, FHLBank Chicago said it would provide $11 million in funding for affordable housing and small business development.