Federal Banks are different than regular commercial banks. Membership is by banks as opposed to membership by individuals. However, as the name implies, they do have both direct and indirect effects on the housing market in the form of stabilizing programs that help member banks deal with market volatilities. The details of their programs are very sophisticated and mostly deal with providing financial flexibility in cash flow and interest rate fluctuations. FHLBank Atlanta participates in the Mortgage Partnership Finance which gives FHLBank System members a competitive alternative for selling their mortgages into the secondary market. Indirectly, the Federal Home Loan Bank of Atlanta program has assisted thousands of households nationwide with their home financing needs.
Supporting Community Development
Federal Banks also enter the market and directly help their member institutions through their Community Investment Program advances (or loans) that allow members to fund affordable housing while maintaining profit margins and minimizing risk. Members can obtain discounted advances that are priced up to 10 basis points below regular commercial advances to support qualified affordable housing development. These programs in turn are offered to developers and home builders to create an incentive for the construction of low cost housing.
Supporting Affordable Housing
Each year the Federal Home Loan Bank of Atlanta sets aside 10 percent of their annual net income to provide funding for affordable housing. Their programs include help first-time homebuyers fulfill the dream of owning a home, help veterans purchase or rehabilitate a home, and provide much needed resources to help developers create affordable housing for very low- to moderate- income families. The website seems to feel the need to justify this expenditure beyond housing families., by saying “It’s not only good for the community but also good for the economy. According to a recent study, for every $1 million of Affordable Housing funding provided, 158 jobs are created.”