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. Indirectly, the Federal Home Loan Bank of San Francisco programs have 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 for seniors, persons with disabilities, veterans, young people transitioning out of the foster care system and other at-risk youth, people with disabilities, individuals struggling to overcome addiction, and homeless men, women, and children.
Supporting Affordable Housing
Each year the Federal Home Loan Bank of San Francisco offers grants and loans to its member institutions to encourage the building of affordable housing. In the 2017 funding competition, the Bank awarded $73.6 million in AHP grants through 20 members. The funds will support 89 projects that will create more than 6,200 units of affordable housing in seven states.Their programs include help for first-time homebuyers to 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.