Community Investment: Residential Lending Advance
Residential Lending Advance
The Bank’s Community Investment
Advance (CIA) provides your
financial institution with a useful
tool for the business of residential
lending. These funds are at a
discounted rate to the member, and
are intended to assist our members
in meeting affordable housing needs
in both urban and rural communities.
Residential Lending Advances are
available for targeted loans that
support the purchase, construction,
rehabilitation or refinancing of
owner-occupied and rental
residential housing. The program also
supports predevelopment financing of
owner-occupied residences and rental housing. Loans that are
short-term or long-term, refinance
loans and purchased loan
participations are eligible.
Refinance loans for housing projects
are eligible if equity proceeds are
used to rehabilitate the project or
to preserve affordability for
current residents. Advances may also
be taken to support the purchase of
mortgage revenue bonds or
mortgage-backed securities if all of
the loans financed by such bonds or
backing the securities can be shown
to meet the eligibility requirements
of the CIA program.
Please read below, or see the
Residential Lending Advance Request
for Funds form for further
instruction, including Definitions.
Call the Community Investment
Department at 1.800.544.3452, ext.
1173 for assistance in completing
the request form.
CIA Advantages
-
Provides affordable housing and
promotes economic development
-
Can be used in certain
geographies regardless of the
income of the borrower
-
Reduces interest rate risk of
long term advances
-
Fixed rate advances from one
year to 20 years
-
Priced below corresponding
regular advance rates
-
Minimum borrowing amount
$100,000
What loans may
qualify?
Typically, loans are eligible if
they serve low-and-moderate income
households, have affordable rents
or are originated in targeted areas.
There are several targeted area
designations, but the most commonly
used is targeted area by income.
Targeted areas include:
-
Lower income areas (115% Area
Median Income)
-
Indian Area
-
Federal Empowerment Zone
-
Federal Champion Community
-
Federal Enterprise Community
-
Military Base Closing Area
-
Brownfield Tax Credit Area
-
Community Adjustment and
Investment Area
Loans may also be qualified by
Disaster Declaration. Members with
projects located in a
Federal
Disaster Area are eligible for
advances which are used to help
finance loans on residential
property to cover repairs or losses
related to the disaster. Loans must
be originated within 18 months of
the Federal Disaster Declaration.
Residential loans would not need to
meet other defined targets. A member
must provide a concise project
description in their
Residential
Lending Advance Request for Funds to
demonstrate that a project is
related to the disaster. See
Federal
Disaster Areas for further
information.
All loans used to qualify for
CIA must be originated
within three months of the date of
an advance (a “Closed Loan”), or a
member may take an advance based on
an estimate of loans to be closed (a
“Loan to be Closed”). If the latter,
a member must originate qualifying
loans within 12 months of the date
of the advance. At the time of the
advance, or at the end of 12 months,
as applicable, the member must
provide the Bank information to
qualify the loans for the advance.
See the
Residential Lending Advance
Request for Funds form for further
instruction, including Definitions,
or call the Community Investment
Department at 1.800.544.3452, ext.
1173 for assistance.
How is a request for funds made?
The member will submit a Residential
Lending Advance Request for Funds to
the Community Investment Department
with each application. The form must
be complete and information
certified by signature of a staff
person at the member authorized to
apply for advances. Please provide
at least 24 hours for the processing
of a request.
To apply, see the
Residential
Lending Advance Request for Funds
form. Call the Community Investment
Department at 1.800.544.3452, ext.
1173 for assistance in completing
the request form.
What are
information
requirements?
Information collected to qualify a
loan for a CIA advance includes:
-
Borrower name or loan number
-
Borrower (project) street
address
-
Loan closed date
-
Loan amount
-
Concise project description
-
Borrower income, if Qualified by
Income
-
Rent schedule including number
of units and maximum rent, if
Qualified by Rent
This information will be
collected with the Request for Funds
if the member is using “Closed
Loans”. If a member uses “Loans to
be Closed”, the Bank will follow up
with the member after 12 months to
obtain this information.
Examples
