FALHFA Conference Whats New with our Federally Chartered Partners - - PowerPoint PPT Presentation

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FALHFA Conference Whats New with our Federally Chartered Partners - - PowerPoint PPT Presentation

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FALHFA Conference Whats New with our Federally Chartered Partners and Other Sponsors? Federal Home Loan Bank of Atlantas Products and Services Art Fleming, Senior Vice President, Director of Community Investment Services Leah Douglass,

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FALHFA Conference

What’s New with our Federally Chartered Partners and Other Sponsors?

Federal Home Loan Bank of Atlanta’s Products and Services Art Fleming, Senior Vice President, Director of Community Investment Services Leah Douglass, Vice President, Sales and Trading Operations Manager Friday, July 13, 2018

  • St. Petersburg, FL
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Our Discussion Today

  • Who Are We?
  • How can HFA’s become Members?
  • How can We Assist Local HFAs in achieving business objectives?
  • Community Heroes Structured Partnership
  • How can We Help?
  • Q & A

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FOR THOSE PERMISSIONED

FHLBank Atlanta Who Are We?

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FHLBank System

Over 80 Years of Helping Institutions Grow and Prosper

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FHLBank System

FHLBank System

Increase and expand the availability of funds for residential mortgage and community development lending nationwide Provide wholesale products and services to approximately 7,000 member financial institutions

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FHLBank Atlanta Shareholders As of December 31, 2017

881 Total Shareholders 534 217 76 31 16 7

Commercial Banks Credit Unions Savings Banks Insurance Companies Housing Associates CDFI Non-Depository

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FHLBank Atlanta – Financial Highlights December 31, 2017

  • Total Assets: $146.6 billion
  • Total Advances (loans): $102.2 billion
  • 2017 Net Income: $349 million
  • Retained Earnings: $2.0 billion
  • Fourth Quarter 2017 Dividend: 5.16%
  • Total Membership: 881 institutions

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FHLBanks Products and Services

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Affordable Housing Program (AHP)

  • Real estate funding for the

acquisition, development, construction, or rehabilitation

  • f affordable housing
  • Ownership or rental
  • Single-family or multifamily

Letters of Credit

  • Provide credit enhancement on

bonds for residential and economic development

Advances

  • Provides FHLBank

members low-cost financing for lending in their communities

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Working with Housing Finance Agencies

How can HFAs become Members?

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Housing Finance Agencies (HFAs) Eligibility as Housing Associates

Housing Associate of the FHLBanks is defined as…

Housing Finance Authorities - a public agency, authority, or publicly sponsored corporation that serves as an instrumentality of any state

  • r political subdivision of any state, and functions as a source of

residential mortgage loan financing in that state

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Housing Associate Eligibility Requirements

  • Approved by HUD as a “mortgagee” under Title II of the National

Housing Act

  • Chartered institution having succession
  • Subject to the inspection and supervision of some governmental

agency

  • Principal activity in the mortgage field must consist of lending its
  • wn funds
  • The financial condition is such that advances may be safely made
  • The authority to borrow funds, pledge collateral, and deposit funds

with the FHLBank

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Value and Benefits of Becoming a Housing Associate

  • Access to all liquidity products without purchasing stock

– Short-term warehouse – Term funding – Fixed- and variable-rate

  • Access to Letters of Credit/AAA-rated bond credit enhancement

product

  • Cash management, including safekeeping services
  • Interest-rate risk management tools

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Affordable Housing Products and Services

How can we Leverage our Products and Services to Advance Your Business Objectives?

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Event Sponsorship LOC for Multi- family Bods 4% LIHTC Warehousing financing mortgage loans to facilitate HFA single-family programs Balance Sheet Management Structured Partnerships

Meeting the Unique Business Needs of Housing Finance Agencies

Miami Rescue Mission, Miami, FL Lakeside Terrace Senior Apartments Winter Haven, FL Waterfront Rescue Mission Pensacola, FL

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What is the Affordable Housing Program (AHP)?

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A Unique Offering to Shareholders and the Community

Economic Development Program AHP Competitive Program Community Investment Program AHP Set-aside Program

  • Real estate finance “equity” enables residential development

and/or rehabilitation

  • Enable Shareholders to grow business, reduce transactional

risk and achieve CRA regulatory objectives

  • Capitalized via 10% of Net Earnings

10 percent

$734.9 million since 1990

  • 116,276 units
  • Leverage ratio = 1:14

$199.9 million since 1997

  • 29,468 units
  • Leverage ratio = 1:22

$8.3 billion

  • Low-cost CICA advances for

community economic & affordable housing

As of Mary 2018

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AHP Competitive

Multi-family Rental; Supportive Housing; Single-Family projects

  • Up to $500,000
  • Competitive application
  • Each FHLBank has scoring criteria
  • Accessed only via Shareholder

Developer/Builder Driven

  • New construction
  • Rehabilitation
  • Multifamily
  • Single-family
  • Acquisition
  • Construction and/or permanent financing

AHP Set-Aside

Home Purchase or Home Rehabilitation

  • $5,000 - $15,000
  • Down payment, closing cost, etc.
  • Generally first come/first served
  • Accessed only via Shareholder

Mortgage Professional Driven

  • 9 products

First-time homebuyer; Foreclosure Recovery; Disaster Recovery; Veterans Purchase; Veterans Rehab; Community Partners; etc. Rental and Ownership Development Mortgage Purchase and Home Rehabilitation

What is the Affordable Housing Program (AHP)?

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Low-Income Housing Tax Credit (LIHTC) Non-LIHTC multi-family Mixed-use Supportive Housing

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AHP Competitive Program (Rental)

Reduces project debt service

  • Which thereby permits a reduction

in project rents to enable affordability

Use of Funds

  • Acquisition
  • Rehabilitation
  • New construction and/ or
  • Permanent funding

La Joya Villages | Lake Worth, FL AHP Investment: $500,000 55 Rental Units Total Development Cost: $12,206,957 Special Use: Veterans Housing

Rental Transaction Types

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FHLBank Atlanta Affordable Housing Program (AHP) Scale and Impact Profile December 2017

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AHP Scale and Impact Profile Low Income Housing Tax Credit (LIHTC) AHP Financing December 2017

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AHP Scale and Impact Profile State of Florida

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As of December 31, 2017

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Purchase Products Rehabilitation Products

First-time Homebuyer Product Community Partners Product Returning Veterans Purchase Product Foreclosure Recovery Product Veterans Purchase Product Veterans Rehabiliation Product Returning Veterans Rehabiliation Product Community Rebuild and Restore

Structured Partnership Products

FHLBank Atlanta’s AHP Set Aside Products

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AHP Scale and Impact Profile Homeownership AHP Financing December 2017

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Services Expanding Your Eligible Customer Base FHLBank Atlanta’s AHP Income Limit Methodology and Calculator

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  • New Methodology and Calculator

implemented in 2015

  • Selects the greatest of four

calculation methodologies

  • Point-and-click calculator

automatically provides the highest income limit

  • 548 of 599 counties in the Bank’s

district (91%) now have a higher income limit!

FHLBank Atlanta Income Calculator Tool https://cis.fhlbatl.com/ahp/utilities.portal Highlands County, FL – Example above based on 4 person household

AHP Income Limit “Under Old Methodology” AHP Income Limits “Under New Methodology” % Higher than Old Methodology

$38,700 $47,200 22%

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A confirming LOC – sometimes called a ‘wrap’ – can help secure improved credit terms for community-focused bonds, enhancing the bond’s credit rating, reducing borrowing costs, and improving marketability

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FHLBank Atlanta Beneficiary Shareholder’s Customer

Shareholder provides agreement, application, and LOC fee Confirming LOC Original Letter

  • f Credit

Shareholder

Credit Relationship Underlying Transaction

Letters of Credit (LOCs)

Confirming Letter of Credit

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Using LOCs to Enhance Housing and Economic Development

  • The debt is structured as taxable (non-residential projects) or tax-

exempt or taxable (residential)

  • Eligible bond activities include:

– General – Education – Transportation – Housing – Development

  • Utilities
  • Electric Power
  • Public
  • Healthcare
  • Environmental
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A Federal Home Loan Bank of Atlanta Product

Community Heroes

Grant Funding Initiative

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Description

New Initiative

  • Local structured partnerships focused on Community Heroes
  • Revitalization and stabilization objectives

Structured Partnership Entities

  • Municipalities
  • Counties
  • States
  • Housing Finance Agencies (HFAs)

Targeted Consumers

  • Community Heroes earning greater than 80 percent up to 120 percent area median

income (AMI) – Law enforcement officers – Public school educators – Firefighters – Other first responders

FEDERAL HOME LOAN BANK OF ATLANTA 27

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Description

Community Heroes

Leveraging up to $13.5 million in additional grants from local sources to support home purchase activities

Households must be greater than 80 percent AMI and shall not exceed 120 percent

  • f AMI

Local Structured Partnership entity (HFA, state, or local municipality) must provide at least 3 to 1 match All funding shall be extended exclusively via FHLBank Atlanta shareholder financial institutions Local entity will manage local structures, intake, processing, and funding

Up to $4.5 Million in Grants from FHLBank Atlanta $18 Million in Total Funding Available

FEDERAL HOME LOAN BANK OF ATLANTA 28

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Description

Funding Access and Availability

  • Accessible for all shareholders throughout the FHLBank Atlanta district
  • Access to every state in FHLBank Atlanta’s district
  • Encourages local and government initiatives in both urban and rural

communities Structured Partnership

  • Generally 18 month Memorandum of Understanding (MOU) term
  • MOUs include a “use it or lose it” provision where Bank funds committed will

be released back to the Bank for redeployment to another structured partnership if not used by the sunset date

  • Proposals accepted as long as there are available funds
  • Proposals to be submitted by local entities

FEDERAL HOME LOAN BANK OF ATLANTA 29

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Use of Funds

Funding Eligibility Requirements Guidelines Use of Funds

  • Purchase of existing home
  • First mortgage principal reduction
  • Down payment, closing costs
  • New construction or rehabilitation
  • Funds can be used during construction or rehabilitation for purchase
  • Funds can be used during rehabilitation

Leveraging

  • The 3:1 leveraging ratio and matching requirements prevail at every

funding stage of the project

  • Evidence of ratio and matching requirement
  • Construction settlement statement
  • Homebuyer mortgage settlement statement

Construction Lender

  • All FHLBank Atlanta shareholders are eligible to be the first mortgage

lender and access the end loan funds, regardless of whether shareholder is also the construction lender

Properties

  • Owner-occupied, primary home
  • 1-4 family properties
  • Townhouses, condos
  • Foreclosed properties
  • Cooperatives
  • Manufactured housing

FEDERAL HOME LOAN BANK OF ATLANTA 30

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Purchase/Homebuyer Eligibility

Purchase/Homebuyer Eligibility Guidelines Properties

  • Owner-occupied, primary home
  • 1-4 family properties
  • Townhouses, condos
  • Foreclosed properties
  • Cooperatives
  • Manufactured housing

First Mortgage Lender

  • All first mortgages under the structured partnerships are to be originated and

closed by FHLBank Atlanta shareholders

Borrowers

  • Current full-time municipal law enforcement officers, K-12 public school

educators, firefighters, and other first responders

  • First-time or non-first-time homebuyers are eligible

Household Income

  • Greater than or equal to 80.01 percent and less than or equal to 120 percent
  • f the county AMI or the state median family income, adjusted for family size

as published by HUD, whichever is higher, using the greater of FHLBank Atlanta’s income methodology

FEDERAL HOME LOAN BANK OF ATLANTA 31

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Timeline

June 2018

Launched on June 10, 2018 at the US Conference of Mayors Annual Meeting Boston, MA Shareholder and stakeholder announcements

November 2018

Proposals accepted starting November 5, 2018

December 2018

Review any proposals received on a quarterly basis starting December 3, 2018

June 2018 through December 2018

FEDERAL HOME LOAN BANK OF ATLANTA 32

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Structure of Proposal

Details Readiness

  • The local entity’s immediate access to the match funds
  • The local entity’s authorizations and resolutions to move forward

Level of Commitment from Local Entity

  • Level of local leadership commitment

Leveraging

  • Minimum 3:1 match requirement per unit
  • Additional consideration if greater than 3:1 match per unit
  • Other financing committed by the local entity including debt

(development funding only)

Capacity (Operational)

  • Local entity’s demonstrated ability to execute as per a joint operational

workflow that streamlines the application, processing, and funding requirements to create ease of use for the Bank’s shareholders

Shareholder Support

  • Availability and interest of multiple shareholders in the market to

participate in closing transactions under the proposed structured partnership

FEDERAL HOME LOAN BANK OF ATLANTA 33

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Arthur L. Fleming Senior Vice President Director of Community Investment Services afleming@fhlbatl.com Office: 404.888.8359 Leah Douglass Vice President, Sales and Trading ldouglass@fhlbatl.com Office: 404.888.8453 / Mobile: 404.210.1039

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FHLBank Atlanta’s HFA Team