The FHLBank Chicago has recently launched its Low-Income Housing Tax Credit (LIHTC) Collateral Pilot Program. This program allows members to increase the value of their pledged collateral for up to $300 million in qualifying mortgage loans on multi-family housing projects that utilize LIHTCs.
While all members of FHLBank Chicago are eligible to participate, a portion of the funding, specifically $200 million, will be reserved for smaller institutions with assets under $1.46 billion including CDFIs. The goal is to encourage and support lending towards affordable housing for low-income individuals and families through various financial institutions such as banks, credit unions, insurance companies, CDFIs and eligible housing associates.
According to Michael Ericson, President and CEO of FHLBank Chicago: “Our members are dedicated towards addressing the need for affordable housing in their communities. With our new LIHTC Collateral Pilot Program we aim at increasing available funds for LIHTC loans within our district by enhancing the value of this important asset class while also providing much-needed liquidity.” This initiative aligns with their mission statement which focuses on promoting economic development by supporting community investment activities such as affordable housing initiatives.
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