What are Community Development advances?
Community Development advances are discounted loans available for financing eligible affordable-housing, economic-development, and mixed-use initiatives.

Who can apply for a Community Development advance?
Only member financial institutions of the Federal Home Loan Bank of Boston can apply for a Community Development advance. There are three applications: one for affordable housing, one for economic development, and one for mixed-use initiatives. Applications are available online.

How do Community Development advances differ from the funds provided through the Affordable Housing Program?
Community Development advances differ from Affordable Housing Program (AHP) funds in several ways.

AHP funds (which can be awarded as grants, deeply subsidized advances, or a combination of both) can only be used to finance affordable-housing initiatives. Community Development advances can be used to support both housing and economic development, and generally serve a higher-income population than that served by the AHP.

While members must compete for AHP funds (which are awarded through two rounds per year), Community Development advances are continuously available.

The AHP is funded by 10 percent of the Bank's net earnings and, therefore, can provide grants and deeply subsidized advances. The Community Development advance is one of the Bank's credit products and provides discounted funding at roughly the Bank's costs of funds.

What is an economic-development initiative?
Many types of economic-development initiatives may qualify for a Community Development advance. They include:

• Commercial initiatives, such as shopping centers, office buildings, and retail stores;
  
  
• Industrial and manufacturing initiatives, such as factories, bakeries, warehouses, and assembly plants;
  
  
• Public-facility initiatives, such as buildings and vehicles for police and fire departments;
  
  
• Social-service initiatives, such as office space for nonprofits, program facilities, and day-care centers; and
  
  
• Infrastructure projects, such as roads, sidewalks, utilities, and sewers.

What is a mixed-use initiative?
A mixed-use initiative combines economic development and housing. To be eligible for a Community Development advance, the economic-development component of a mixed-use initiative must meet at least one of the eligibility criteria for an economic-development initiative. There are no eligibility requirements for the housing portion of a mixed-use initiative.

I want to use a Community Development advance to fund a program that provides one- to four-family mortgages. Are there any special requirements?
Yes. Please include materials that describe your bank's special mortgage program, including its underwriting requirements and any special features, such as higher loan-to-value ratios or lower fees or interest rates. You must be able to track and report on loans made under the program.

What kinds of Community Development advances are available?
Three kinds of Community Development advances are always available: Classic, Member-Option, and Amortizing. Other Community Development advances may also be available. Members should contact the Housing and Community Investment Department, at housing@fhlbboston.com or 1-888-424-3863, for more information.

What maturities are available?
Community Development advances have maturities of one month or longer.

Are there any reporting requirements?
No. The Bank does not require annual reporting on Community Development advances. However, it reserves the right to monitor compliance with the certifications made in the application for the advance.

Are there any restrictions on the use of Community Development advances?
Yes. Members must take down a Community Development advance within 12 months of its approval, unless the application included an approved request for a longer takedown period. If a member is unable to take down the advance within the specified period, the member may submit a written request for an extension. Requests for extensions will be considered on a case-by-case basis.

In addition, when making a loan using a Community Development advance, the member's spread on the loan may not exceed its standard spread on similar loans.

Is there a limit on the amount of Community Development advances available to each member?
Yes. Each member is limited to an amount equal to the greater of $10 million, 100 percent of its average amount of capital stock held in the previous year, or 15 percent of the its average balance of advances outstanding in the previous year. A computation of the funds available to a member is available online.

How do I learn more about Community Development advances?
For other questions about Community Development advances, please see the Community Development advances section of this site or contact the community investment manager who serves your area.