The Federal Home Loan Bank of Boston’s ( the Bank) Housing and Community Investment Department earlier this year held focus groups with members and housing developers to assess the challenges key stakeholders are facing in developing affordable housing in New England communities.

The meetings came in the aftermath of the severe credit and housing crisis and a surge in foreclosed properties that led to restricted funding for affordable initiatives. The Bank will incorporate information garnered in the focus groups into its Community Lending and Affordable Housing Program Implementation Plan for 2010.

The Bank held two forums — one in April focusing on the concerns of member financial institutions, and a second, in May, focusing on issues of concern to housing developers. The focus groups included representatives from the six New England states.

Challenges identified by members included the impact that foreclosures, diminished funding for nonprofit organizations, and the slowdown in the economy has had on their institutions and the communities they serve.

Issues of concern for members in order of importance were the need for a strong Equity Builder Program (EBP); additional financing for the Neighborhood Stabilization Program (NSP) and other nonprofit programs; the creation of a secondary market for low- to moderate-income loans; and guarantees and risk-sharing programs for first-time home-buyer and other loan programs.

Issues identified by housing developers in order of importance included the impact of the recession on affordable housing development; the lack of pre-development funding; the shrinking availability of low-income housing tax credits; and intense competition from private investors for foreclosed properties in their communities. Priorities identified by housing developers included the need for more pre-development funding; enhanced communication with member financial institutions; low-income housing tax credit guarantees; grant programs for community development; cash advance programs/developer fees; and funds to help NSP-funded groups compete more effectively with cash investors to acquire foreclosed properties.

“In response to the information gathered in the focus groups, the Bank plans to take a balanced approach, providing assistance to stakeholders that takes into account the Bank’s current financial restraints,” said Kenneth Willis, the Bank’s vice president/housing and community investment.

Mr. Willis identified a number of actions the Bank has taken to support the needs of members and developers, including the allocation of $3 million in funding from recaptured Affordable Housing Program (AHP) funds to provide supplemental AHP and EBP rounds in 2009.

Mr. Willis said the Bank also plans to hold additional forums on low-income housing tax credit opportunities as well as further explore the viability of guarantees for low-income housing tax credits and first-time home-buyer programs.