The Federal Home Loan Bank of Boston (the Bank) has awarded $3.0 million in the form of grants, loans, and interest-rate subsidies through its 2009 Affordable Housing Program (AHP). These funds will be used to finance 79 units of affordable rental and ownership housing for households earning at or below 80 percent of area median income in three New England states. Of that amount, $2.6 million will be awarded as a grant or subsidy.

“This marks the twentieth consecutive year the Bank has awarded grants and subsidies under the AHP,” said Edward A. Hjerpe III, the Bank’s president and CEO. “The funds committed — more than $186 million — have led to more than 22,300 housing units for very low-, low-, and moderate-income households, and have helped stimulate economic development throughout New England.”

Massachusetts Congressman Barney Frank added, “This welcome announcement by the Federal Home Loan Bank of Boston of the latest Affordable Housing Program underlines two impor tant points. First, it shows the importance of public-private cooperation in meeting an important social need. Second, it is one more example of the constructive role that has been played by community banks.”

In addition, Congressman Mike Michaud of Maine said, “With the overall decrease in housing construction, our country has experienced severe job losses in the building and trades sector. At the same time, we have seen the demand for affordable housing increase. This funding represents an important investment in our state and will help address both of these challenges.”

AHP funds are used to create or preserve affordable housing and help pay construction, acquisition, or rehabilitation costs. Member financial institutions work with local developers to apply for AHP funding, which is awarded through a competitive scoring process. The application deadline for next year’s AHP awards is October 1, 2010.

In 2009, the Bank offered two limited affordable-housing funding rounds — one for the AHP and the other for the Equity Builder Program (EBP).

The Bank announced earlier in the year that it would not be contributing to the AHP and EBP in 2009 because of an annual net loss of $73.2 million in 2008, primarily based on a write-down of $339.1 million in other-than-temporary impairment charges on its private-label mortgage- backed securities. The Bank’s AHP and EBP are funded directly from prior year net profits. However, the availability of a limited amount of recaptured and deobligated funds from previously awarded AHP initiatives that were unable to move forward allowed the Bank to allocate approximately $3.5 million to support the programs in 2009 — a minimum of $2.0 million to the AHP, and $1.0 million to the EBP.

Because the AHP funding was limited, the Bank made a number of technical changes that had an impact on the funding application process. While a member could not submit applications with requests for more than $1.6 million in total AHP subsidy, the total maximum subsidy per application remained at $800,000, of which $500,000 could be applied for as a direct subsidy grant.

The $1.0 million subsidy reserved for the EBP was available to members through the online application and enrollment pool. For this limited funding round, separately chartered members could apply for an enrollment cap of up to $100,000. Members made enrollment requests of up to $10,000 per household to this general pool of funds to assist income-eligible households on a first-come, first-served, home buyer-by-home buyer basis. Funds were available until they were fully reserved, approved, and disbursed.