The proposed amendment makes a number of technical and operative changes, and in some cases, codifies existing practices regarding the operation of the Bank's AHP.

The Federal Housing Finance Board (Finance Board), the regulator of the Federal Home Loan Banks (FHLBanks), is proposing to amend the FHLBanks' Affordable Housing Program (AHP) regulation. The intent behind the proposal is to remove prescriptive requirements, clarify certain operational requirements, remove certain authorities, and otherwise streamline and reorganize the regulation. Among other issues, the amendment:

• Incorporates additional definitions into the regulation;
  

• Separates the operational provisions of the competitive AHP and homeownership set-aside programs - in the case of the Federal Home Loan Bank of Boston (the Bank), the Equity Builder Program (EBP);
  

• Gives FHLBanks the option to make available AHP subsidies to loan pools and revolving loan funds;
  

• Prohibits an FHLBank from requiring AHP funds to be used in its district and eliminates an FHLBank's ability to provide scoring points for in-district applications;
  

• Removes the provision that allows an FHLBank to accelerate AHP contributions from the following year into the current year;
  

• Allows FHLBanks to monitor AHP projects using a risk-based methodology; and
  

• Mandates that an FHLBank's set-aside program (the Bank's EBP) require members to use one-third of those funds only for first-time home buyers.

The proposed amendment makes a number of technical and operative changes, and in some cases, codifies existing practices regarding the operation of the Bank's AHP. The Bank calls attention to four specific changes that may impact participation in the AHP:

• The Bank will be prohibited from requiring that AHP funds be used exclusively in New England, and scoring points for in-district applications will be eliminated.
  

• The Bank would be allowed to accept loan-fund and loan-pool applications for AHP funds.
  

• The Bank would be allowed to monitor AHP projects using a risk-based methodology.
  

• The Bank would not factor into feasibility studies the market value of in-kind donations and volunteer professional labor.

The Bank is the only one of the 12 FHLBanks that restricts its use of AHP funds to in-district housing initiatives. Two others provide points for in-district AHP applications but will be prohibited from doing so in the future. Historically, a little more than three percent of all AHP funds awarded have gone to initiatives located outside the district that originated the award. In fact, New England has benefited from several AHP awards made by the San Francisco, Cincinnati, and New York FHLBanks.

The proposed amendment would expand the FHLBank's authority to allow access to the AHP by loan funds and loan pools, increasing the range of eligible means of supporting affordable housing through the AHP. The Finance Board has requested comments on how loan-fund or loan-pool participation in the AHP might be structured. The Bank encourages loan-fund and loan-pool administrators to share their perspectives with the Finance Board and the Bank.

The amendment would also allow the Bank to monitor AHP projects using a risk-based methodology. In addition, it would eliminate the Bank's consideration of the market value of in-kind donations and volunteer professional labor, which would directly impact the feasibility review of Habitat for Humanity projects. There are no substantial changes to the existing AHP scoring framework.

The Finance Board has requested written comments on the proposed rule amendment by April 27. The document can be downloaded directly from the Finance Board's web site at http://www.fhfb.gov/GetFile.aspx?FileID=4397.

The Bank encourages all interested parties to read the proposed rule amendment and send comments in writing to the Finance Board. Comments may be submitted by e-mail: (comments@fhfb.gov), fax: 202-408-2580, or mail: Federal Housing Finance Board, 1625 Eye Street, NW, Washington, D.C. 20006, Attention: Public Comments.

In addition, comments are welcome about what might be missing from the proposed amendment, and what could make the AHP's policy goals and administration more efficient and relevant in terms of housing priorities. For further information, please contact anyone in the Housing and Community Investment Department at 1-888-424-3863.