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  • Comment Detail

  • Date: 05/31/18
    First Name: Amanda
    Last Name: Novak
    Organization: N/A
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AA83

  • Comment

    Thank you for the opportunity to comment on the FHFA’s proposed amendments to the AHP regulation. I am a member of the FHLB of Des Moines Advisory Board and a real estate developer of affordable housing with over 13 years of experience in the field. A majority of my multifamily affordable housing investment has been completed in Minnesota and Iowa.

    First and foremost, I am disappointed in the direction the FHFA is taking the AHP program. It was my understanding that the goal of the FHLBs was to modernize the AHP program, and the current rules add unnecessary complexity and stringency in an already complicated funding environment.

    Examples of this include the increased sponsor review, and the loan modification process. Many tax credit investors could interpret the proposed rule language as shifting the AHP program from a grant program to a recourse loan. This would impact the funding available through the tax credit program as non-recourse loans reduce tax credit basis in projects.

    Second, in reviewing the proposed changes, it seems that the regulator is placing the AHP program in the same bucket as Fannie and Freddie. This is a major misstep, as the AHP is a gap finance tool and not a finance platform and therefore should not be held to the same standards of FNMA/FHLMC and their duty to serve.

    Third, AHP funds need to be able to coordinate with others to the max extent possible. The proposed statutory and regulatory priorities significantly complicate how AHP funds are allocated and limit how responsive AHP can be to local, and changing housing needs. It has been my experience that a typical affordable housing development has between 5 and 15 sources of funds. It has been our experience in Minnesota that the AHP subsidy is equal or less than 10% of the total project sources with an average multifamily development budget at $7 million. The ability of the Advisory Council’s to propose local priorities allows the AHP funds to be nimble to shifting affordable housing goals.

    Finally, as an Advisory Council member, I would be remise, if I did not comment on how the AHP proposed rule compromises the value of the input, we, as an Advisory Council provide to the Federal Home Loan Bank’s Board of Directors. We know that the Board relies on our local housing expertise to inform how AHP can be most responsive to local priorities. Without having a local voice, the AHP program could fall on deaf ears and lose its ability to positively impact the communities our member banks serve.