The Federal Home Loan Banks (FHLBanks) are a group of 11 independent, member-owned cooperative regional banks established by Congress in 1932 to promote financial stability and help revive the housing market following the Great Depression. The FHLBanks’ core mission is to provide reliable liquidity to member financial institutions—which include commercial banks, savings institutions, insurance companies, credit unions, and community development financial institutions—to support housing and community development.

FHLBanks fulfill their mission by offering members collateralized loans (i.e., advances), standby letters of credit, and mortgage purchases backed by private capital. The FHLBanks are also required by law to contribute 10 percent of their annual net earnings to their Affordable Housing Program to support affordable housing development and expand access to homeownership. Recently, the FHLBanks have increased funding for the program beyond the statutory minimums. The FHLBanks also operate multiple voluntary programs that offer tailored support for local housing and community needs.

Despite their long history and significant role in the US economy, and housing finance in particular, research on the FHLBank System remains relatively limited. The Urban Institute has sought to fill this gap through rigorous data analysis that evaluates the system’s role and impact. Our work has explored how the FHLBanks affect member liquidity and financial stability, the relationship between advances and members’ lending activities, and the scope and effectiveness of mission-related programs.