The Federal Home Loan Bank (FHLBank) of Chicago's Community First Fund (CFF), a revolving loan fund that provides direct support to community development financial institutions (CDFIs), is an example of how the FHLBank System can support affordable housing and community development. The program helps recipients expand their capacity for affordable housing and economic development lending, both of which are central to FHLBanks’ mission. This model can be replicated across all 11 FHLBank districts.

Why This Matters

Reforming the FHLBank System to inject more capital into underserved communities can facilitate greater supply of affordable housing amid a worsening housing crisis.

Key Takeaways

• The FHLBank of Chicago’s CFF is a proven vehicle to drive impactful, mission-based work that efficiently and effectively meets the local needs of its district.
• The program can be expanded and improved across the system with voluntary contributions from other FHLBanks or serve as a vehicle for traditional bank members to meet their Community Reinvestment Act requirements.
• The CFF could explicitly incentivize innovative solutions to address the local district problems described in each bank’s target community lending plan.
• The Federal Housing Finance Agency and FHLBanks’ local advisory committees can encourage banks to adapt the CFF model to address their own district’s needs.
• FHLBanks can use the CFF model to expand the supply of affordable housing and meet economic development challenges, as well as create CDFI enterprise-building platforms that serve the needs of their traditional small bank members.