Final AHP Rule: Changes to Owner-Occupied Projects   

October 17, 2019 

For nearly 30 years, the Affordable Housing Program (AHP) has successfully helped Federal Home Loan Bank (FHLBank) members and their partners create affordable housing opportunities in the communities they serve. On November 28, 2018, the Federal Housing Finance Agency (FHFA) published its amended regulation (Final AHP Rule), giving the FHLBanks greater flexibility to identify and respond to the unique needs of their Districts. For an overview of the Final AHP Rule and comprehensive list of changes, visit our AHP Modernization webpage.   

The Final AHP Rule necessitates three significant changes effective January 1, 2020 for certain owner-occupied projects awarded through the competitive AHP. These changes are summarized below.
  1. Retention agreements for rehabilitation-only owner-occupied units will no longer be allowed. Furthermore, any outstanding retention agreements for rehabilitation-only owner-occupied units are not enforceable.
  2. The repayment worksheet for acquisition-only and acquisition/rehabilitation units has been updated to reflect:
    • The new net proceeds calculation,
    • A de minimis exception to subsidy repayment when the amount subject to repayment is $2,500 or less, and
    • The use of a proxy method based on sales price to determine whether the subsequent homebuyer is a low- or moderate-income household. This may result in an exception to repayment.
We encourage members and sponsors to review our brief recorded video providing guidance on how to complete the repayment worksheet. Members and sponsors may also refer to the instructions tab of the repayment worksheet.  
  1. The retention agreement for units located in Illinois and Wisconsin has been updated. This new retention agreement is required for all acquisition-only and acquisition/rehabilitation units completed on or after January 1, 2020, even if the AHP grant is being funded from an earlier program year. Since this retention agreement is for units in Illinois or Wisconsin only, please review and update any retention agreement used for units in other states.

Please contact Community Investment at 312-565-5824 or with any questions.

Federal Home Loan Bank of Chicago
200 East Randolph Drive
Chicago, IL 60601
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