Federal Home Loan Banks
The Federal Home Loan Banks (FHLBanks) are a system of 11 regional banks established by Congress in 1932 to provide a reliable source of liquidity for member financial institutions supporting housing finance and community development across the United States. According to the system's website at fhlbanks.com, the FHLBanks are government-sponsored enterprises that provide low-cost funding advances and other financial products to member banks, credit unions, insurance companies, and community development financial institutions in all 50 states, the District of Columbia, and U.S. territories. The FHLBank System is jointly regulated by the Federal Housing Finance Agency, which oversees the safety, soundness, and mission achievement of the 11 regional banks that collectively comprise one of the largest wholesale funding providers in the U.S. financial system.
Each of the 11 regional FHLBanks — located in Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, and Topeka — serves a specific geographic district and is independently capitalized by its member institutions, which are required to hold stock in their regional FHLBank as a condition of membership. According to fhlbanks.com, the system provides more than $1 trillion in combined assets and serves as one of the largest sources of wholesale credit for U.S. financial institutions, enabling banks, thrifts, credit unions, and insurance companies to borrow at competitive rates using their mortgage and other eligible loan portfolios as collateral. The FHLBanks' primary products include secured advances to members, letters of credit supporting member obligations, and mortgage purchase programs that support the liquidity of the primary mortgage market.
The FHLBanks also support community investment through the Affordable Housing Program, which allocates a portion of each FHLBank's annual net income to subsidize the acquisition, construction, and rehabilitation of affordable housing for low- and moderate-income households. According to fhlbanks.com, the FHLBank System has provided more than $7 billion in AHP grants since the program's inception in 1990, making it one of the largest private sources of grant funding for affordable housing in the United States. The system's unique cooperative structure, government charter, regional bank organization, and dual mission of supporting financial institution liquidity and affordable housing finance make the Federal Home Loan Banks a foundational and distinctive element of the U.S. housing finance and community development infrastructure.