2017 Community Lending Plan Federal Home Loan Bank of Indianapolis

Transcription

1 A Place t Call Hme 2017 Cmmunity Lending Plan Federal Hme Lan Bank f Indianaplis

2 FHLBI - Cmmunity Lending Plan : Backgrund The CICA Regulatin, 12 C.F.R. Part 1292, requires each FHLBank t develp a Cmmunity Lending Plan. This plan is apprved by the FHLBank s bard f directrs and requires each FHLBank t: 1. cnduct market research in its district; 2. describe hw it will address the identified credit needs and market pprtunities; 3. cnsult with its Advisry Cuncil, members, nn-member brrwers, and public and private ecnmic develpment rganizatins in its district; and 4. establish quantitative cmmunity lending perfrmance gals. The CICA regulatin defines cmmunity lending as prviding financing fr ecnmic develpment prjects r activities fr targeted beneficiaries. The FHLBI s Strategic Plan, the 2017 Affrdable Husing Prgram Implementatin Plan, and this plan will prvide a cmprehensive apprach t serving ur members using all f the FHLBI s prducts and services. The Strategic Plan fcuses n fur strategies fr prgress that are designed t deliver results while carefully balancing ur risk appetite: prmting advances, managing capital, grwing MPP slutins, and prmting cmmunities. This apprach is highlighted in ur missin as fllws. Missin T help families affrd husing by wrking with member financial institutins in Indiana and Michigan t meet their funding needs fr husing, ecnmic grwth and jb creatin in their cmmunities. The FHLBI als prvides grants fr building and rehabilitating lw-incme husing. The FHLBI strives t deliver a market return n the equity investment by its member/wner institutins. Strategic Objectives Prvide members with a reliable and cmpetitive surce f funding fr husing finance, cmmunity lending, asset-liability management, and liquidity. Prvide an attractive and efficient secndary market utlet fr members t sell their mrtgage lans. Create value fr members by simultaneusly meeting ur husing-riented missin, prviding an attractive return n ur members stck, and prudently managing ur risk. Prvide funding t assist lw- t mderate-incme families btain affrdable husing and t supprt ecnmic grwth and emplyment within lcal cmmunities. 2: Market Needs Assessment In planning fr the 2017 Cmmunity Lending Plan, FHLBI cntracted with the Indiana Assciatin fr Cmmunity Ecnmic Develpment (IACED) and the Cmmunity Ecnmic Develpment Assciatin f Michigan (CEDAM) t survey members and cmmunity partners. The survey was distributed t FHLBI members and partners, IACED members, and CEDAM members. There were 221 survey respndents cmpared t 85 in the 2015 survey when the survey was sent t a smaller database. Of the respnses, 26 percent were FHLBI members. Respnders were asked t identify the area f peratin f their rganizatin. The majrity f respndents, 58%, have a multi-cunty service area while 42% serve a single cunty. Survey participants were asked t list the hmewner/ptential hmewner, renter/ptential renter and nn-husing cmmunity ecnmic develpment needs fr their custmer base r cmmunity. Page 2 f 10

3 FHLBI - Cmmunity Lending Plan 2017 The tp needs fr hmewners/ptential hmewners are: The tp needs fr renters/ptential renters are: The tp nn-husing needs are: There were 117 survey respnses frm Indiana and 103 respnses frm Michigan. In terms f challenges/needs fr hmewners/ptential hmewners, there is parity between Indiana and Michigan cmmunities in the inability t cmplete needed repairs (45% in Indiana and 48% in Michigan). Lack f affrdable single-family hmes was the third issue in Indiana (41%), but secnd in Michigan (43%). On the rental side the availability f rental stck was a tp issue in Indiana (51%), but the secnd issue in Michigan (38%). Affrdability f rental husing was the tp issue in Michigan (45%), but secnd in Indiana (38%). Transit and brain drain were the tp tw nn-husing cmmunity ecnmic develpment issues in bth Indiana and Michigan. The third was infrastructure in Indiana (29%) and neighbrhd level ecnmic develpment (27%) in Michigan. Page 3 f 10

4 FHLBI - Cmmunity Lending Plan 2017 Fifty-eight FHLBI members respnded t the survey. When asked t identify the biggest challenges facing hmewners r ptential hmewners, members reprted n an inability t affrd dwn payment and/r clsing csts (19%); a lack f affrdable single family husing stck (14%); a lack f basic financial literacy (12%); and an inability t make needed hme repairs (12%). The biggest challenges facing renters were the general affrdability f rental stck (18%); a lack f affrdable rental stck (16%); and general disrepair f rental stck (12%) which crrespnds with the verall respnses. When asked t identify nn-husing cmmunity ecnmic develpment challenges in their service area, members identified brain drain/cllege graduates nt returning t the cmmunity (18%); lack f skilled labr r manufacturing jbs (14%); infrastructure repairs/develpment (10%); and transit/public transprtatin (10%) as the biggest challenges. FHLBI members were asked t identify their greatest cmmunity lending needs, identifying mrtgages, small business lending, micrcredit lending and cmmercial lans as their tp needs. The survey attempted t measure respndents familiarity with Cmmunity Investment prgrams. Of all survey participants, 26 percent were extremely r very familiar with the Affrdable Husing Prgram (AHP); 25 percent were extremely r very familiar with the Hmewnership Opprtunity Prgram (HOP); 24 percent were extremely r very familiar with the Neighbrhd Impact Prgram (NIP); and nly 15 percent were extremely r very familiar with the Accessibility Mdificatin Prgram (AMP). Participants were least familiar with AMP, with 49 percent f respndents saying they were nt at all familiar with the prgram. NIP was slightly better knwn, with 41 percent f participants indicating they were nt at all familiar with it, and HOP and AHP were unknwn t 36 percent and 35 percent f participants respectively. FHLBI members were asked why they haven t used a prduct and the mst cmmn answer was that the member wasn t sure abut hw the prcess wrks (28%). A fifth f members (20%) reprted that they didn t have enugh staff resurces t use the prgrams. Other cmmn reasns fr nt using FHLBI prducts included it being hard t identify cmmunity partners/prjects (18%) and the prduct nt addressing a business pririty (16%). These results indicate cntinued need fr the Cmmunity Lending Plan gals f cmmunicating the prgrams and training n hw t access the funds. The survey respnses als prvided valuable feedback thrugh pen-ended questins, requesting examples f successful recent cmmunity ecnmic develpment prjects. The majrity f the successful examples invlved partnerships with multiple stakehlders and layered funding surces. This feedback supprts the cmpetitive AHP scring categries that encurage leveraging AHP subsidy. The majrity f successful develpment prjects that did nt invlve husing supprted small business develpment and jb creatin in cmmunities. Areas where survey respndents prjects had the mst challenges were arund Brwnfield cleanup/envirnmental remediatin issues, gap finance, the size f the funding pls available, and understanding capital stacks/subsidy layering and making it wrk. In the next five years, it seems cmmunities need mre husing ptins fr senirs whether that is aging in place r cnstructin f new types f multifamily r single-family husing. Rapidly grwing cmmunities are aware f a need t be mindful f displacement that may Page 4 f 10

5 FHLBI - Cmmunity Lending Plan 2017 ccur as husing csts rise. The issues facing rural cmmunities are especially challenging with limited resurces, access t private and philanthrpic capital, ecnmic pprtunity, and capacity. In sme cmmunities the need t rehabilitate existing husing stck is high, but the cst f rehab cntinues t utpace prperty values. Based n identified market needs, IACED and CEDAM suggest that FHLBI cnsider: A marketing strategy fr cnnecting rganizatins with FHLBI prducts and better cmmunicating less well-knwn prducts t member institutins. Studying ways in which the timing f FHLBI prduct/prgram applicatins can better align with ther funding surces, like LIHTC, t prvide gap financing fr residential cnstructin. Develping webinars r self-paced study mdules abut each f the FHLBI prgrams and cmmn issues like gap finance, envirnmental clean-up, and making subsidy layering wrk. Seeking ways t make additinal funding available fr prgrams that supprt aging in place and develpment f affrdable husing fr senirs. Reviewing prduct criteria with rural members seeking ways t imprve rural access t capital. The Affrdable Husing Advisry Cuncil (AHAC) and Affrdable Husing Cmmittee (AHC) als prvide valuable input thrughut the year n ur district s husing and lending needs. We will cntinue t use their input and will survey members and cmmunity partners fllwing utreach and training events and as part f the planning fr the 2018 Implementatin Plan and Cmmunity Lending Plan. 3: Marketing, Outreach and Training In 2016, the Cmmunity Investment staff cntinued its cllabratin with the Marketing Department t braden the impact f all Cmmunity Investment prgrams, including CIP advances. We respnded t members needs using jint venues and training wrkshps thrughut the district t prmte FHLBI prducts and resurces. Thrugh these and ther utreach effrts, we have cntinued t increase the number f new member participants. CIP advances in 2016 exceeded the year s gal. Cllabratin with Marketing will cntinue in Cmmunity Investment staff als participate in meetings and cnferences with ther cmmunity ecnmic develpment partners such as state husing finance agencies, state cmmunity develpment trade rganizatins and ther partners. Six training sessins were ffered in March 2016, divided equally between Indiana and Michigan. In additin t prviding verview infrmatin abut the AHP, the Hmewnership Initiatives and CIP, the wrkshps included presentatins by member financial institutin representatives wh shared their experiences with cmmunity investment prducts and lessns learned. Participants were given the pprtunity t netwrk by participating in a netwrking activity. CID cnducted an survey f participants within a week f each sessin t capture feedback n the lcatin and training pprtunities. The verall respnse was very psitive, with mst tpics receiving a Very Useful rating frm a significant prtin f survey respndents. Respndents cmmented psitively abut the timing f the sessins, lcatins, and length f presentatins. The mandatry member training fr Hmewnership Initiatives was delivered via 4 webinars. The webinar training fcused n qualifying the husehld fr the prgrams and the requirements arund btaining repair bids. The webinars were well attended with 370member representatives, cmmunity partners and nnprfit rganizatins participating. Page 5 f 10

6 FHLBI - Cmmunity Lending Plan 2017 In 2016, the Cmmunity Investment staff prvided utreach t all member financial institutins and t partner rganizatins in Michigan and Indiana thrugh its extensive mailing list and each state s nn-prfit husing and ecnmic develpment trade rganizatins. Staff participated n several task frce grups r cuncils and served as panelists fr training spnsred by the state husing finance authrities and statewide husing and cmmunity ecnmic develpment cnferences. At each statewide cnference, we present a representative frm ne f ur member financial institutins with a Cmmunity Spirit Award t hnr the individual s utstanding cmmitment t affrdable husing and cmmunity ecnmic develpment. In additin, staff gave presentatins at three (3) Interagency frums thrughut the district. FHLBI staff exhibited at bth the Indiana and Michigan Habitat fr Humanity cnferences in the fall. AHP in-depth training was ffered t 2016A applicants thrugh Training n Demand ptins available thrugh members, a series f webinars, helplines, help mail, and five days f technical applicatin reviews prir t the applicatin deadline. Cmmunity Investment presentatins were als incrprated int the Member Sympsium held in each state. A series f tw frums were held at varius AHP awarded prject lcatins thrughut Michigan and Indiana t demnstrate and share best practices n creating high impact husing thrugh the cmpetitive AHP. Because f meeting rm limitatins, the frums targeted smaller audiences and were intimate, engaged discussins amng peers. A ttal f 33 participants representing members and cmmunity develpment rganizatins learned frm their peers abut the challenges faced in develping affrdable husing. Hst prjects were chsen by the specific targeted ppulatin each serves: yung adults aging ut f fster care and victims f human trafficking and dmestic vilence. Additinally, the Prter Cunty Husing Calitin hsted a cmpetitive AHP wrkshp fr area nn-prfit partners and cmmunity member banks at their newly cmpleted cmmunity center. FHLBI staff presented AHP best practices t an audience f apprximately 27 husing prviders. Several successful AHP spnsrs spke abut their applicatin prcess, the value f pre-applicatin technical reviews, and n-ging mnitring requirements and staff-prvided ne n ne technical guidance t help them prepare fr the 2017 applicatin cycle. Finally, a pilt prgram named Cmmunity Mentrs was intrduced in Nvember The pilt sessin targeted a small cmmunity utside Indianaplis where 75 cmmunity leaders cnvened t learn frm thers wh have successfully navigated the challenges f engaging cmmunity stakehlders t find enduring lcal slutins fr a variety f cmmunity and ecnmic develpment needs. Fr this event, FHLBI assembled teams frm arund the state f Indiana wh have navigated thrugh the many bstacles and challenges f building strng cmmunities. Attendees heard hw a rural cmmunity garnered supprt t bring imprtant services and resurces fr the cmmunity under ne rf. Representatives frm Evansville, IN discussed hw land banking helped revitalize a key prblem area fr the city and helped earn a Prmise Zne Award. Other rural cmmunities described hw they earned a Stellar Cmmunities designatin and put $50 millin in state resurces t wrk. Participants als heard abut placemaking, the newest apprach t cmmunity develpment which uses existing assets in strategic and inexpensive ways t create a sense f place fr all. The 2016 Cmmunity Lending Survey cnclusin t review prduct criteria with rural members seeking ways t imprve rural access t capital supprts expansin f this prgram in The 2017 utreach and training calendar will repeat successful reginal utreach effrts with Marketing staff, which will be cnducted in bth Indiana and Michigan t give an verview f all Cmmunity Investment fferings while prviding member/spnsr testimnials and netwrking pprtunities. Mandatry training fr the 2017 Hmewnership Initiatives will be ffered via separate webinars. In additin, prgram infrmatin will be presented at the state affrdable husing cnferences in ur district as well as at cnferences spnsred by the FDIC, CRA assciatins, Credit Unin Leagues, Cmmunity Actin Agencies and varius ther rganizatins invlved in husing and cmmunity ecnmic develpment and cmmunity lending. We will als build n the success f the Cmmunity Mentrs pilt prgram with the gal f ffering ne sessin in each state f ur district. Wrking with Marketing and ther bank staff, we cntinually identify pprtunities fr affrdable husing and cmmunity investment fr ur members. We will fcus n adding value fr ur members, benefiting cmmunities by invlving members in lcal develpment and impacting cmmunities with quality targeted cmmunity lending. Page 6 f 10

7 FHLBI - Cmmunity Lending Plan : Affrdable Husing Prgram (AHP) FHLBI s AHAC and AHC are cmprised f cmmitted and experienced husing and cmmunity develpment advcates and develpers, as well as member financial institutins. In additin t the quarterly meetings, an Implementatin Plan Subcmmittee met mnthly by cnference call frm June thrugh early Nvember t develp the 2016 Cmmunity Lending Survey, review the preliminary results f the 2016 Plan and recmmend changes fr The Implementatin Plan Subcmmittee cmpleted its wrk in Nvember, allwing fr the 2017 AHP Implementatin Plan t be submitted fr AHAC/AHC cnsideratin and recmmendatin fr Bard apprval at the Nvember Bard f Directrs meeting. Fr 2017, the first district pririties cntinue t be permanent supprtive husing (including special needs husing and elderly husing prmting Aging in Cmmunity), member financial invlvement and ecnmic diversity. Secnd district pririties supprt desirable sites initiatives, small prjects and prject readiness t prceed. Desirable sites initiative has up t 5 pints available fr prjects that demnstrate prximity/access t public transprtatin and listed amenity categries. Three pints are available fr small prjects with less than 25 units. Husing prmting senirs aging in place cntinues t meet a grwing need in bth Michigan and Indiana as evidenced by the Cmmunity Lending survey results and recmmendatins. In the Aging in Cmmunity scring categry, we encurage the use f Universal Design features best suited t the target ppulatin. T make these pints mre equitable and impactful, tw pint tiers will again be available in Prjects where all ccupants f the units are at least 62 years f age r have a qualifying disability and fr which supprts are crdinated and planned n-site using an active Persn Centered planning prcess, wherein all r a prtin f the supprtive service csts are incurred by the wner/spnsr as evidenced thrugh a separate and detailed supprtive service pr-frma will receive 6 pints. Prjects where at least 80% f the units are ccupied by ne persn age 55 r lder, but nt prviding n-ging resident assessment mre than ne time per year; wherein such services are prvided n a referral basis ff-site t agencies and prviders f such services and n r minimal supprtive service csts are incurred by the spnsr/wner will receive 2 pints. The 2017 Implementatin Plan clarifies that a supprtive service plan is nt needed fr applicatins seeking 2 Aging in Cmmunity pints. 5: Hmewnership Initiatives (set-aside prgrams) The FHLBI will cntinue cntributing the maximum 35% allwable fr FHLBI will make the Hmewnership Initiative funding available as Express (first cme, first served) in ne release, withut designating specific uses t allw maximum flexibility fr ur member institutins t use funding based n district needs. As part f the 2017 set-aside calculatin, nethird f the aggregate allcatin will be t assist first-time hmebuyers and $350,000 will be allcated t accessibility mdificatins. A new initiative, the Accessibility Mdificatins Prgram (AMP), was intrduced in 2014 t respnd t ur district s aging hmewner ppulatin and the needs f disabled husehlds. This cmprehensive hmewner rehabilitatin prgram was develped t serve these ppulatins and benefit members and their custmers. The 2016 Cmmunity Lending Survey respnders indicate a cntinued need t supprt senir husing and aging-in-place initiatives. Alng with the Hmewnership Opprtunities Prgram (HOP) and Neighbrhd Impact Prgram (NIP), AMP cmpletes a life-cycle f hmewnership prgramming fr ur members. Per ur 2016 Cmmunity Lending Plan gals, we cnvened fur AMP meetings, tw in each state in ur district. After briefly reminding attendees f current AMP requirements, we received valuable feedback frm members and cmmunity partners regarding serving senirs and husehlds with a member living with a disability. Several suggestins fr imprvement were incrprated int the 2017 AMP Guidelines in the AHP Implementatin Plan. Hmewnership Initiative funding was available until early September With funds exhausted s quickly, we listened t member feedback and will have ne funding release in In 2016, member participants accessed apprximately $5 millin in funding that prvided assistance t ver 595 husehlds. Page 7 f 10

8 FHLBI - Cmmunity Lending Plan 2017 HOP was again in 2016 the mst ppular amng the member financial institutins. NIP finished strng as well in 2016, prviding much-needed hme repairs t eligible husehld. Mst funding requests were fr rfing, windws and drs, with an average grant request f $7,260. Several members participated in AMP and prvided mre than $437,000 t imprve accessibility fr husehld residents by installing ramps and mdifying bathrms. 6: Cmmunity Supprt Prgram The Cmmunity Supprt Prgram regulatin, 12 CFR Part 1290, was amended n May 28, The amendments will replace the prcess f selecting ne-eighth f all applicable members fr eight quarterly reviews by the FHFA ver a twyear review cycle with a prcess f the FHFA reviewing all applicable members at the same time every tw years. By March 31, 2017, we will prvide written ntice t all members subject t Cmmunity Supprt review that such member must submit a cmpleted Cmmunity Supprt Statement t the FHFA by December 31, The FHFA is required t establish regulatins with standards f cmmunity investment r service fr members f FHLBanks t maintain access t lng-term advances. Fr purpses f this regulatin, a lng-term advance has a term t maturity greater than ne year. 7: 2016 Gals and Accmplishments Gals Originate $ millin in CIP advances and letters f credit. Supprt multifamily husing, small business, small farm, r small agri-business lending by encuraging cmmunity financial institutins (CFI) use f advances fr these purpses thrugh targeted prmtinal initiatives, mnitring ver cllateralizatin requirements fr CFI eligible cllateral, and mnitring amunt f CFI eligible cllateral pledged. Accmplishments 2016 CIP riginatins ttaled $243.8 millin. Advances ttaled $230.7 millin and letters f credit (including interest) ttaled $13 millin. As part f ur quarterly analysis, CFI ver-cllateralizatin levels are reviewed as is the amunt f CFI eligible cllateral that is pledged. Bth reprts are presented quarterly t the Member Services Cmmittee. Als, prmtinal prduct sheets used at individual and larger member meetings highlight the additinal cllateral that is available t CFIs. Page 8 f 10

9 FHLBI - Cmmunity Lending Plan 2017 Expand the impact f bth AHP and CIP by increasing the number f new participants thrugh fcused utreach and training wrkshps. Partner with members, husing assciates, member trade rganizatins, and ecnmic develpment rganizatins t develp affrdable husing and cmmunity develpment pprtunities. Cntact 100% f member institutins with prgram utreach materials. Wrk with partner rganizatins t prmte events and include articles in their regular cmmunicatins. Increase attendance at training events by 10%. Achieve a target f 4 new AHP member participants. Achieve a target f 4 new set-aside member participants. Prmte the AMP by facilitating tw utreach meetings in each state between FHLBI member and entities/agencies supprting senirs and/r persns with disabilities. All members cntacted thrugh 12 Cmmunity Investment Bulletins, and the Affrdable Husing Advisry Cuncil Annual Reprt. The member e- newsletter distributed by the Marketing Department typically includes Cmmunity Investment Department (CID) features. The Indiana Assciatin f Cmmunity Ecnmic Develpment (IACED) and the Cmmunity Ecnmic Develpment Assciatin f Michigan (CEDAM) regularly prmte FHLBI events in newsletters and via scial media. In 2016, CID staff als prmted IACED and CEDAM events by frwarding invitatins t ur membership lists. Attendance at ur 6 CID face-t-face wrkshps increased by 18% in Attendance at the 2016 utreach wrkshps was 352 cmpared t 298 in Weather was an attendance factr in 2015 s the 2016 wrkshps were held in March. CID staff has presented prgram infrmatin at 9 cnferences r meetings during the year, including bth the MI and IN statewide husing cnferences, the FHLBI Member Sympsium, 3 interagency frums, and the MI CRA cnference. We attended and used exhibit space at several additinal cnferences and events. In 2016, 3 additinal frums were presented n the cmpetitive AHP in the fall with 60 attendees. Finally, we held a Cmmunity Mentrs Rundtable in the fall as a pilt prgram attended by 75 cmmunity leaders. Onging utreach ccurs thrugh numerus member and spnsr visits t address individual prjects and ptential pprtunities. AHP applicatins were received frm 3 members using AHP fr the first time. One member that had nt submitted an applicatin in at least 5 years was reactivated. Tw f these applicatins were awarded and 1 is an alternate award. Fur members became new/reactivated set-aside participants. We have 1 new participant in HOP and 3 new/reactivated participants in NIP. In additin, 3 active HOP/NIP users utilized AMP fr the first time. AMP Cmmunity meetings were held in Detrit, Indianaplis, Warsaw, IN and Grand Rapids with 52 members and spnsrs attending the fur events. CID staff received valuable partner feedback that will be incrprated int the 2017 AHP Implementatin Plan. Page 9 f 10

10 FHLBI - Cmmunity Lending Plan : 2017 Gals Gals fr 2017 are as fllws: Expand the impact f bth AHP and CIP by increasing the number f new participants thrugh fcused utreach and training wrkshps. Partner with members, husing assciates, member trade rganizatins, and ecnmic develpment rganizatins t create affrdable husing and cmmunity develpment pprtunities. Cntact 100% f member institutins with prgram utreach materials. Wrk with partner rganizatins t prmte events and include articles in their regular cmmunicatins. Leverage training effrts with ther stakehlders t target building rganizatinal capacity fr nn-prfits. Increase attendance at training events by 10%. Achieve a target f 4 new cmpetitive AHP member participants. Achieve a target f 4 new AHP Hmewnership Initiatives member participants. Recrd training webinars fr future viewing. Supprt multifamily husing, small business, small farm, r small agri-business lending by encuraging cmmunity financial institutins (CFI) use f advances fr these purpses thrugh targeted prmtinal initiatives, mnitring ver cllateralizatin requirements fr CFI eligible cllateral, and mnitring the amunt f CFI eligible cllateral pledged. Originate $ millin in CIP advances and letters f credit. Present a prpsal fr a vluntary cmmunity ecnmic develpment prgram t the AHAC and AHC in September. Crdinate ne Cmmunity Mentrs event in each state f the district. Page 10 f 10