Concepts in Housing: Federal Home Loan Banks

Second in a series of posts exploring programs and services in housing that some may be unfamiliar with.  The Federal Home Loan Bank is a player in the community that often is not very visible, but also is very essential.

The Federal Home Loan Bank (FHLB) is, essentially, a bank's bank.  Banks who purchase stocks in the system are members and have access to low-cost funding for home mortgages and community lenders.  There are twelve in the United States, and the Federal Home Loan Bank of Chicago (FHLBC) serves Illinois and Wisconsin. 

FHLBC, and all of the other Home Loan Banks, have community investment programs to serve the communities that their members are in, focusing on affordable housing and economic development through grants, subsidized loans, financing assistance, downpayment assistance for homebuyers, etc. This can be a source of funding for many developers, organizations, and homebuyers. 

Those community investment activities are overseen by an Advisory Council of appointed members from around the region and of different housing-related fields.  The current Advisory Council members from Wisconsin include:

• Ray DePerry (Chippewa Housing Authority)  
• Domenick Martinelli (Neighborhood Housing Services of Southeast Wisconsin)
• Nancy McKenzie (City of Rhinelander Housing Authority)
• Diane Schobert (Wisconsin Housing & Economic Development Authority)
• Gary Gorman (Gorman & Company, newly appointed)
• James Hill (formerly of Milwaukee County Department of Health & Human Services' Housing Division, now at Milwaukee Center for Independence)

FHLBC recently announced awards totaling $4.6 million for the Affordable Housing Program and $2 million for the DownPayment Plus program.  A list of awards for the Affordable Housing Program is also available here.


In a recent newsletter, FHLBC discussed one of their recent awards, an initiative to preserve affordable housing through the use of land trusts by Couleecap, Inc which serves the LaCrosse area.  Basically Couleecap owns the land while the homebuyer owns the improvements.

According to Couleecap, “The homeowner agrees to share the appreciation of the value of the property with the land trust. The homeowner receives 30% of the appreciation in value over time. The remaining 70% of the appreciation remains with the property to keep it affordable for the next homebuyer.”