Community Investment Program (CIP).

What CIP is

The Community Investment Program (CIP) is one of the Federal Home Loan Bank System's two flagship affordable housing and community development programs. Where the Affordable Housing Program (AHP) provides competitive grants and subsidized advances to projects, CIP provides discounted advances directly to FHLB member institutions to fund their community lending activity, including loans to affordable housing projects and other targeted community development purposes.

CIP is authorized under Section 10(i) of the Federal Home Loan Bank Act and regulated by FHFA under 12 CFR Part 1292. Each of the 11 FHLB districts administers its own CIP within these federal parameters.

How CIP works mechanically

FHLB member institutions (commercial banks, thrifts, credit unions, insurance companies, and community development financial institutions that are FHLB members) can request advances from their FHLB at below-market interest rates when those advances will be used to fund qualifying community lending. CIP advances are priced at the FHLBank’s cost of funds — not to exceed the Bank’s cost of issuing consolidated obligations of comparable maturity, taking into account reasonable administrative costs — per 12 CFR § 1292.5(d)(2) and 12 U.S.C. § 1430(i)(1). Any spread vs. the standard advance rate depends on the rate environment, the bank, and any discretionary Discount Fund applied.

The advance is a debt obligation of the member institution to the FHLB. The member uses the advanced funds to make community-purpose loans (which may include affordable housing project loans, small business loans in low- and moderate-income areas, infrastructure loans for distressed communities, etc.).

Critically, CIP is not direct project financing — it's wholesale funding for member institutions. Affordable housing developers don't apply directly to FHLB for CIP. They work with member lenders who, in turn, may fund their loans using CIP advances.

CIP vs AHP — key differences

Feature	AHP	CIP
Funding mechanism	Direct grants and subsidized advances to projects	Discounted advances to member institutions
Application timing	Annual competitive rounds	Continuous, non-competitive
Project applicant	Developer applies through member institution	Member institution directly requests advance
Subsidy form	Grant or below-market loan to project	Below-market rate on advance to member
Income targeting	Stringent, deep-affordability typical	Broader community lending
Scoring complexity	Detailed scoring per district plan	Compliance-based, not scored

Eligible uses

Under FHFA's Community Investment Cash Advance regulation, CIP advances must fund eligible community lending purposes, which include:

• Housing: Purchase, construction, rehabilitation, refinancing, or predevelopment financing of owner-occupied or rental housing for low- or moderate-income households (typically at or below 115% AMI for housing purposes)
• Economic development: Commercial, industrial, manufacturing, or social services projects in low- or moderate-income neighborhoods or benefiting low- or moderate-income persons
• Mixed-use: Projects combining qualifying housing and economic development components
• Targeted populations: Lending to specific target populations defined by FHFA, including projects in distressed areas (Champion Communities, FEMA-designated disaster areas, etc.)

The detailed eligible-use definitions vary by FHLB district within FHFA's framework.

How affordable housing developers benefit indirectly

Although developers don't apply to FHLB directly for CIP, the program creates real economic benefit for affordable housing finance in several ways:

1. Lower-cost loans from member banks

When an FHLB member uses CIP funding to make an affordable housing project loan, the lower wholesale cost of capital may translate into more competitive loan pricing for the developer. The extent of pass-through varies by lender and market conditions, but in competitive lending markets, CIP-funded loans can have measurably better pricing or terms.

2. Expanded lender capacity

Some smaller FHLB member institutions might otherwise be capacity-constrained for affordable housing lending. CIP advances expand their balance sheet capacity to make such loans, increasing the number of lenders effectively in the market.

3. CDFI access

Community Development Financial Institutions (CDFIs) that are FHLB members can use CIP advances to fund their own affordable housing lending. This is particularly relevant for smaller deals or markets where CDFIs are primary capital providers.

4. Bridge financing

CIP-funded short-term advances at member institutions can support bridge financing for LIHTC equity timing, particularly for 9% deals where equity flows in over multiple periods relative to construction draw timing.

Member institution participation

To use CIP, a financial institution must be a member of one of the 11 FHLBs. Membership requires:

• Qualification as an "insured depository institution" (commercial bank, thrift, credit union), insurance company, or certified CDFI
• Acquisition of FHLB capital stock per the district's requirements
• Compliance with FHLB collateral and underwriting standards for any advance

Once a member, the institution can request CIP advances by demonstrating that the underlying loans qualify for community lending purposes under 12 CFR Part 1292.

Documentation and compliance

For CIP-funded advances, member institutions must:

• Document the community lending use of the funds (project, borrower, income targeting, etc.)
• Maintain ongoing compliance records during the advance term
• Report to the FHLB on community lending activity per district requirements
• Allow FHLB to verify community lending compliance

This documentation flow means project sponsors typically work with their member lender to produce the data the lender needs for FHLB CIP compliance — income certifications, project details, AMI documentation, and similar materials are part of the standard LIHTC compliance burden that satisfies CIP documentation as well.

The 11 FHLB districts

Each district administers its own CIP within FHFA's framework. The districts are:

• FHLB Atlanta — Alabama, DC, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia
• FHLB Boston — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
• FHLB Chicago — Illinois, Wisconsin
• FHLB Cincinnati — Kentucky, Ohio, Tennessee
• FHLB Dallas — Arkansas, Louisiana, Mississippi, New Mexico, Texas
• FHLB Des Moines — Iowa, Minnesota, Missouri, North Dakota, South Dakota, Alaska, Hawaii, Idaho, Montana, Oregon, Utah, Washington, Wyoming, American Samoa, Guam, Northern Mariana Islands
• FHLB Indianapolis — Indiana, Michigan
• FHLB New York — New Jersey, New York, Puerto Rico, U.S. Virgin Islands
• FHLB Pittsburgh — Delaware, Pennsylvania, West Virginia
• FHLB San Francisco — Arizona, California, Nevada
• FHLB Topeka — Colorado, Kansas, Nebraska, Oklahoma

To use CIP in a specific district, contact a member institution chartered or operating in that district.

Sources & further reading

• Federal Home Loan Bank Act, 12 U.S.C. § 1430(i) — statutory authority
• 12 CFR Part 1290 — FHFA Community Support Requirements
• 12 CFR Part 1292 — FHFA Community Investment Cash Advance Programs
• Each FHLB district's CIP guidance and member resources (available through district websites)
• FHLB Affordable Housing Program (AHP) — companion program with grants and subsidized advances
• FHLB hub page — overview of the 11 districts
• LIHTC — how CIP-funded loans commonly support LIHTC deals
• Sources & Attribution

This is educational reference material, not legal, tax, financial, or investment advice. CIP rules and district implementations evolve; consult your FHLB member institution and qualified counsel for transaction-specific advice. See Disclaimer.