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That housing and economic development group you’ve probably never heard of

In 2023, FHLBank Boston will launch a new special-purpose credit program dedicated to helping borrowers of color achieve homeownership through down payment and closing cost assistance.


If you don’t work in financial services or affordable housing development, you may have never heard of the Federal Home Loan Bank system, which comprises 11 regional banks including FHLBank Boston. FHLBanks serve as important behind-the-scenes partners for banks, credit unions, insurance companies, and community development financial institutions supporting housing and economic development initiatives across the country, at no expense to the US taxpayer.

Since the FHLBanks were founded in 1932, they have fulfilled a critical mission: to provide on-demand liquidity to their members in support of housing finance and community investment during all economic cycles. This liquidity comes primarily in the form of loans, or “advances,” to member financial institutions.


While banks and credit unions typically rely on customer deposits to fund loans and their operations, they can turn to their regional FHLBank when other sources of liquidity (including deposits) are not available, inadequate, or difficult to access. In this way, members ensure that money will continue to flow to their communities, providing mortgage, business, and other loans, when the need is greatest.

Over time, Congress has significantly updated the FHLBanks’ mandate and mission including expanding membership to include community development financial institutions and the types of collateral members can borrow against. And since the unique needs of members and the communities they serve continue to evolve, so too have the products, services, and programs offered by FHLBank Boston.

One of the most important and widely used financing programs for the creation and renovation of affordable housing, both for sale and for rent, is the Affordable Housing Program offered by each FHLBank to its respective members. The housing program is funded by 10 percent of each FHLBank’s annual net income. In New England, a strong partnership between the nonprofit affordable housing community, FHLBank Boston, and its members has developed and helped shape the Affordable Housing Program over the last 30 years, achieving striking results. Since 1990, the program has funded 1,212 affordable housing projects, leading to the creation or renovation of 35,340 affordable homes throughout New England using $347 million in low-cost advances and $375 million in grants and subsidies.


Above and beyond significant investments in affordable housing, FHLBank Boston has created several programs that help meet the needs of New England communities. The Jobs for New England program provides low-cost advances to members so they can offer low-interest-rate loans to small businesses, including those owned by minorities, women, and veterans. The goal of the program is to stimulate local economies by providing funding to expand businesses and create or retain jobs. Since its launch in 2016, it has funded $287 million in low-interest business loans resulting in the creation and retention of nearly 10,000 jobs at small businesses throughout New England.

During the pandemic, FHLBank Boston adjusted its jobs program to augment federal stimulus dollars available through programs like the Paycheck Protection Program. The Jobs for New England program helped struggling businesses and nonprofits keep their doors open through the pandemic. One program success story this year was centered on City Fresh Foods, a Black-owned food service company based in Roxbury. With a $7.5 million loan funded in part through Jobs for New England, City Fresh Foods is building a new production and distribution facility expected to create and retain 220 jobs.

In September, the Federal Housing Finance Agency, which regulates the FHLBanks, commenced a national review to gather public feedback from various stakeholders about what the banks could do to better meet the needs of their members and the communities they serve. FHLBank Boston, its members, and the New England affordable housing community look forward to participating in these conversations and seeing what changes result.


In the meantime, FHLBank Boston will continue to innovate and respond to the unique needs of its members and the New England communities they serve. In 2023, the bank will launch a new special-purpose credit program dedicated to helping borrowers of color achieve homeownership through down payment and closing cost assistance. During this time of strained affordability and disparities in homeownership negatively affecting so many of our neighbors, urgency of action and a mindset of innovation are paramount.

Erin Cooperrider is chair of the FHLBank Boston Advisory Council and principal of NewHeight Group in Portland, Maine. Mark O’Connell is chair of the Massachusetts Bankers Association and president and CEO of Avidia Bank in Hudson.