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FHLBanks Share Affordable Housing Mission with Hill, Nonprofits

On November 28, 2006, approximately 100 staff representatives of the U.S. House and Senate, key nonprofits, strategic partners and FHLBank officers from around the country convened at the Marriott at Metro Center in Washington, DC for an all-day affordable housing summit sponsored by the Federal Home Loan Bank System.

"The key words of this day are not subsidy and obligation but investment and opportunity," stated Andrew Jetter, president of FHLBank Topeka, which organized the event. The gathering featured observations and recommendations from a wide variety of speakers, including former U.S. Sen. John Breaux (D-La.), who said the prospects for bipartisan cooperation in the next Congress appear strong; former Indianapolis Mayor William Hudnut, now with the Urban Land Institute, who urged even greater acceptance of green building and housing rehabilitation; and Luis Cortés Jr., president of Esperanza USA, a coalition of churches, ministries and Hispanic Christians actively promoting a national social agenda.

Cortés, a former vice chair of FHLBank Pittsburgh's Board of Directors and now an adviser to the Board, rattled off statistics from a recent study indicating that Hispanics lag significantly in terms of wealth accumulation, with a national poverty rate of 22 percent, a homeownership rate of 48.5 percent and a decline in median income of eight percent between 2000 and 2005. Further, Cortés stated, 20 percent of Hispanic mortgages are subprime mortgages and "people with the same credit are twice as likely as whites to get a subprime loan."

Cortés asked his audience and FHLBanks in particular to do even more to support wealth accumulation for Hispanics through greater homeownership. "FHLBanks should lead the struggle on homeownership education for Hispanics and African-Americans… (They) should be #1 in homeownership financial education," the Philadelphia-based minister said.

During luncheon remarks, Council of Federal Home Loan Banks President John von Seggern underscored the importance of the 8,100-member FHLBank System to American homeownership and the nation's economy. He said the country's 12 FHLBanks had provided a total of $620 billion in advances (low-cost loans) to local financial institutions for mortgages and other community and economic development purposes at the close of 2005 and that the System's Affordable Housing Program has delivered a total of $2.1 billion in funding for 450,000 units of housing since its inception in 1990. "If the Affordable Housing Program were a stand-alone foundation, it would be the largest housing foundation in the country," von Seggern told the group.

Created by Congress in 1932, the FHLBank System is privately capitalized and funded and uses no taxpayer dollars in pursuit of its public mission.

Representing FHLBank Pittsburgh at the Housing Summit were President and Chief Executive Officer John Price; John Bendel, director of Community Investment; and Peter Knight, its director of Government Relations.