To increase the mandatory contribution amount of Federal Home Loan Banks to the Affordable Housing Program, and for other purposes.
- Sponsor
- Rep. Waters, Maxine [D-CA-43]
- Committees
- Financial Services Committee (primary)
- Last action
- Sep 16, 2026
Bottom line
This bill increases the mandatory financial contribution of Federal Home Loan Banks to the Affordable Housing Program by 50% of their current rate, aiming to boost affordable housing funding.
What it actually does
This bill amends the Federal Home Loan Bank Act to increase the mandatory contribution rate of Federal Home Loan Banks (FHLBs) to the Affordable Housing Program (AHP). Starting in 2026, FHLBs would be required to contribute 15% of their preceding year's net income, up from the current 10%, with a continued aggregate minimum contribution of $100,000,000 annually. This change aims to provide more funding for affordable housing initiatives.
Proponents argue
Supporters argue this increase is a vital step to address the nation's persistent affordable housing crisis, providing a dedicated and substantial funding stream without relying on direct taxpayer appropriations. They contend that FHLBs, as government-sponsored enterprises with a public mission, are well-positioned to contribute more to community development, especially given their financial stability.
Opponents contend
Critics might argue that increasing the mandatory contribution could reduce the profitability of FHLBs, potentially impacting their ability to provide liquidity to member institutions or affecting the returns to their shareholders. Some may also contend that this is an indirect tax on FHLBs and their members, which could ultimately be passed on to consumers or reduce the capacity of member banks to lend.
The bill is exceptionally short and clear, making it very accessible for any reader to understand its core purpose and provisions quickly.
Section 1, amending Section 10(j)(5) of the Federal Home Loan Bank Act (12 U.S.C. 1430 (j)(5))
Increase in Federal Home Loan Bank Affordable Housing Program Contributions
This provision modifies the Federal Home Loan Bank Act to raise the percentage of net income that Federal Home Loan Banks (FHLBs) must contribute to the Affordable Housing Program (AHP). Currently, FHLBs contribute 10% of their preceding year's net income. Starting in 2026, this bill mandates an increase to 15% of their preceding year's net income, while retaining the existing floor that the aggregate contribution of all FHLBs must not be less than $100,000,000 annually.
Supporters argue
Supporters argue that this increased contribution will significantly bolster the Affordable Housing Program, enabling more projects that create and preserve affordable housing units across the country. They emphasize that FHLBs have a public purpose and the capacity to contribute more to address critical housing needs, especially given the current housing affordability crisis.
Critics contend
Opponents might contend that diverting a larger share of FHLB net income could reduce the capital available for other FHLB activities, such as providing liquidity to member banks, which could indirectly affect the broader financial system or the ability of local lenders to support community development. They may also argue that FHLBs already contribute substantially and that further increases could strain their financial performance.
Tradeoffs
The provision balances the public mission of FHLBs to support affordable housing with their operational needs and responsibilities to member institutions. It creates a tension between maximizing direct support for housing programs and maintaining FHLB financial flexibility and capacity to serve their members.