Sec. 9. Community investment cash advance and community economic development program
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Section 10 of the Federal Home Loan Bank Act ( 12 U.S.C. 1430 ) is amended by inserting after subsection
(e)the following: Pursuant to regulations promulgated by the Director, each Bank— may establish community investment cash advance programs to provide financing for members or nonmember mortgagees eligible to receive advances under section 10b to provide projects targeted to certain economic development activities and specific beneficiaries, including certain geographic areas and at certain targeted income levels established by the Bank with the prior approval of Director; and shall provide targeted community economic development grants and lending. With respect to a project funded under a program established under this subsection involving a combination of housing projects and economic development projects, only the economic development components of the project shall be required to meet the appropriate targeted income level for the program. A Bank shall price advances to members under this subsection as provided in section 1266.5 of title 12, Code of Federal Regulations, or any successor regulation, and may price such advances at rates below the price of advances of similar amounts, maturities, and terms made pursuant to subsection (a). A Bank may offer advances under a program established under this subsection to non-member mortgagees eligible to receive advances under subsection
(b)at the Bank's option. A Bank shall price advances under this paragraph to non-member mortgagees eligible to receive advances under section 10b as provided in section 1266.17 of title 12, Code of Federal Regulations, or any successor regulation, and may price such advances at rates below the price of advances of similar amounts, maturities, and terms made pursuant to section 10b. A Bank may require that borrowers receiving advances made under a program established under this subsection pass through the benefit of any price reduction from regular advance pricing to borrowers of the Bank. A Bank may establish a discount fund that the Bank may use to reduce the price of advances made under a program established under this subsection below the advance prices provided for by part 1292 of title 12, Code of Federal Regulations, or any successor regulation. Price reductions made through a discount fund under subparagraph
(A)shall be made in accordance with a fair distribution scheme. In this paragraph: The term eligible entity means— a locally owned nonprofit organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code or a community development corporation— that has experience in developing and managing economic development projects; that is governed by a board of directors consisting of residents of the community and business and civic leaders; and the principal purpose of which is to plan, develop, or manage low-income housing or community development projects; a non-depository community development financial institution, as defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4702 ), that is certified by the Community Development Financial Institutions Fund under section 1805.201 of title 12, Code of Federal Regulations, or any successor regulation; a federally recognized Indian Tribe or community; or a regional or national nonprofit community development or cooperative development intermediary. The term low-income community has the meaning given the term in section 45D(e) of the Internal Revenue Code of 1986. The term rural community means a city, town, or Census Designated Place with a population of not more than 20,000, according to the most recent decennial census conducted by the Bureau of the Census. The term very low-income household means a household with an income that is not greater than 50 percent of the area median income. Each Bank shall establish a program to provide grants or subsidize the interest rate on advances to members engaged in lending to eligible entities for economic development activities that serve low-income or rural communities. The entire amount of a grant or subsidized advance provided under this paragraph— shall benefit the communities assisted by the recipient of the grant or subsidized advance; shall not be used for the purpose of financial education or to support a sports stadium or arena; and shall provide at least 2 percent of grants or advance funds to benefit federally recognized Indian Tribes or communities, which may include a Bank providing grants or advance funds outside of the district of the Bank. Economic development activities that are eligible to be carried out under this paragraph include— providing grants and equity investments, including those that capitalize a revolving loan fund of a Treasury-certified non-depository community development financial institution for eligible economic development activities similar to the authority provided within the Affordable Housing Program under subsection (j); providing awards consistent with awards provided under section 680 of the Community Block Grant Act ( 42 U.S.C. 9921 ); financing business transitions to worker-owned cooperatives or financing the sales of business assets to employees or community stakeholders that preserve jobs in low- and moderate-income communities; financing capital expenditures, such as the purchase of equipment or real property for nonprofit organizations, including child care or health care facilities in low-income communities, that provide service to low-income households; financing operating expenses for nonprofit community development organizations engaged in community economic development activities benefitting very low-income households; water, road, broadband, clean energy, or municipal infrastructure investments, including investments to address climate change, in Native American tribal lands and economically distressed rural communities; providing community facilities or infrastructure, including public transit, green space consisting of parks with trees and shrubbery, heat-reflecting road and sidewalk upgrades, tornado shelters, public restrooms, or environmental cooling locations accessible to the public in low-income communities; and any other activity established by the Director in consultation with Congress, the Federal Home Loan Banks and their housing advisory councils, and the public. In using amounts provided under this paragraph, each Bank member shall give priority to qualified projects such as— grants or advances for mixed-use housing developments that provide economic activity and affordable housing for low-income and rural communities; grants or advances for child care facilities that serve low-income households; grants or advances for programs that provide economic opportunities for formerly incarcerated individuals; grants or advances that enable conversion to employee- or community-owned companies or financing the sales of business assets to employees or community stakeholders; grants or advances to established regional and national intermediary organizations that already receive Federal funds and have the capacity to deliver economic development activities to low-income households; and any other priority established by the Agency in consultation with the Banks, Bank members, housing advisory councils of the Banks, Congress, and the public. With respect to a project carried out by an eligible entity in a rural community under this paragraph— not less than 51 percent of the population served by the project shall reside in the rural community; the projects shall primarily serve and benefit rural residents and communities; and the rural community shall be within the jurisdiction of the eligible entity. Each member receiving a grant or advance under this paragraph shall report annually to the Bank making the grant or advance concerning the use by the member of the grant or advance. Each Bank shall annually contribute 10 percent of the preceding year’s net income, or such prorated sums as may be required to ensure that the aggregate contribution of the Banks shall not be less than $100,000,000 for each such year, to support grants and subsidized advances made under this paragraph. .
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Sec. 9
Community investment cash advance and community economic development program
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