Last week, FHLBank Topeka released its 2022 fourth quarter and annual results. We were pleased to be there for our members as the need for advance funding expanded by more than $20 billion during 2022. Our business model continues to work as it has over our 90-year history, expanding and contracting in response to member funding needs.  

Serving as a trusted liquidity source is a role we take seriously. We fulfill this role when you as a member pledge high-quality, mission-related collateral, and we then provide advance funding to support lending in your communities. Recently, you may have seen press coverage questioning the purpose of the FHLBank System without a full understanding of our cooperative. As our members know well, FHLBank Topeka helps members build strong communities by providing reliable liquidity that fills their funding gaps and allow members to consistently lend even when deposit growth is not keeping pace with loan demand. The FHLBank System is designed to provide reliable funding in all financial and economic cycles.

Last fall our regulator, the Federal Housing Finance Agency (FHFA), undertook a review of the FHLBanks titled FHLBank System at 100: Focusing on the Future. In order to continue to raise awareness of the FHLBanks’ role in helping community financial institutions and the communities they serve, we need you to add your voice to the conversation. As the review closes this spring, I’ve provided information about an additional comment period and virtual listening sessions below.

FHFA Comprehensive Review of FHLBank System 

The FHFA has opened another written comment period extending through March 17. The FHFA’s review has resulted in a number of questions being raised regarding the mission and purpose of the FHLBanks, including the types of institutions that should be eligible for membership, the level of support the FHLBanks provide for affordable housing activities, investment in communities and potential operational efficiencies. The FHFA has also stated that the FHLBanks should do more to create incentives for members to better serve their communities’ housing and community development needs.

This review raises central questions about your use of your cooperative, and we hope you’ll consider telling your story about our relationship, regardless of whether you submitted comments previously. We have shared ideas to consider in your comment letters on our landing page as well as a link to submit your written comments.

Previous comments are posted on the FHFA’s site. To give you an idea of what your fellow members are saying, below are a few quotes from across the district pulled from the fall comment period. Your regional account manager can provide assistance on your comment letter or share more about themes raised through the review. Please reach out to them with any questions.

• “We have used FHLBank for over 25 years for seasonal liquidity needs, community projects, and most importantly, delivering home mortgage financing. In addition, we have leveraged their homeownership grant funds to help build our corner of rural America. The system provides a critical mix of financial support, consulting, and rural development programs to allow us to serve our clients and communities at a higher level.”  - submitted by Jon Schmaderer, President and CEO, The Tri-County Bank, Stuart, Nebraska 
• “As a portfolio lender, the FHLB has played a significant role in helping CFSB fulfill its primary objective of providing affordable housing credit to qualified borrowers in the communities it serves and beyond. FHLB advances are essential to CFSB fulfilling this objective.” – submitted by Kent Townsend, Executive Vice President and Chief Financial Officer, Capitol Federal Savings Bank, Topeka, Kansas
• “We utilize FHLB to ensure that we are always in a position to provide for our customers' and communities' needs and do so quickly and efficiently. Municipal deposits make up a significant portion of our balance sheet and the balances are quite volatile. This can create some funding challenges to ensure we always maintain plenty of liquidity to lend out to our local customer base, so we consistently rely on the FHLB overnight lines of credit in order to bring much needed stability to our deposit base.” – submitted by Kyle Abrahams, CFO, First National Bank and Trust Co., Chickasha, Oklahoma 
• “FHLB Topeka plays a critical role in Centris’ community development and residential mortgage lending capabilities. By offering competitive pricing on qualifying residential mortgage loan products, FHLBank Topeka provides liquidity and helps mitigate the risks associated with retaining long-term fixed-rate residential mortgages in our loan portfolio.” – submitted by Steve Swanstrom, President and CEO, Centris Federal Credit Union, Omaha, Nebraska 
• “In February 2022 CHFA was the first Housing and Finance Authority in the nation to close and deliver an eNote for a single family first mortgage. This would not have been possible without the partnership of FHLBank Topeka. The FHLB Topeka team was instrumental in helping CHFA be proactive in implementing new technologies and being responsive to the rapidly growing mortgage eClosing process.” – submitted by Cris White, Executive Director/CEO, Colorado Housing and Finance Authority, Denver, Colorado  

The FHFA has also opened registration for its final three-day listening session March 22-24. The first day will be in-person at the FHFA’s headquarters in Washington, D.C. The last two days are virtual only. We encourage members to speak on behalf of your cooperative. To do so, please register on the FHFA site.  

Housing and Community Development Programs 

An important part of our mission is supporting affordable housing initiatives across our district. As our cooperative succeeds, more money is allocated to our Affordable Housing Program (AHP). In 2023, $26.7 million in AHP funding will be available, compared to $17.8 million in 2022. 

We announced our 2022 AHP recipients in December. If you missed that announcement, visit our website to read about the 15 projects supported by our members through the competitive AHP. Our 2023 program will open this summer. 

A portion of our AHP funding is allocated to our grant program for qualified first-time homebuyers, the Homeownership Set-aside Program (HSP). HSP funding is available starting March 6. Grants of up to $7,500 per household can help prospective homebuyers in your community fulfill the American dream. Find out more at fhlbtopeka.com/hsp. 

In addition to these programs and our discounted advance programs, we are also implementing two new innovative programs in 2023: 

Our High-Cost Area Homeownership Set-aside Program was created to help homebuyers in designated high-cost areas in our four-state district (currently 17 counties in Colorado). For these homebuyers, we’ve doubled our grant amount to $15,000 to provide a comparable impact in these areas. See program specifics on our website. 

A new voluntary program, Native American Housing Initiatives Grants, will debut this summer with $1 million available to help Native American tribes and tribally designated housing entities address housing needs in our district. Grants of $100,000 to $500,000 will be offered. Watch for more information this spring.

FHLBank System Diversity, Equity and Inclusion Report 

Another way the FHLBank System supports the communities it serves is by deliberate focus on diversity, equity and inclusion. FHLBanks across the country came together to produce a report highlighting how we support vibrant communities.

I invite you to take a look at the recently released report. You’ll find a story about FHLBank Topeka under the “Being a Good Neighbor” section. The article explains our connection to a community-created mural near the Brown v. Board of Education National Historic Site.