§ 1291.1 Definitions. As used in this part: *Affordable* means that: ( 1 ) The rent charged to a household for a unit that is to be reserved for occupancy by a household with an income at or below 80 percent of the median income for the area, does not exceed 30 percent of the income of a household of the maximum income and size expected, under the commitment made in the AHP application, to occupy the unit (assuming occupancy of 1.5 persons per bedroom or 1.0 persons per unit without a separate bedroom); or
( 2 ) The rent charged to a household, for rental units subsidized with Section 8 assistance under 42 U.S.C. 1437f or subsidized under another assistance program where the rents are charged in the same way as under the Section 8 program, if the rent complied with this definition at the time of the household's initial occupancy and the household continues to be assisted through the Section 8 or another assistance program, respectively.
*AHP* means the Affordable Housing Program required to be established by the Banks pursuant to 12 U.S.C. 1430(j) and this part.
*AHP project* means a single-family or multifamily housing project for owner-occupied or rental housing that has been awarded or has received AHP subsidy under a Bank's General Fund and any Targeted Funds.
*Cost of funds* means, for purposes of a subsidized advance, the estimated cost of issuing Bank System consolidated obligations with maturities comparable to that of the subsidized advance.
*Direct subsidy* means an AHP subsidy in the form of a direct cash payment.
*Eligible household* means a household that meets the income limits and other requirements specified by a Bank for its General Fund and any Targeted Funds and Homeownership Set-Aside Programs, provided that: ( 1 ) In the case of owner-occupied housing, the household's income may not exceed 80 percent of the median income for the area; and
( 2 ) In the case of rental housing, the household's income in at least 20 percent of the units may not exceed 50 percent of the median income for the area.
*Eligible project* means a project eligible to receive AHP subsidy pursuant to the requirements of this part.
*Extremely low-income household* means a household that has an income at or below 30 percent of the median income for the area, with the income limit adjusted for household size in accordance with the methodology of the applicable median income standard selected from those enumerated in the definition of “median income for the area,” unless such median income standard has no household size adjustment methodology.
*Family member* means any individual related to a person by blood, marriage, or adoption.
*Funding round* means a time period, as determined by a Bank, during which the Bank accepts AHP applications for subsidy under its General Fund and any Targeted Funds.
*General Fund* means a program that each Bank is required to establish and under which the Bank approves *(i.e.,* awards) applications for AHP subsidy through a competitive application scoring process and disburses the subsidy, pursuant to the requirements of this part.
*Homeownership Set-Aside Program* means a program established by a Bank, in its discretion, under which the Bank approves (*i.e.,* awards) applications for AHP direct subsidy through a noncompetitive process developed by the Bank and disburses the subsidy, pursuant to the requirements of this part.
*Household's investment* means the following, to the extent paid by the household and documented (in the Closing Disclosure or other settlement statement, if applicable, or elsewhere) to the Bank or its designee: ( 1 ) Reasonable and customary costs paid by the household in connection with the purchase of the unit (including real estate broker's commission, attorney's fees, and title search fees);
( 2 ) Any down payment paid in connection with the household's purchase of the unit;
( 3 ) The cost of any capital improvements made after the household's purchase of the unit until the time of the subsequent sale, transfer, assignment of title or deed, or refinancing; and
( 4 ) The amount of principal on any mortgage senior to the AHP subsidy lien or other legally enforceable AHP subsidy repayment obligation repaid by the household.
*LIHTC* means Low-Income Housing Tax Credits under section 42 of the Internal Revenue Code (26 U.S.C. 42).
*Loan pool* means a group of mortgage or other loans meeting the requirements of this part that are purchased, pooled, and held in trust.
*Low- or moderate-income household* means a household that has an income of 80 percent or less of the median income for the area, with the income limit adjusted for household size in accordance with the methodology of the applicable median income standard selected from those enumerated in the definition of “median income for the area,” unless such median income standard has no household size adjustment methodology.
*Median income for the area* means one or more of the following median income standards as determined by a Bank, after consultation with its Advisory Council, in its AHP Implementation Plan: ( 1 ) The median income for the area, as published annually by HUD;
( 2 ) The median income for the area obtained from the Federal Financial Institutions Examination Council;
( 3 ) The applicable median family income, as determined under 26 U.S.C. 143(f) (Mortgage Revenue Bonds) and published by a state agency or instrumentality;
( 4 ) The median income for the area, as published by the United States Department of Agriculture; or
( 5 ) The median income for an applicable definable geographic area, as published by a federal, state, or local government entity, and approved by FHFA, at the request of a Bank, for use under the AHP.
*Multifamily building* means a structure with five or more dwelling units.
*Net earnings of a Bank* means the net earnings of a Bank for a calendar year before declaring or paying any dividend under section 16 of the Bank Act (12 U.S.C. 1436). For purposes of this part, “dividend” includes any dividends on capital stock subject to a redemption request even if under GAAP those dividends are treated as an “interest expense.”
*Net proceeds* means: ( 1 ) In the case of a sale, transfer, or assignment of title or deed of an AHP-assisted unit by a household during the AHP five-year retention period, the sales price minus reasonable and customary costs paid by the household in connection with the transaction (including real estate broker's commission, attorney's fees, and title search fees) and outstanding debt superior to the AHP subsidy lien or other legally enforceable AHP subsidy repayment obligation;
( 2 ) In the case of a refinancing of an AHP-assisted unit by a household during the AHP five-year retention period, the principal amount of the new mortgage minus reasonable and customary costs paid by the household in connection with the transaction (including attorney's fees and title search fees) and the principal amount of the refinanced mortgage.
*Owner-occupied project* means, for purposes of a Bank's General Fund and any Targeted Funds, one or more owner-occupied units in a single-family or multifamily building, including condominiums, cooperative housing, and manufactured housing.
*Owner-occupied unit* means a dwelling unit occupied by the owner of the unit. Housing with two to four dwelling units consisting of one owner-occupied unit and one or more rental units is considered a single owner-occupied unit.
*Program* means the Affordable Housing Program established pursuant to this part.
*Rental project* means, for purposes of a Bank's General Fund and any Targeted Funds, one or more dwelling units for occupancy by households that are not owner-occupants, including overnight and emergency shelters, transitional housing for homeless households, mutual housing, single-room occupancy housing, and manufactured housing communities.
*Retention period* means: ( 1 ) Five years from closing for an AHP-assisted owner-occupied unit where the AHP subsidy is used for purchase of the unit, for purchase in conjunction with rehabilitation of the unit, or for construction of the unit; and
( 2 ) Fifteen years from the date of completion for a rental project.
*Revolving loan fund* means a capital fund established to make mortgage or other loans whereby loan principal is repaid into the fund and re-lent to other borrowers.
*Single-family building* means a structure with one to four dwelling units.
*Sponsor* means a not-for-profit or for-profit organization or public entity that: ( 1 ) Has an ownership interest (including any partnership interest), as defined by the Bank in its AHP Implementation Plan, in a rental project;
( 2 ) Is integrally involved, as defined by the Bank in its AHP Implementation Plan, in an owner-occupied project, such as by exercising control over the planning, development, or management of the project, or by qualifying borrowers and providing or arranging financing for the owners of the units;
( 3 ) Operates a loan pool; or
( 4 ) Is a revolving loan fund.
*Subsidized advance* means an advance to a member at an interest rate reduced below the Bank's cost of funds by use of a subsidy.
*Subsidy* means: ( 1 ) A direct subsidy, provided that if a direct subsidy is used to write down the interest rate on a loan extended by a member, sponsor, or other party to a project, the subsidy must equal the net present value of the interest foregone from making the loan below the lender's market interest rate; or
( 2 ) The net present value of the interest revenue foregone from making a subsidized advance at a rate below the Bank's cost of funds.
*Targeted Fund* means a program established by a Bank, in its discretion, to address specific affordable housing needs within its district that are unmet, have proven difficult to address through its General Fund, or align with objectives identified in its strategic plan, under which the Bank approves (*i.e.,* awards) applications for AHP subsidy through a competitive application scoring process developed by the Bank and disburses the subsidy, pursuant to the requirements of this part.
*Very low-income household* means a household that has an income at or below 50 percent of the median income for the area, with the income limit adjusted for household size in accordance with the methodology of the applicable median income standard selected from those enumerated in the definition of “median income for the area,” unless such median income standard has no household size adjustment methodology.
*Visitable* means, in either owner-occupied or rental housing, at least one entrance is at-grade (no steps) and approached by an accessible route such as a sidewalk, and the entrance door and all interior passage doors are at least 34 inches wide, offering 32 inches of clear passage space.
[83 FR 61231, Nov. 28, 2018, as amended at 87 FR 32969, June 1, 2022]