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Community Investment Project Advances
includes Community Investment Program (CIP) advances
Description
CIP advances provide funding for members to undertake community-oriented mortgage and economic development lending.
Purpose
CIP advances may be used to fund community-oriented lending as defined in the FHLBI's Community Investment Program. The annual CIP new advance origination goal will be announced via the FHLBI Community Lending Plan. The FHLBI's president and CEO may institute annual funding caps during the year based on certain conditions.
Term
CIP advances are available in maturities ranging from 30 days to 20 years, according to the schedule on the following page and based on the FHLBI's funding availability.
Application
CIP advances will go through a two-step application process. Initial applications, which include the application for the Community Investment Program advance application, are to be submitted to the FHLBI's community investment division. The community investment staff will review the proposed project to determine eligibility for the CIP advance program. (Please refer to the program guidelines issued by the community investment division and relevant regulations published by the Federal Housing Finance Board). Applications and projects approved by community investment will be forwarded to the credit department for normal credit underwriting.
Rate
Advances under this program will be priced at the FHLBI's cost of funds for obligations of comparable maturity plus a small markup to cover administrative costs. Members may request a rate lock at any time during the commitment period subject to the FHLBI's availability of funds for the desired maturity.
Schedule of available CIP advance types
| Advance type |
Maximum term |
Other information |
| Variable |
180 days |
Calculated on actual/360 day count basis |
| Short-term fixed rate |
270 days |
Calculated on actual/360 day count basis |
| Adjustable |
20 years |
Indexed to FHLBI's cost of funds |
| Long-term fixed rate |
20 years |
Calculated on actual/360 day count basis |
| Callable |
7 years |
Concession costs are paid upfront as a fee |
| Mortgage |
10 years |
Annual principal repayment schedule based on prepayment assumptions |
| Amortizing |
20 years |
Annual principal repayment schedule usually based on a 30 year amortization schedule - no prepayment options |
| Letter of credit |
10 years |
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Commitment
Funds-only commitments may be set up automatically when the community investment division notifies the credit department of approved applicants. Initial commitments will typically be issued as follows
| Portofolio lending |
Up to 6 months |
| Projects |
Up to 6 months |
A one-time three-month extension may be considered for CIP projects.
Takedown
If the CIP advance request is approved and the CIP advance application has been properly executed and received by the FHLBI's credit department, funding will normally take place within 1 business day of the rate lock.
Commitment fee
May apply if an extended commitment period is requested.
Prepayment
Prepayments may occur subject to applicable limitations and prepayment fees described in the Community Investment Program advance terms sheet. Notify the FHLBI by 2 p.m. Indianapolis time for next-day prepayment, except that variable rate advances may be prepaid up to 2 p.m. the same day.
For additional information on the use of CIP Advances click here.
Updated: February 25, 2008
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