Community Investment Program (CIP)

The Community Investment Program (CIP) helps members ensure that their communities experience steady economic growth. The CIP provides a favorably-priced source of wholesale funds (also called advances) for FHLBI members involved in community economic development activities that benefit low- and moderate-income families or neighborhoods. The funds, which can be used for development of housing, infrastructure improvements, or small businesses creating jobs, are provided at below-market rates. In essence, the CIP helps lenders make loans that might not be possible without such funds by reducing the risk associated with making non-conventional loans for community development.

CIP advances are priced at the FHLBI's cost of funds for similar maturities plus an administrative fee. Available in maturities up to 20 years, they are made on a secured basis only with collateral requirements consistent with those on all FHLBI credit programs. Prepayment fees may also apply.

> Terms and Conditions
> Common Uses
> Application and Forms
> Project Qualification
> Definitions of Eligible Areas
> Income Guidelines

Terms and Conditions

Term / Program
CIP advances are available in maturities ranging from 30 days to 20 years, according to the schedule below, and based on the FHLBI's funding availability.

Advance Types

Rate
Advances are priced at the FHLBI's cost of funds for obligations of comparable maturity plus a small markup to cover administrative costs.

Commitment
Funds-only commitments will be established when both the community investment and credit departments have approved applications. Initial commitments will typically be issued for up to six months. A one-time three-month extension may be considered for CIP projects, but not for portfolio lending.

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 one business day of the rate lock.

Commitment Fee
There is no commitment fee.

Prepayments
Prepayments may occur subject to applicable limitations and prepayment fees described in the CIP advance terms sheet. The FHLBI must be notified by 2:00 p.m. Indianapolis time for next-day prepayment. Variable rate advances may be prepaid up to 2:00 p.m. the same day.

Refinances
Using CIP to refinance debt is generally not allowed unless certain conditions are met, i.e., to help ensure affordability or project feasibility. Please contact the FHLBI if you plan to use CIP to refinance.

Ownership Residential
Financing of proposed one to four family mortgage loans made to individual homeowners whose incomes do not exceed 115% of the area median income. To qualify as an ownership residential project for CIP, all the project's loans must be closed and funds fully disbursed, or construction draws funded, within a period beginning 90 days prior to the advance takedown date and/or ending date six months from the takedown date. Projects located in targeted areas (see list below) are exempt from income qualifications.

Rental Residential
Financing of rental, cooperative housing, or construction financing for any rental or cooperative development in which: the incomes of at least 51% of the residents do not exceed 115% of the AMI, or the rents for at least 51% of the units are affordable to residents whose incomes do not exceed 115% of the AMI. Rentals qualify if the CIP will fund loans for acquisition, construction, or rehabilitation of multifamily rentals or manufactured housing parks. All loans must be closed and funds disbursed within a period beginning 90 days prior to the advance takedown date and/or ending date six months from the takedown date. Projects located in targeted areas (see list below) are exempt from income qualifications.

Commercial and Economic Development
Commercial and economic development projects must qualify under one of the following areas.

Mixed Use - Rental Residential and Commercial
Combination of rental residential and commercial and economic development.

Projects located in the following areas are considered to be in targeted areas and are exempt from income qualifications.

Updated: September 14, 2010