Federal Home Loan Bank of Boston

VOLUME V / ISSUE 2 / 2012 Funding Supportive In recent decades, Casa Esperanza Housing has received four AHP awards to support its extensive in Boston affordable-housing and substance-abuse recovery services in Boston.

PLUS… Advances Fund Vermont Solar Farms Member Mascoma Savings Bank tapped the Bank’s Community Development advance to fund two renewable energy projects in Vermont. An Interview with HUD’s Regional Administrator Bank Executive Vice President M. Susan Elliott recently sat down with HUD Regional Administrator Barbara G. Fields to discuss the agency’s accomplishments and plans for the coming year. Federal Home Loan Bank of Boston VOLUME V / ISSUE 2 / 2012

MEMBER MATTERS Community Development Advance Provides Key Funding for Vermont Solar Farms Member Mascoma Savings Bank tapped the Community Development 2 advance to provide key funding for two Vermont solar farms.

housing and community investment AHP Profile: Casa Esperanza, Boston Casa Esperanza has received four AHP awards to support its extensive affordable-housing and substance-abuse recovery services in Boston. 10

housing and community investment A Conversation with HUD’s New England Administrator Bank Executive Vice President M. Susan Elliott recently sat down with HUD Regional Administrator Barbara G. Fields to discuss the agency’s 12 accomplishments, priorities, and plans for the coming year.

Results Magazine is published by the THE BANK Federal Home Loan Bank of Boston 1 From the President: Edward A Hjerpe III 800 Boylston Street, Boston, MA 02199 www.fhlbboston.com MEMBER MATTERS For additional copies, or to be placed on 4 Record Increase in MPF Participation the mailing list, please contact the Public Affairs Department at 617-292-9600, 6 More Members Take Down Long-Term Advances or e-mail [email protected]. 7 Fixed-Rate Mortgages: Buy, Sell, or Hold? The mission of the Federal Home Loan HOUSING AND COMMUNITY INVESTMENT Bank of Boston is to provide highly reliable wholesale funding and liquidity 8 Member Interview: The Value of the Bank’s Housing Programs to our member financial institutions in 16 2012 Affordable Housing Program Approvals New England. We deliver competitively priced financial products, services, and THE BANK expertise that support housing finance 19 Ana Dyer and Jason Hwang Join the Bank’s Member Services Team and community economic growth, includ- 19 Members Express Satisfaction with Bank Services ing programs targeted to lower-income households. The Last Word 20 FHLB Boston Around the Region FROM THE Bank

From the President Edward A. Hjerpe III, President and CEO

No Housing-Led Recovery? No Wonder.

Regardless of one’s political views, Further, until the Bureau of Consumer Building materials are purchased, such as it is undeniable that the creation, pur- Financial Protection defines what a quali- lumber, concrete, and yes, even kitchen chase, and sales of housing have direct fied mortgage, or QM, is, and bank regula- sinks. And local businesses benefit as work- effects on the health of our economy. This tors outline what constitutes a qualified ers on the projects spend their hard-earned is the very reason the Federal Home Loan residential mortgage, or QRM, mortgage money in their communities. Later, the Bank System was created by Congress in originators will default to elevated under- housing created boosts local and state 1932 — to supply reliable low-cost funding writing standards, constraining refinanc- revenues when it comes onto the tax rolls. for housing in every business cycle, regard- ing and new originations. Other un- According to the U.S. Bureau of less of the economic or political environ- knowns, like the effects of the recently Economic Analysis, housing contributes ment. Housing must be a substantial part deferred Basel III capital requirements for on average 17 percent to the country’s gross domestic product. In past recessions, a robust upturn in the housing market A recent study sponsored by the Federal helped lead the nation out of recession. Home Loan Bank of Boston concludes Recent reports of increased housing starts and improving home prices indicate that that the creation or preservation of the housing market is beginning to recover, but it is nowhere near prerecession levels. housing has a catalytic, multiplier ef- We still have 10.8 million homeowners who are underwater with their mortgages, fect on the regional economies in which and 1.8 million families in the process of foreclosure. These factors will continue to it is built. be a drag on our economy until they are resolved and critical policies regarding the of economic recovery, but uncertainty in mortgages, and the future tax-deductibili- future of housing are finalized. the mortgage market is inhibiting hous- ty of mortgage interest, undercut the po- Whether we own or rent a home, wheth- ing’s full potential to be an important sta- tential impact housing could have on a er it is market-rate or affordable, housing bilizing force in our economy. lasting economic recovery. is a basic element of our lives and our More than four years have passed since As a consequence, this inaction has led economy. Given the lackluster recovery in Fannie Mae and Freddie Mac were put into to uncertainty and indecision, the enemies the housing market, President Obama and conservatorship. This was supposed to be of growth. the 113th Congress need to move beyond an interim move, a “time out” according to A recent study sponsored by the Federal partisan gridlock and, along with regula- then Treasury Secretary Henry Paulson, Home Loan Bank of Boston concludes that tors, implement sustainable policies that needed to stabilize the GSEs while their the creation or preservation of housing will eliminate the uncertainty around futures were determined. The problem has a catalytic, multiplier effect on the re- housing and help revitalize and fuel re- is that we still don’t know what the future gional economies in which it is built. There gional and national economies. n of the secondary mortgage market will is the immediate creation of jobs, from look like. architects to carpenters and electricians.

A version of the above op-ed appeared in the December 28, 2012 issue of the Boston Business Journal.

Results magazine volume V / number 2 1 member matters

Community Development Advance Provides Key Funding for Vermont Solar Farms by Robert O’Malley

For much of his working life, Naoto alternative technologies from his home in Inoue has been exploring strategies to develop Kennebunkport, Maine. renewable energy, experimenting with wind In 1995, he joined neighbor Peter Talmage and solar energy projects and building super- as a partner in Talmage Solar Engineering insulated homes. Inc., a firm Mr. Talmage founded 20 years An early opponent of nuclear power, Mr. earlier. When Mr. Talmage retired from the Inoue realized that opposing one form of en- firm in 2000, Mr. Inoue became the sole part- ergy — which he considered dangerous — ner in what became Solar Markets. He oper- without offering an alternative left him open ated the firm on his own until his son Kale to charges of hypocrisy and made it more joined as a partner in 2008. difficult for him to effectively argue his case. Fast forward to 2009 when about 11 states, For a time, in the late 1970s and early including Maine and Vermont, passed Feed-In 1980s, the renewable energy industry in the Tariff (FIT) programs, which offer stable U.S. was moving in the right direction, Mr. prices under long-term contracts for energy Inoue says. The U.S. government was offering generated from renewable sources. a 30 percent tax credit for investments in re- The Inoues looked at the Maine and newable energy and many grassroots develop- Vermont programs and concluded that the ers were experimenting with the new technologies. Vermont program was more bankable because it guaranteed 30 But the federal tax credit was discontinued during the 1980s cents per kilowatt hour for 25 years compared with the Maine — a move that Mr. Inoue believes set development of the budding program’s 10 cents per kilowatt hour. The Vermont program was renewable energy industry back by decades. In the years that fol- based on four technologies — hydro, wind, solar, and biomass lowed, companies that were developing renewable technologies — and a maximum aggregate project capacity of 50 megawatts either didn’t survive or were bought out by larger companies such of generated power. as ARCO and BP. When FIT passed in Vermont, the Inoues took the necessary Despite this lack of government support during the 1980s and steps to participate in the program as the developer of a solar into the 1990s — when the need to develop renewable energy to farm. Kale Inoue identified a piece of vacant land in an industrial counteract U.S. dependence on imported oil was not a priority park in Sharon, Vermont and eventually obtained a purchase and — Mr. Inoue continued to explore various strategies to develop sale agreement.

2 Results magazine volume V / number 2 member matters

Vermont’s Sustainably Priced Energy Development Program, or SPEED, which administers the state’s FIT program, se- lected the Inoue’s solar farm project to participate in the program. The SunGen Sharon project includes 9,562, 230-watt solar panels spread over nine acres. The project uses state-of-the-art solar panels that degrade no more than 20 percent over 25 years. “That’s a very good warranty,” Mr. Inoue notes. The panels are manufactured by a Taiwan-based company that uses technol- ogy largely developed in the U.S. A key piece of the equipment — the inverters — are manufactured by a company in Opposite page: The SunGen solar farm in Lawrence, Massachusetts. Sharon, Vermont. Although American companies led the Clockwise from left: John Ziegler at the way early on in developing solar panels, CRL Solar site in White River Junction, many of the panels today are manufac- Vermont; Naoto Inoue; aerial view of the CRL Solar site. tured outside the U.S. Mr. Inoue says that until recently there was virtually no gov- ernment support to keep the renewable- energy industry viable — unlike the Chinese industry that enjoyed considerable all the real estate assets owned by me and electricity will the farms produce? Mr. government support. “We have to look at my wife.’ When you show that kind of Ziegler says a fairly accurate estimate of the long-term picture,” Mr. Inoue says. confidence that you’ll be successful, they the power that can be produced by a spe- “We can’t be making decisions in a four- listen to you better.” cific type of solar panel in a specific geo- year election cycle.” Financing a solar farm project was a graphic area is available through the U.S. Although construction of the solar farm first-time venture for Mascoma Savings Department of Energy. was physically demanding because of the Bank. “I became convinced that it worked “These solar farms are quite new in this need to be at the site during construction, from an economic standpoint,” says John state, but estimating the amount of reve- “the biggest difficulty was financing the Ziegler, vice president at Mascoma Savings nue produced by them should be very reli- project,” says Mr. Inoue, adding that the Bank. “It made a lot of sense because they able,” says Mr. Ziegler. “However, you do project includes long-term financing from get an attractive rate for the electricity have a slightly declining revenue stream member Mascoma Savings Bank, FSB, in produced.” over time, because 25 years out these pan- Lebanon, New Hampshire, and a construc- The project also qualified for a federal els will produce 80 percent of what they tion loan from a Florida finance company. 1603 grant that reimbursed the developer produced on day one.” Mr. Inoue says his son Kale contacted for up to 30 percent of hard and soft costs, To address this reduction in operating Mascoma Savings Bank to gauge the he adds. income over time, the borrower needed bank’s interest in financing part of the “We look at a lot of different credits for fixed-rate financing. “That is why we went project. Mr. Inoue says the key to attracting a lot of different companies, and one of the to the Federal Home Loan Bank of Boston, financing was the company’s track record questions we always have to ask when we which is willing to sell us fixed-rate money and reliability. “We are lucky in everything look at credit is, ‘well what happens if they for five, 10, 20 years,” Mr. Ziegler says. we have been doing since 1995,” he says. can’t sell their product, or what happens “We then passed that fixed rate on to our “There are a lot of solar companies and to their product if they can’t sell it at the customer, who doesn’t run the risk of a renewable energy companies that have price they want or need?’” Mr. Ziegler says. changing interest rate while we as a bank come and gone. “In this case, we know the state will buy don’t have interest-rate risk either.” “I’m willing to put my entire life savings 100 percent of the electricity they pro- To provide that fixed-rate funding for the on the line,” he adds. “When a banker duce, and the state is guaranteeing the SunGen project, Mascoma Savings Bank asks, ‘can you personally guarantee this?’ price of the product for the next 25 years.” accessed a $4.2 million Community I will say ‘yes, I will risk everything I have, Another question to ask is how much Development advance from the Bank.

Results magazine volume V / number 2 3 member matters

“Normally, I go to Don Thompson, our CFO, and say I need some money, and he figures out how to fund it,” says Mr. Ziegler. “But this was pecu- liar in that it had to be fixed for 20 years.” 2012 Sees In addition to funding the SunGen Solar proj- ect in 2012, Mascoma Savings Bank also pro- vided $2.6 million in Community Development Record advance funding to help finance a solar farm developed by CRL Solar, LLC, on land fronting Interstate 91 in White River Junction, Vermont. Increase Bob Grant, manager and owner of CRL Solar, says the firm’s 2.2 megawatt solar farm is pro- jected to produce three million kilowatt hours in MPF of electricity per year. Like the SunGen Solar development, CRL Solar was developed through Vermont’s SPEED program. “We have deployed Participation 10,296 panels,” Mr. Grant says. “The footprint of the arrays is about 10 1/2 acres.” The Federal Home Loan Bank of Boston was on track in November to re- Mr. Grant says funding from Mascoma cord its largest ever annual increase in members participating in its Mortgage Savings Bank as well as a Small Business Partnership Finance® (MPF®) program. Administration 504 loan were key elements in “We’re having a great year,” says Paul Pouliot, first vice president/mortgage making the project financially viable. “I think it manager at the Federal Home Loan Bank of Boston. “We’ll probably have 20 wouldn’t be an overstatement to say that new members join MPF this year, which is a lot for us. We usually have 10 or Mascoma was critical in putting this project 12 each year.” together and getting the job done,” Mr. Grant Mr. Pouliot says members are turning to the Bank’s MPF program to ensure says. “Quite frankly, without financing there is stability in addressing their secondary market needs. “Many of the new mem- no project.” bers have been long-time participants in the secondary market with either “I tip my hat to them for thinking outside the Fannie Mae or Freddie Mac but are concerned that at some point in the near box and being creative in structuring a program future the door to those government-sponsored enterprises will close,” says Mr. that works for us,” Mr. Grant says. “I think they Pouliot. “They want to have an option, and we are the most viable option in the did a great job.” marketplace today.” While Mr. Grant plans to do more solar proj- Almost 200 Bank members are participating in the MPF program now, which ects in the future, he notes that “the industry is includes Original MPF — a credit-risk-sharing product in which mortgage loans extraordinarily fluid. The incentives crafted to purchased by the Bank remain on the Bank’s balance sheet — and MPF Xtra make these projects viable change daily, and so — a product in which loans are passed on to Fannie Mae. timing becomes critical,” he says. “It’s difficult “Having the two types of programs gives the Bank flexibility in meeting the to sit here today and say x,y,z is going to be via- needs of its members,” Mr. Pouliot says. “We encourage members to have access ble a year from now. to both programs and choose the one that best fits their needs.” “I was initially introduced to renewable en- Mr. Pouliot says the MPF program allows members to complete post-closing ergy from the vantage point of deploying solar after funding and avoid the typical master-custodian fees associated with loans on landfill caps,” adds Mr. Grant, who spent the sold directly to Fannie Mae and Freddie Mac. With the MPF Xtra Best Efforts last 15 years redeveloping brownfield sites. “In program, members are able to register a loan without being subject to possible pursuing this initiative, we ultimately picked a pair-off costs. somewhat secluded piece of ground that was Mr. Pouliot says the Bank is currently exploring additional products to pro- zoned appropriately and has the least impact on vide members with new programs to offer its customers. “We believe investors the community.” are interested in buying loans originated by members of the FHLB System be- Both the SunGen Sharon and CRL Solar cause of the quality of the loans,” he says. “Expanding these products to our farms were up and running by the latter half of members provides additional opportunities for profits for the Bank and its 2012. “We’ve been doing pretty well,” says Mr. members.” Inoue. “I’m very happy with it. We have a few projects of similar size or bigger on the drawing “Mortgage Partnership Finance” and “MPF” are registered trademarks of the Federal Home Loan Bank board.” n of Chicago.

4 Results magazine volume V / number 2 member matters

The Federal Home Loan Bank of Boston was on track in November to record its largest ever annual increase in members participating in its Mortgage Partnership Finance program.

Many members recently ap- MPF also ensures that the bank isn’t proved for MPF say participation totally dependent on one wholesaler. in the program expands their sec- “We wanted to be independent,” ondary market options. “We no- he adds. ticed that MPF would give us an Michael Ostrowski, president option to sell loans into the sec- and CEO of STCU Credit Union in ondary market other than to just Springfield, Massachusetts, says one Fannie Mae, which at the time was of the first decisions he made after our only outlet,” says Don Frost, being named the credit union’s new vice president/residential lending CEO in 2011 was to apply for mem- at member Avidia Bank in bership in the Bank. He says he had Hudson, Massachusetts, which worked with the Bank at other insti- received MPF approval this year. tutions and was convinced that But cost was also a factor for membership would provide key re- Avidia. “The yield was higher with sources to help grow his institution. MPF Xtra than we typically got In 2012, STCU Credit Union re- from Fannie Mae,” says Mr. Frost. ceived approval to participate in the “To be honest, we’re using MPF MPF program. “MPF gives our insti- more than we’re using Fannie Mae tution access to good rates, it’s easy now.” to maneuver, and gives my members Mr. Frost says Avidia also took good rates,” says Mr. Ostrowski. “I into account concerns about the future of Fannie Mae as well as make money on it, FHLB Boston makes money on it, and my the value of strengthening its relationship with the Federal Home members make money on it. It’s just a solid well-run program I Loan Bank of Boston, which is nearby and accessible. “Our rep can count on —a win-win for everyone involved.” Bill Dolan has always been very accessible,” he says. “Paul Pouliot Mr. Ostrowski says he plans to use the MPF program and other has also been very helpful and accessible in offering insight into Bank products to increase the credit union’s residential lending. the program and education. There is a lot of value to having a “The Federal Home Loan Bank is local, it’s fair in its handling of local rep that knows you and your people and can come out if collateral and other issues, and it exists to serve its members, he need be to work out issues.” says. “Its products and services are better matched to our needs David Brennan, senior vice president at member Cape Cod Five than the alternatives.” Cents Savings Bank, says his bank decided to participate in the Mr. Pouliot says there are several important considerations that MPF program this year because it was seeking a reliable alterna- make the MPF program valuable to both members and the Bank. tive to larger secondary market players such as Fannie Mae. “It enhances members’ return on capital through participation “Having access to the secondary market is critical to our business in more of our product lines,” he says. plan,” he notes. “We thought FHLB Boston was the best alterna- Participation in MPF also promotes greater interaction between tive.” the Bank and members. “Participating members who sell loans to Mr. Brennan says participating in the MPF program provides us need to interact with us every day,” Mr. Pouliot says. “We are his institution with more freedom to manage how it uses the always talking to them and know their concerns. If they decide

“Mortgage Partnership Finance” and “MPF” are registered trademarks of the Federal Home Loan Bank program, allows the bank to retain servicing, and offers compen- to keep loans in their portfolio, we are aware of that need and can of Chicago. sation through the risk-sharing component of the program. Using offer them alternative funding options such as cash advances.” n

Results magazine volume V / number 2 5 member matters

More Members Take Down Long-Term Advances

n an effort to make additional funding options available to CDs or money market accounts, which is something the entire members, the Federal Home Loan Bank of Boston recently industry faces,” he says. “The reason we go to the Federal Home offered a number of long-term advance specials to help Loan Bank for long-term funding is to balance out the short-term members prepare for a rising interest-rate environment. funding our retail network creates.” “With the Fed’s position to hold interest rates low until Other member institutions are also drawing down long-term 2015,I the urgency to take immediate action to position the bal- Bank funding to help fund robust loan growth. Laurie LaChapelle, ance sheet for higher rates has not been present,” notes M. Susan vice president of finance at member Digital Federal Credit Union Elliott, executive vice president/chief business officer at the in Marlborough, Massachusetts, says her institution accessed the Federal Home Loan Bank of Boston. “Still, members who have Bank’s long-term specials to pay off earlier Bank advances with experienced loan growth or are liability-sensitive want to begin higher rates, and to address an increase in loan demand. to layer in protection over the long term.” Founded to serve employees of Digital Equipment Corporation Ms. Elliott says members have borrowed more than $1.25 bil- in the late 1970s, Digital Federal Credit Union is now the largest lion in long-term advances during the first 10 months of 2012. credit union in New England. In 2012, the credit union accessed “The Bank has offered a variety of business solutions to address the Bank’s five- and seven-year bullet specials to help support members’ varying needs, but long-term advance specials have growth in both its auto and residential loans. been particularly attractive, with five-year Classic advances as low Ms. LaChapelle says she recently undertook additional analysis as 99 basis points,” she says. to determine if another round of long-term borrowing in 2012 “The Flipper advance has given members the opportunity to would be beneficial to keep up with loan demand. “I think it’s take down funds at sub-LIBOR rates with the potential for the rate likely that we will borrow again,” she says. to ‘flip’ to an attractive fixed rate after a lock-out period of one to Donald Thompson, senior vice president/chief financial officer three years,” Ms. Elliott adds. “Some members who have taken at member Mascoma Savings Bank, FSB, in Lebanon, New advantage of the Flipper currently are enjoying a negative ad- Hampshire, says his institution also recently took advantage of vance rate.” the Bank’s low long-term rates. “We took a long-term advance to Ms. Elliott says interest-rate caps have also proven to be cost- lock in long-term money because we felt that rates had come down effective and attractive when combined with floating or fixed-rate low enough and it made sense to lock in a position,” he says. funding. “From a risk perspective, locking in long-term funding was pref- Christopher Lake, senior vice president/chief financial officer erential at that time.” at member Peoples Federal Savings Bank in Boston, says net loans “Should rates rise down the road, the rates on our short-term at his institution were up in 2012. “And while lending in some funding will ratchet up, which will cost us more in the long run,” banks was reported to be a little slower in the Boston area, it has Mr. Thompson adds. been robust for us,” he says, adding that the long-term funding “Historically, our data shows that members tend to wait until the bank recently took down “will definitely be used to augment rates are near peak before borrowing long term,” notes Ms. Elliott. our liquidity and to lend out.” “Certainly this has much to do with investment alternatives for Mr. Lake says his institution’s decision to take down long-term members’ customers and an economy that is showing growth, funding this year was not part of a strategy to go long at the ab- both of which are not particularly evident today.” solute bottom. “We know that the rates have been a bit of a roller- Ms. Elliott says preliminary FDIC data shows that members’ coaster ride and that they go up a little and down a little,” he says. loan mix appears to be extending into longer maturities. “The “The timing is due more to our funding needs than to the absolute potential for a dramatic rise in rates is a risk factor to consider,” lowest level of price.” Ms. Elliott says. “While we wouldn’t bet the balance sheet on a He also notes that the bank’s goal is to balance long- and short- rate increase in the near term, we would be looking to layer in term funding. “Retail funding is pushing short for either one-year some protection.” n

6 Results magazine volume V / number 2

member matters Fixed-Rate Mortgages: BuySellHold?

by Marianne Cacciola, Financial Strategist

The one-time gains generated by the as they outgrow their starter home. Could In an effort to reach growth and income sale of fixed-rate mortgages into the sec- the average life of the 30-year fixed rate targets, some members have been purchas- ondary market in 2012 may be difficult to mortgage actually prove to be shorter? ing mortgage-backed securities at a pre- replace in 2013 and beyond. The challenge Funding 30-year fixed-rate mortgage mium. The rate sensitivity of the underlying of originating new mortgages each month originations with a blend of FHLB Boston mortgages may have caused the mort- in order to maintain stability in the income advances allows a member to generate gage-backed security to prepay faster than stream may prove daunting for loan offi- spread income, while hedging a portion of projected as mortgage rates have contin- cers. the interest-rate risk. Wholesale funding ued to decline, leaving little yield as the If your institution has adequate capital across the curve is near historic low-rate premium is amortized. If loan demand is to grow the balance sheet, you could re- levels, and the margin for funding mort- slow in your market area, have you consid- place some, if not all, of this lost income by gages is historically wide. The net interest ered offering a below-market rate in order holding your fixed-rate production, even spread available today makes a compelling to generate volume instead? the 30-year product. Holding mortgages case to retain and fund mortgage origina- Members who are selling their mort- on the balance sheet can provide both loan tions. gage production might be forgoing the growth and an annuity stream of income. As an example, by funding the mort- opportunity to maintain a valuable income Members generally convey to us that they gage originations with a combination of 40 stream. By funding the mortgages you are are not willing to hold 30-year fixed-rate percent of the seven-year Classic advance originating today, you can eliminate the mortgages on the balance sheet at the cur- and 60 percent of a seven-year Amortizing risk that the tide will turn on the rate out- rent rates, and are therefore selling any pro- advance, a member can lock in the net in- look before you put on the insurance poli- duction. While most members are willing terest spread on the originations for the cy to protect future earnings. Long-term to hold 10-, 15- and 20-year fixed-rate mort- first seven years with an initial net spread advances are readily available, historically gages, the assumption that the asset aver- in excess of 200 basis points. In this scenar- cheap, and provide the funding and hedg- age life will be shorter may be misguided. io, even if rates rise 300 basis points, the ing tool allowing you to retain your long- The typical borrower of the shorter fixed- average net spread is projected to be about term mortgages. In the financial strategies term mortgage is likely looking to pay off 200 basis points over the first seven years. department, we are continuously analyzing their mortgage as they prepare for retire- Alternative funding scenarios that some customized funding allocations for the ment, and will generally make few if any members have employed include using a membership and we would be happy to prepayments. The borrower profile of a 30- ladder of Classic advances out to seven work with you to home in on your specific year fixed-rate mortgage tends to be a first- years, a barbell funding approach relying goals and objectives. Please contact your time home-buyer who is concerned with on a mix of long- and short-term advance relationship manager or a financial strate- the ability to afford the monthly payment, funding, or incorporating the Classic Plus gist to discuss your institution’s unique and may be likely to prepay the mortgage Cap advance as a hedging tool. funding requirements. n

Results magazine volume V / number 2 7 Housing and Community Investment

Member Interview

The Value of the Art Casavant Bank’s Housing Programs “There’s a level of professionalism and skill that comes from the FHLB, which facilitates better structuring of transactions for everybody involved.”

Kenneth A. Willis, first vice president/director Development advance help you advance Tax Credits, historic tax credits, or New of housing and community investment, that strategy? Markets Tax Credits. This creates a really recently met with Art Casavant, community AC: The role of the FHLB is enormously wonderful collection of ideas that eventu- reinvestment officer/economic development important — even when the transaction ally helps to get the financing done. manager at member People’s United Bank in doesn’t necessarily include FHLB money. KW: The AHP is a source of equity for af- Bridgeport, Connecticut, to discuss the impact I’ll give you an example of how this works. fordable housing projects but it also helps that the Bank’s housing programs have on Many of the affordable developments in you on a lending basis because 99.9 per- members’ community-development strategies which People’s United has been an investor cent of these transactions usually include and business. wouldn’t have happened without the abil- some kind of end loan coming from you or Kenneth Willis: People’s United Bank ity of smart people to put together many a member bank. Can you speak a little bit is a premier commercial bank in the different funding sources. There are usu- about how the AHP helps mitigate some of Northeast. What is your Bank’s philosophy ally five, six, sometimes seven sources of the risk? on community lending? funding, and every one of those sources is AC: Well, there are two ways that happens. Art Casavant: The bank’s philosophy is necessary to get the job done. The AHP The first is obvious. Any additional capital rooted in the notion that the most impor- component, for example, can be relatively in a sources and uses statement makes any tant thing we can do for all communities, small compared to the total collection of deal better. But where it really matters is particularly low- and moderate-income sources, but it’s a catalyst that helps bring the extra analysis FHLB participation pro- communities, is to aggressively look for the other pieces together. The AHP also has vides. The process of getting AHP funding loan opportunities, provide deposit servic- a tendency — and it’s a wonderful tenden- or even Community Development advance es, and invest in a way that supports cy — to get us thinking about what can funding causes both the borrower and the economic growth. In low- and moderate- happen, as opposed to why something bank to be better prepared and to think of income communities, we want to extend shouldn’t happen. This includes the appli- the optimal way to do the financing. credit whenever it is plausible, in a way cation process, when we get to see many There’s a level of professionalism and skill that is inclusive and fair. We never want to prospective applicants, some of whom we that comes from the FHLB, which facili- extend credit if we believe it will damage a can support, some of whom we can’t. But tates better structuring of transactions for customer. If a customer is ineligible for each engages our lending and investing everybody involved. In addition, involve- credit, we want to help provide access to professionals in a long discussion of spe- ment of the FHLB adds a level of integrity funding via a community development fi- cific project ideas.T he developer may de- to the transaction that is hard to measure. nancial institution we support with lines cide they are not going to apply for an AHP It gives everybody a level of comfort that of credit and, in many cases, with equity this year but may come back the following there is full disclosure, a well-thought-out investments. year or conclude perhaps that the AHP is plan, and a supportive community behind KW: You mentioned expansion of econom- not going to work for them. But through a project. A good example is some of the ic development. How do the Bank’s the AHP process they have benefitted from deals that we have done up in Vermont, Affordable Housing Program, Equity conversations on various sources of fund- where we have combined HUD money, Builder Program, and Community ing, including Low-Income Housing state money, FHLB money, and the bank’s

8 Results magazine volume V / number 2 housing and community investment

“In addition, involvement of the FHLB adds a level of integrity to the transaction that is hard to measure. It gives everybody a level of comfort that there is full disclosure, a well-thought-out plan, and a supportive community behind a project.” money in a variety of debt and equity to KW: In the housing department we are al- business plan. For us the FHLB is a critical produce housing. It’s a wonderful and very ways preaching that an AHP award should partner. It’s the only partner we see in ev- complex system but in the end a lot of this benefit the housing project as well as the ery one of our markets, which is extremely just wouldn’t happen without the FHLB in member’s business. Can you speak a little important. We have some other critical the middle of it. about business opportunities in communi- partners, including funds sponsors like KW: Does your participation in the AHP ty-development lending and how the FHLB Housing Vermont, Northern New Eng- also assist your organization in meeting programs allow you to realize additional land Housing Investment Fund, and your Community Reinvestment Act re- opportunities in the community lending Massachusetts Housing Investment quirements? space? Corporation, but they aren’t in every one of our markets. The enormous value of the AC: The FHLB assists us on all three tests AC: Our business opportunities are unlim- FHLB is that it’s in every one of our mar- of CRA. It helps us in our lending, it helps ited. We want to serve as many clients and kets, has excellent professionals, and has us in our investing, and it helps us in our customers as humanly possible within our people who are focused on the same goals service component. On the lending side, footprint, which basically is five of the New as we are to expand access to credit and in- simply having the ability to go to the England states and a hefty chunk of New vestment in low- and moderate-income Community Development advance if we York. In every case, we are trying to find communities. need to is important in our underwriting transactions that will have the greatest im- process. We haven’t been a big user of the pact on low-income communities. We do KW: Is there anything else the Bank can Community Development advance but only not lack for opportunities. If we start with do in addition to AHP, EBP, and CDA to help because we are basically deposit-funded 50 possible lending opportunities, we you expand access to credit in low- to mod- and have been able to fund loans ourselves. know that perhaps 25 of them are ready to erate-income communities and accomplish But the availability of that is enormously go now and 25 either will never happen or your community lending goals? important. On the investing side, having won’t happen until later. But using FHLB AC: The most important thing the FHLB AHP money in a project makes our decision standards as a baseline helps us to start the does is to provide consistent support to invest either directly or through a Low- discussion about how the deal needs through each of those housing programs Income Housing Tax Credit project that to be modified and what it needs to be done as well as valuable information. That con- much easier. And on the service side, the to give it enough legs to receive credit. sistency is enormous. There’s also the fact ability to have the FHLB’s community de- Credit can be received on a pure market ba- that the FHLB is there to support the gen- velopment staff available to help us with sis, on a community-development financial eral funding needs of member banks — respect to customers is enormous. The staff institution basis, or on a government- never mind just our community-develop- isn’t huge but is very effective at encourag- agency or program-eligibility basis. All of ment operations — which facilitates an ing people to think of alternative ways to them are good ways to get credit to market, incredible amount of good volume. I would fund projects. Also, the regional forums but the essence of what the FHLB does is always be happy if there were additional sponsored by the Bank are attended by de- help encourage the discussion to help us AHP dollars available, but that is a func- velopers, not-for-profits, state agencies, and come up with the most effective vehicle for tion of the reality all of us are facing in our bankers — virtually everybody who gets providing financing. markets. We would always like to do more, involved in affordable projects. Without KW: Is it fair to say then that when you do but it’s more important for us to do high those regional forums, you aren’t necessar- strategic planning at the beginning of a quality transactions that both you guys ily able to get a concentration of people in year you consider the FHLB as part of how and we support. a room to discuss important issues. This you’re going to meet some of those objec- KW: I want to thank you for spending this may not count for CRA, but the FHLB’s role tives around lending and community- time with me today. We enjoy working of convener is important. If you get bank- development lending? with Peoples United on all of its transac- ers in a room with other smart people AC: Actually, we take it a step higher than tions with the Bank and look forward to (some people might say the bankers aren’t that. For example, when we go to our se- doing a lot more with you in the future. n very smart) they’re more likely to come up nior management committee in early with better ideas. November, we talk about the next year’s

Results magazine volume V / number 2 9 housing and community investment

AHP Profile: Boston Massachusetts Casa Esperanza Supportive Housing by Robert O’Malley

When Arthur MacKinnon became homeless two and a abuse, and their children. In 2002, Familias Unidas, 11 affordable half years ago, he knew he had to make some dramatic changes single-room occupancy units and apartments with supportive in his life. Alcohol was destroying his health to the point where services for graduates of substance-abuse treatment programs he could barely walk. and their families, was awarded a $313,000 AHP grant and a “I decided it was time to get sober,” says Mr. MacKinnon, seated $403,145 subsidized advance (with a $52,643 advance subsidy). in his studio apartment at Nueva Esperanza, an affordable hous- And in 2001, Dunmore Place — six affordable apartments for ing complex operated by Casa Esperanza — a Roxbury-based women recovering from substance abuse — was awarded an nonprofit that provides housing and supportive services for people $85,000 AHP grant. Three of these AHP-funded housing sites recovering from substance abuse. are adjacent to Nueva Esperanza on Eustis Street and the fourth A Salem native, Mr. MacKinnon entered a seven-month recov- is a block away. ery program in Boston and was living in a temporary single-room Founded in 1984 by Ricardo Quiroga in response to a growing occupancy unit when he learned about Nueva Esperanza. “I came substance abuse problem in Boston’s Latino community, Casa down here and looked at it and I couldn’t believe it,” he says. “It Esperanza opened as a bilingual, Spanish-English residential treat- was brand new; nobody had lived here before. ment program for men in a Eustis Street building acquired from “I couldn’t ask for any better support than what I have now,” the city for $1. Since then, the organization has expanded to in- adds Mr. MacKinnon. “If I get the urge to drink, I have phone clude 37 units of supportive, permanent housing and an outpa- numbers to call even when the office is closed; Eric, the manager, tient program that provides relapse-prevention and after-care gave me his cell phone number and said to call him right away if services for men, women, and children. I feel like drinking — that’s how much support you have here.” Most of Casa’s housing — which includes single-resident oc- Funded in part by a $400,000 grant and a $570,000 subsi- cupancy units and apartments for low- and very low-income dized advance (with an advance subsidy of $129,226) from the residents — is Section 8 subsidized, says Emily Stewart, the orga- Federal Home Loan Bank of Boston’s Affordable Housing Program nization’s executive director. through member RBS Citizens National Association, Nueva “Rick knew that one of the greatest challenges our folks face Esperanza includes 14 affordable studio apartments with sup- when they completed their residential treatment was that they portive services for people recovering from substance abuse. The were still homeless, and that homelessness became an enormous housing was built following the demolition of an existing struc- trigger for relapse,” says Ms. Stewart. “Today, all of our services ture on the site. are geared towards helping people become independent by provid- In addition to the Nueva Esperanza award, Casa Esperanza has ing a combination of substance-abuse treatment services, mental- benefitted from three other AHP awards. In 1994, the organiza- health services, and housing services, as well as access to educa- tion’s Latinas Y Ninos initiative was awarded a $127,500 AHP tional programs and vocational training.” grant to provide housing for women recovering from substance Referrals to the organization’s supportive housing come primar-

10 Results magazine volume V / number 2 housing and community investment

Left: Emily Stewart at Nueva Esperanza. Right: View of the Dunmore Place project.

ily from the Boston Housing Authority and on Eustis Street. “Through our partnership Eustis Street has contributed significantly the Metropolitan Boston Housing with Boston Health Care for the Homeless, to stabilizing the Dudley Square neighbor- Partnership. A limited number of units are we have a psychiatric nurse practitioner hood in which it resides. “Both the men’s unsubsidized to accommodate residents here one day a week to prescribe medicine programs and the women’s program were who have difficulty accessing Section 8 and provide medication evaluation,” Ms. developed from abandoned buildings in an vouchers. Many of Casa’s residents have Stewart says. “We really have a full spec- area that looked like a war zone,” says Ms. disabilities or serious chronic illness, and trum of behavioral and social services that Stewart. “I think anybody coming to Eustis about 25 percent are HIV positive. are available right here on campus, and we Street now would see a thriving neighbor- “The vast majority of our residents are have strong community partnerships that hood and a real sense of community.” living with co-occurring mental health enable us to refer our clients to other pro- Ms. Stewart says the organization plans disorders and substance abuse, including viders that have the services they need if to continue its expansion, possibly to other those in our family units,” says Ms. we don’t offer them on campus. Boston neighborhoods or cities with large Stewart. “We understand that substance “Most of our residents are well below 30 Latino communities. “One area of particu- abuse and mental health are generational percent of the area median income and are lar importance and focus for us is provid- issues, familial issues that affect the entire considered extremely low income,” says ing integrated substance-abuse, mental- family.” Ms. Stewart. “The Section 8 voucher for health, and primary-care services on our The organization’s supportive services most of them covers the majority of their campus, including becoming a federally include on-site case managers in the rent, but residents who are working pay qualified health center,” she says. “We Nueva Esperanza building as well as out- more as their income increases and they would hope to become a culturally focused patient substance-abuse and mental- move toward greater levels of indepen- health home for the people we serve and health counseling, HIV counseling and dence.” use that as an umbrella to expand our testing, education, group counseling, and In addition to impacting the lives of its other services, including supportive hous- other services in its Familias Unidas Center residents, Casa Esperanza’s campus along ing.” n

Recovering from Substance Abuse: Arthur MacKinnon’s Story When I graduated from high school I got a job at Parker Brothers, which was a game factory in Salem. I worked there for 12 years. I moved from machine operator to lead man — the person who sets up the machines. When the company sold out and moved to Springfield, I went back to school and took up the machinist trade. I was a machinist for the rest of my life and worked for about 14 years at a couple of places in Beverly. I wasn’t a slouch. I enjoyed my work. I had only three jobs my whole life. I enjoyed what I did, but I became dependent on alcohol. It was fun at first, but it got to the point where I was drinking every day. I would drink in the morning to get rid of the shakes. That was how I became handicapped. I developed neuropathy in my legs from drinking too much. I ended up getting three herniated discs in my lower back. I was just falling apart, and it was time to wake up. I woke up by getting sober and coming here (to Nueva Esperanza.) Living here has been great for me. I’m very happy now. n

Results magazine volume V / number 2 11 housing and community investment

A Conversation with HUD’s New England Administrator In November, Barbara G. Fields, New England regional adminis- trator of the U.S. Department of Housing and Urban Development, sat down with M. Susan Elliott, executive vice president and chief business officer at the Federal Home Loan Bank of Boston, to discuss Ms. Fields’ work at HUD and her plans for the upcoming year.

Left: M. Susan Elliott, executive vice president and chief business officer at the Federal Home Loan Bank of Boston. Right: Barbara G. Fields, New England regional director of the U.S. Department of Housing and Urban Development.

12 Results magazine volume V / number 2 housing and community investment

Susan Elliott: You’ve been in office for contracts to public housing and multifam- a year. What do you consider to be your ily developments. Congress gave us permis- major accomplishments? sion for up to 60,000 public housing units Barbara Fields: I have always been a nationwide and an unlimited number of team builder. It’s been very exciting to multifamily units. We don’t know yet what work with HUD staff from the multifamily the appetite is in the private market for fi- housing division and put them in a room nancing this housing, but we are working with staff from our public housing or com- hard to roll out this new program. Fourth, munity development or fair-housing divi- we will continue our work on the sion. More important, it has been exciting Sustainable Communities and Choice to get them out in the field together. Last Neighborhoods programs. I have a passion year, I asked each of our field directors to for both of these programs. It’s the type of choose at least one site in their respective comprehensive community building I was states where they felt there was a challenge doing for a decade before coming to HUD. or where HUD could add value. One site New England regions from rural Maine to chosen was Brattleboro, Vermont. There Boston have received 28 Sustainable had been a fire in a major downtown resi- Communities grants. This program ex- dential/commercial building and after that plores the connection between transit, the area was hit by Hurricane Irene. We housing, jobs, brownfield cleanup, etc. It took the HUD team to Brattleboro to have involves partnerships between EPA, HUD, meetings with the town manager, neigh- and DOT. Choice Neighborhoods involves borhood residents, the public housing au- collaboration between HUD and agencies thority, and the economic development such as the Department of Education and planner. We were all thinking together the Department of Justice to help revitalize about the challenges Brattleboro faces as neighborhoods. Some people may say the dollars for these programs are small com- it rebuilds: Where is the housing going? are likely to have most of the same leader- pared to the overall HUD budget but these How should we be rebuilding downtown? ship team in place. The first priority is to are demonstration programs that help us Where is appropriate to do mixed use? We strengthen the housing market beginning learn what works and what doesn’t. had a HUD team at the table talking about with the foreclosure situation and getting Choice Neighborhoods was built on the the implications for public housing, block assistance to people most in need. The at- former HOPE VI program. We’re expand- grant money, and Section 108 (economic torneys general in New England have been development funds). I think the people working with us to make sure that the ing beyond public housing to multifamily there really appreciated seeing HUD staff money from the $25 billion settlement housing and beyond housing to people and together like that. In addition to our inter- goes where it was designed to go. I am par- neighborhoods. We are always trying to nal “cross” program work, we are also fo- ticularly proud of HUD for continuing to learn from past lessons. cusing on working across federal agencies. work on homebuyer counseling. It’s not SE: You have put a premium on traveling For example, I recently went with some just about buying a home but also about throughout the district, talking to housers, HUD senior staff to meet with the senior offering people an opportunity to think policymakers, financial types. What can staff at the Environmental Protection about financial planning. Second priority you share about what you have learned Agency (EPA). We have a fair-housing divi- is preventing homelessness, especially from these stakeholders? Any emerging sion and they have an environmental jus- among veterans. Each New England state trends? tice division. How could we begin working is vying to be the first to end veteran home- BF: I recently took a group from HUD to together in a communities like New lessness. It’s a competition I would like see the Sandywoods Farms development in Bedford or Nashua? The cross agency and them all to win. Third, we continue to fo- Tiverton, Rhode Island. They were pretty the cross program work has been very re- cus on the preservation of existing hous- speechless. HUD has invested a lot of mon- warding for me. ing. We will never make inroads if we lose ey in that project along with the Federal SE: Can you talk a little about your priori- the housing stock we currently have. Home Loan Bank of Boston, LISC, and ties for 2013? HUD’s Rental Assistance Demonstration Rhode Island Housing. That is such an in- (RAD) program involves attracting private BF: I think HUD’s priorities will remain the novative and groundbreaking project — resources by giving long-term Section 8 same. Clearly with the recent election we artist housing, open space, community

Results magazine volume V / number 2 13 housing and community investment

“Many people are thinking: how are we going to operate with fewer resources, what does this mean for us? I see people at the local level doing what we are doing internally at HUD — reaching out to form partnerships.”

gardens and a wind generator all connect- plementation grants. But our resources are ed in one community. We do not lack for limited, and other options, such as working innovative and efficient ways to use our with the RAD program and investments money. It’s important to go around and see from philanthropy, need to be considered how our money leverages tax credits or to carry out the projects. Norwalk and Federal Home Loan Bank funding. In gen- Providence are proposing to take down se- eral, I think we are trying to bring that riously outdated housing and rebuild it, same spirit of partnership to many of our but their proposals also include elements programs. What I like to do is bring people such as a walking path or a community together and cross fertilize. If I see a great garden at a neighborhood school. So it idea in Lewiston, Maine, I’ll share it with isn’t just the housing that is important. someone in Burlington, Vermont. Many The program is trying to break down old people are thinking: how are we going to patterns and to think more comprehen- sively about the community. This is a new operate with fewer resources, what does BF: We are very fortunate in New England approach for HUD. this mean for us? I see people at the local to have a number of Choice Neighborhoods level doing what we are doing internally at grantees. Choice planning grants of SE: What are the challenges that are ex- HUD — reaching out to form partnerships. $300,000 are given to a city, a nonprofit, pected next year for housing policies in There was recently a meeting in Vermont or a public housing authority. These grants New England? where public housing authorities met with focus on public housing, multifamily hous- BF: I think the demands are great and the nonprofits.T he two groups always saw ing, or both. Boston, Springfield, budgets are tight. The question for us is themselves as competitors, but they were Providence and Woonsocket, Rhode how can we be value-added? Governor in a room together figuring out how they Island, and Norwalk, Connecticut received Deval Patrick recently announced that he could collaborate and work together to planning grants. In addition to the plan- wanted to see 10,000 new units of hous- serve Vermont. This is something I’m see- ning grants, there are large-scale imple- ing a year for the next eight years. It’s an ing a lot more of across the region. In a mentation grants of between $20 and $30 ambitious plan. While only 15 or 20 per- meeting I recently attended with the may- million. Boston received a $20.5 million cent of that is going to be affordable, quite ors of Bridgeport, Norwalk, Stamford, and implementation grant, but only $15 mil- honestly we can’t meet the challenges if New Haven, the Mayor of Bridgeport said: lion will be used for housing. Of the $6 mil- we’re not working with private sector part- ‘these were my competitors before, but lion remaining, $3 million will go into ners like the Federal Home Loan Bank now we are in this room to start a discus- community projects that complement the or federal agencies such as the U.S. sion — thanks to funding from HUD.’ housing and $3 million into community Department of Agriculture (USDA). We SE: Boston has received a number of services. We’re committed to this relation- need to partner with USDA, other agencies, grants from the D.C. office – most recently ship of people, neighborhoods, and places. housing-finance agencies, community-de- one of only 17 Choice Neighborhood The idea is to use the planning grants to velopment corporations, and for-profit de- grants awarded across the country. Could think about a neighborhood-based trans- velopers. This administration is focusing you comment on how this process to revi- formation that is centered on housing but on transforming how we do our business talize public housing and transform neigh- goes beyond housing. Many recipients of internally and externally. If our budget borhoods will work? planning grants also want to apply for im- isn’t going to change dramatically, the

14 Results magazine volume V / number 2 housing and community investment

“I was thinking today how 62 families have already moved into a development in Lawrence I recently visited. That means they will be spending this holiday season in a place where they want to be, where they will stay, where they will build family traditions…”

question is: how are we going to be efficient and doing her homework there, thinking in what we do and effective on the ground? about the neighborhood in Woonsocket, SE: We seem to run into each other more Rhode Island, where Joe Garlick of often than ever at celebrations for housing NeighborWorks Blackstone River Valley re- projects that have received both AHP and stored 25 abandoned buildings — with HUD funding. How can we continue to support from the AHP — in the early work together to create these synergies? 1990s and where there’s now a Boy Scout troop for the first time in 40 years. I’m BF: When we’re out together, we’re work- thinking too about Ollie’s Pizzeria, a small ing together. But we can do more around business that undertook a major façade mutual investments and promoting vari- upgrade because business improved after ous funding rounds. We also want to see new housing opened nearby. So it’s not a what kind of projects you are funding, par- choice between economic development ticularly the ones where we have money. and housing — the two go together. I re- We each have our own underwriting and noticeable improvements in our opera- cently heard a young woman in Rhode do things differently, but this is a new tions. The secretary has a large agenda but Island read her award-winning essay on world and it’s going to take all of our re- a very clear vision that has been helpful to “what home means to me.” She read it at sources to get things done. I’d also like to those of us who help him carry it out. a public housing event in front of a sena- mention a valuable tool available at hud. SE: Do you have any thoughts on what af- tor, two congressmen, a mayor, and the gov that may be of interest to your readers. fordable housing means to the people who head of Rhode Island Housing. There It’s called CPD maps, and it allows users to live in it? wasn’t a dry eye in the room. This girl was see where HUD has been investing its re- 14 years old. One Sunday her parents took sources. Eventually, I hope that it will show BF: If a child walks into a school where the her and her sister up to a house. They our multi-family investments as well. walls are peeling and there are not enough books and there is no modern technology, asked her, “where are we?” She answered SE: Would you please share with us what message are we sending? It’s the that they were stopped in front of some your thoughts about the upcoming same thing with housing. Housing is a house. When they responded ‘this is our Administration and Secretary Donovan’s starting point. You have to wake up some- new house,’ she couldn’t believe she was housing goals for the upcoming year? where in the morning and go to school or going to live there. She wrote about how BF: The Secretary is committed to the pri- go to a job or go to job training or go to a she could close her door and have orities that I outlined earlier. They will re- senior center. I was thinking today how 62 sleepovers now. She wrote how she eventu- main our priorities in 2013. In addition, families have already moved into a devel- ally got a dog. Before she moved there late in the first administration the secre- opment in Lawrence I recently visited. That she had been living in a basement with tary brought on a new deputy secretary, means they will be spending this holiday her mom and stepdad. So on some level it who is focused on HUD internal opera- season in a place where they want to be, is not rocket science. We know what we tions. He said recently that we can’t have where they will stay, where they will build need to do. n good programs and services if we don’t family traditions and celebrate holidays. have good operations. So I’m hopeful that I’m always thinking about this, thinking in this second term you’ll continue to see about the kid who was living in a shelter

Results magazine volume V / number 2 15 Housing and Community Investment

Bank Announces 2012 Affordable Housing Program Approvals 2012 AHP Awards Bloomfield, Connecticut Dover Foxcroft, Maine Windsor Federal Savings & Loan Bangor Savings Bank The Federal Home Loan Bank of Boston Association MaineStream Finance, Penquis CAP, Inc. awarded more than $14.2 million in grants Hartford Area Habitat for Humanity $60,000 grant and rate subsidies to fund 48 initiatives in $150,000 grant 2 ownership units the 2012 Affordable Housing Program. 6 ownership units Piscataquis County Restoration Project the awards will create or preserve 1,004 Hartford Habitat Bloomfield Development rental and ownership units for very low-, Ellsworth, Maine low-, and moderate-income individuals and Bridgeport, Connecticut Machias Savings Bank families. Connecticut Community Bank, N.A. Penquis CAP, Inc. in the 2012 round, the Bank received 57 Habitat for Humanity of Coastal Fairfield $300,000 grant applications requesting over $17.6 million in County 26 rental units grants and advance subsidies. Forty-eight $336,000 grant Leonard Lake Senior Housing applications, or 81 percent of total applica- 14 ownership units tions received, were approved for AHP Bridgeport Neighborhood Build 2 Houlton, Maine subsidy awards. Bangor Savings Bank thirty of the awards will create or pre- Niantic, Connecticut Houlton Band of Maliseet Indians serve 889 rental units, while 18 awards will Liberty Bank tribal Housing Authority create 115 ownership units. Habitat for Humanity of Southeastern $250,000 grant Connecticut 28 rental units $25,000 grant Maliseet Revitalization Project #1 1 ownership unit Flanders Road Home Acton, Massachusetts Leominster Credit Union Stamford, Connecticut Habitat for Humanity North Central People’s United Bank Massachusetts Mutual Housing Association of $30,000 grant southwestern Connecticut, Inc. 1 ownership unit $386,257 grant and subsidy, Habitat for Humanity North Central $700,000 advance Massachusetts 47 rental units Trinity Park Amherst, Massachusetts Easthampton Savings Bank Bangor, Maine Pioneer Valley Habitat for Humanity People’s United Bank $19,627 grant Penobscot Community Health Center 1 ownership unit $400,000 grant Belchertown Road – Amherst 48 rental units Hope House Transitional Housing Boston, Massachusetts Renovation Project Boston Private Bank & Trust Company United Housing Management, LLC Brunswick, Maine $400,000 grant Bath Savings Institution 73 rental units Greater Brunswick Housing Corporation, Roxbury Hills Brunswick Housing Authority $505,477 grant and subsidy, $400,000 advance 15 rental units Brunswick Affordable Apartments 2012

16 Results magazine volume V / number 2 Housing and Community Investment Housing and Community Investment

Boston, Massachusetts Haydenville, Massachusetts Orleans, Massachusetts Bank of America Rhode Island, N.A. People’s United Bank Cape Cod Five Cents Savings Bank Planning Office for Urban Affairs Hilltown Community Development Habitat for Humanity of Cape Cod, Inc. $273,251 grant and subsidy, Corporation $133,932 grant $1.4 million advance $313,731 grant and subsidy, 5 ownership units 33 rental units $350,000 advance Habitat for Humanity Namskaket Homes St. Kevin’s Residential 11 rental units Haydenville Village Center Apartments Rockport, Massachusetts Chelsea, Massachusetts Rockport National Bank Boston Private Bank & Trust Company Lawrence, Massachusetts Supportive Living, Inc., Old Farm Inn, Inc. The Neighborhood Developers Enterprise Bank and Trust Company $398,302 grant and subsidy, $300,000 grant Merrimack Valley Habitat for Humanity $400,000 advance 10 rental units $239,815 grant 6 rental units 215 Shurtleff 10 ownership units Old Farm Rockport 100 Parker Street Danvers, Massachusetts Salem, Massachusetts North Shore Bank, A Co-Operative Bank Lowell, Massachusetts Bank of America Rhode Island, N.A. Habitat For Humanity – North Shore, Inc. Eastern Bank Planning Office for Urban Affairs $58,118 grant Habitat for Humanity of Greater Lowell $400,000 grant 2 ownership units $36,666 grant 51 rental units Mill Street Danvers 4 ownership units St. Joseph’s Redevelopment Transforming Neighborhoods, Transforming Falmouth, Massachusetts lives Neighborhood Revitalization Turners Falls, Massachusetts BankFive initiative in Lowell’s Acre Greenfield Savings Bank The Resource Inc Pioneer Valley Habitat for Humanity $97,300 grant Lynn, Massachusetts $29,910 grant 3 rental units North Shore Bank, A Co-Operative Bank 1 ownership unit 20 Shore Street Habitat For Humanity – North Shore, Inc. Franklin County – Warner Street $89,637 grant Florence, Massachusetts 3 ownership units West Tisbury, Massachusetts Florence Savings Bank Grover Street, Lynn Martha’s Vineyard Savings Bank Pioneer Valley Habitat for Humanity Habitat for Humanity of Martha’s Vineyard New Bedford, Massachusetts $59,536 grant $50,639 grant 2 ownership units Bristol County Savings Bank 2 ownership units Garfield Avenue – Phase Three Kennedy-Donovan Center, Inc. Bailey Park Road Development $249,576 grant and subsidy, Gilbertville, Massachusetts $250,000 advance Concord, New Hampshire FamilyFirst Bank 10 rental units Meredith Village Savings Bank South Middlesex Opportunity Council, Kennedy-Donovan Center 2012 Independent Living Concord Incorporated new Bedford Project I $595,562 grant and subsidy, $275,000 grant $698,625 advance New Bedford, Massachusetts 12 rental units 12 rental units BayCoast Bank Central MA Housing Independent Living Concord Kennedy-Donovan Center, Inc. $249,576 grant and subsidy, $250,000 advance 10 rental units Kennedy-Donovan Center 2012 new Bedford Project II

Results magazine volume V / number 2 17 Housing and Community Investment

Dover, New Hampshire Cumberland, Rhode Island Warwick, Rhode Island Centrix Bank & Trust Bank Rhode Island Coastway Community Bank The Housing Partnership Valley Affordable Housing Corporation House of Hope Community Development $559,097 grant and subsidy, $666,434 grant and subsidy, Corporation $840,000 advance $2,240,000 advance $400,000 grant 42 rental units 54 rental units 6 rental units Woodbury Mills Ashton Village 69 Fair Street

Franklin, New Hampshire East Greenwich, Rhode Island Burlington, Vermont Meredith Village Savings Bank BankNewport People’s United Bank Lakes Region Habitat for Humanity East Greenwich Housing Authority Burlington Housing Authority, $30,000 grant $577,715 grant and subsidy, Housing Vermont 1 ownership unit $960,448 advance $794,623 grant and subsidy, Habitat Handicap Accessible House – 10 rental units $3,825,000 advance Franklin, NH South County Trail 49 rental units Bobbin Mill Marlborough, New Hampshire Newport, Rhode Island People’s United Bank BankNewport Hancock, Vermont Southwestern Community Services, Inc. Housing Authority of the City of Newport National Bank of Middlebury $200,000 grant $426,387 grant and subsidy, Addison County Community Trust, Inc. 24 rental units $409,855 advance $218,929 grant and subsidy, Marlborough Homes 59 rental units $225,000 advance Park Holm New Construction 5 rental units Newport, New Hampshire Mountain View Apartments Lake Sunapee Bank, FSB Pawtucket, Rhode Island Housing Initiatives of New England Pawtucket Credit Union Manchester Center, Vermont $782,136 grant and subsidy, Pawtucket Citizens Development The Bank of Bennington $2,188,000 advance Corporation Bennington Area Habitat for Humanity 43 rental units $456,322 grant and subsidy, $90,000 grant Newport House $175,000 advance 3 ownership units 40 rental units Jennifer Lane Project Wolfeboro, New Hampshire Blackstone Valley Gateways II 2012 Meredith Village Savings Bank Rutland, Vermont Laconia Area Community Land Trust, Inc. Providence, Rhode Island Passumpsic Savings Bank $440,873 grant and subsidy, Bank Rhode Island Bardwell House Associates, $155,000 advance Omni Development Corporation the Housing Foundation, Inc. 24 rental units $355,296 grant $577,210 grant and subsidy, Harriman Hill Workforce Housing 55 rental units $500,000 advance Phoenix Renaissance 75 rental units Coventry, Rhode Island The Bardwell House Apartments Coventry Credit Union Richmond, Rhode Island Coventry Housing Associates Corporation Coastway Community Bank Vergennes, Vermont $400,000 grant Women’s Development Corporation/ National Bank of Middlebury 40 ownership units Women’s Opportunity Realty Corporation John Graham Shelter Pine Haven Acres $400,000 grant $182,143 grant and subsidy, 17 ownership units $115,000 advance Altamonte Ridge Condominiums 8 rental units Green Street Transitional Housing

18 Results magazine volume V / number 2 member matters

Two New Faces at the Bank Members Express Ana Dyer Satisfaction with Director of Sales and Business Development Bank Services Ana C. Dyer has joined the Federal Home Loan Bank of The Bank conducted an online survey of Boston’s Member Services team as first vice president/director our members in November to gauge the of sales and business development. level of satisfaction with our performance, Ms. Dyer will lead the Bank’s sales and business develop- staff, business solutions, and other attri- ment, Money Desk, and Mortgage Partnership Finance® butes associated with membership. teams. “I’m excited to be at the Bank and look forward to Overall, members indicated a very high working with our members to ensure that we are delivering level of satisfaction across a broad range the products and services that members want from the of products and services. Bank,” she says. “I hope to continue to find ways to further Ninety-seven percent of respondents enhance the great relationships that have been built among our team and our members.” were either very satisfied or satisfied with Ms. Dyer comes to the Bank from Webster Bank, N.A., where she served as senior vice the responsiveness and helpfulness of staff president, regional manager, business and professional banking. She previously held and with the Bank’s core mission of pro- senior positions at Bank of America, Bank of Boston, and Shawmut Bank, and gradu- viding a reliable and stable source of fund- ated cum laude from Harvard College with a Bachelors of Arts in economics. ing in all business cycles. Ms. Dyer resides in Mattapoisett, Massachusetts. She has two children, TJ, a third-year To encourage a strong response, mem- student at Northeastern University, and Celia, a second-year student at the University bers who completed the survey were en- of Virginia. tered into a random drawing to win an iPad2. Andrew Spinneit, chief financial Jason Hwang officer, RTN Federal Credit Union, was the Director of Financial Strategies winner. Congratulations! Jason Hwang has joined the Federal Home Loan Bank of Thank you to everyone who participated Boston’s Member Services team as vice president/director of in the member satisfaction survey. We ap- financial strategies, research, and membership applications. preciate your feedback and comments. n Mr. Hwang comes to the Bank from Cornerstone Research, where he managed consulting assignments involving com- plex data analysis for financial institutions and securities practices. Save the Date: April 19, 2013 Mr. Hwang plans to use his background in economic and financial research to develop attractive business solutions for 2013 Annual members. “We want to offer solutions — based on each institution’s unique circumstance Shareholders Meeting — to support them in the current and future rate environments,” Mr. Hwang says. “We are starting to see signs of stronger loan demand and a slow-down in the growth of Special keynote speaker will be deposits in our member communities. Our goal is to help members obtain the funding Andrew Zolli, mix that is best suited for their unique needs while mitigating liquidity and interest-rate co-author of risk.” Resilience: Why Mr. Hwang says it was the overall mission of the Bank that initially attracted him — Things Bounce “the fact that I can look around in my own community and see tangible results of the Back, a new book which Bank’s work in supporting community development and affordable housing.” explores how Mr. Hwang holds a Ph.D. in economics from Harvard University, where he focused his we can adapt academic research on economic development and growth. He earned master’s and and flourish in undergraduate degrees in economics from Queen’s University. ever-changing Mr. Hwang resides in Somerville, Massachusetts with his wife Jill, an attorney with environments. the Refugee and Immigration Services of Catholic Charities, and their two young sons, Boston Marriott Newton Collin and Owen. n Newton, Massachusetts

“Mortgage Partnership Finance” and “MPF” are registered trademarks of the Federal Home Loan Bank of Chicago.

Results magazine volume V / number 2 19 The Last word

FHLB Boston Around the Region

Victory Gardens Groundbreaking, October 10, 2012. The Victory Gardens initiative involves the rehabilitation of a former nurses' house and construction of seven townhouse-style buildings to create 74 units of rental housing and community space for veterans on the site of the Veterans Affairs Medical Center in Newington, Connecticut. Developed by the Women’s Institute for Housing and Economic Development, the initiative received an $800,000 grant and subsidy and a $3.3 million advance from the Bank’s Affordable Housing Program through member Webster Bank, N.A. The project is part of the federal initiative to end veteran homelessness. Fifty percent of the units will be set aside for formerly homeless veterans. Top: from the left, Nick Lundgren, director, Office of Housing and Community Development, Connecticut Department ofE conomic and Community Development; Stephen Woods, mayor, Town of Newington; Dara Kovel, chief housing officer, Connecticut Housing Finance Authority; State Representative Sandy Nafis; U.S. Senator Richard Blumenthal (D-CT); Loni Willey, executive director, Women’s Institute for Housing and Economic Development; Robin M. Gallagher, senior vice president, Webster Bank, N.A.; Dr. Laurie Harkness, director of Recovery Services and the Errera Center, VA-CT Health Care System; Tony Lyons, vice president acquisitions/Northeast region, National Equity Fund; State Senator Paul R. Doyle;. M. Susan Elliott, executive vice president/chief business officer, Federal Home Loan Bank of Boston; and Mollye Wolahan, deputy director, Women’s Institute for Housing and Economic Development. Middle left: from the left, M. Susan Elliott, executive vice president/chief business officer at the Federal Home Loan Bank of Boston; and Bob Annon, regional president, Webster Bank, N.A. Middle center: The former nurses’ house on the site. Middle right: from the left, Joanne Sullivan, vice president/director of gov- ernment and community relations, Federal Home Loan Bank of Boston; Shelley Magrino, assistant vice president, Webster Bank, N.A.; and Robin M. Gallagher, senior vice president, Webster Bank, N.A. Bottom left: Veterans attend- ing the Victory Gardens groundbreaking. Bottom right: M. Susan Elliott, executive vice president/ chief business officer, Federal Home Loan Bank of Boston, and Senator Richard Blumenthal.

20 Results magazine volume V / number 2 Results magazine volume V / number 2 21 Cert no. XXX-XXX-000

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