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Bulletin No.: 2020-10
April 9, 2020

TO: MEMBERS

SUBJECT: Bank Announces COVID-19 Relief Program

In response to the COVID-19 pandemic, the Federal Home Loan Bank of Dallas (Bank) is making available special advance and grant programs under its COVID-19 Relief Program. The Bank is offering a COVID-19 Relief Advances program to support its members' liquidity needs in responding to the pandemic. The Bank is also moving up the second funding round for the Small Business Boost (SBB) program, through which $1.5 million in funds will be available to help small businesses. Another $2.3 million will be made available through the Partnership Grant Program (PGP) to help community-based organizations (CBOs) that are involved in affordable housing and/or stimulating small business development with expanded uses for pandemic relief efforts.

In addition to the advance and grant programs, the Bank will also make charitable contributions totaling up to $1 million to assist communities throughout the Bank's five-state District. These donations are as follows: $120,000 to the Irving Schools Foundation to provide meals to Irving children; $170,000 to the North Texas Food Bank; $55,000 to the Central Texas Food Bank; $55,000 to the East Texas Food Bank; $220,000 to southern Louisiana's Second Harvest Food Bank; $60,000 to Roadrunner Food Bank of New Mexico; $60,000 to the Mississippi Food Network; and $60,000 to the Arkansas Food Bank. Further, the Bank has allocated $200,000 for matching on a 2:1 basis, contributions by employees and members of the Bank's Board of Directors to nonprofits that are addressing the needs created by COVID-19.

COVID-19 Relief Advances

The Bank has established the COVID-19 Relief Advances program to support loans by members under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as well as members' customers who have been directly impacted by COVID-19. The advances programs provide economically beneficial terms to the Bank's members and housing associates. Funds are available on a first-come, first-served basis, subject to the applicable member caps. Funding under these programs will be available from April 13, 2020 until the funds are exhausted or June 30, 2020, whichever occurs first.

  • What advances are being offered?
    • $5 billion in Fixed-Rate, Fixed-Term advances with terms up to six months or less at 25 bps ($1.5 billion of which will be allocated for CFIs)
    • $3 billion in Fixed-Rate, Fixed-Term advances with terms greater than six months through five years at the Bank's cost
  • Which institutions are eligible for these advances?
    • All members of the Bank and housing associates
  •  How will the advances be allocated?
    • Advances will be made on a first-come, first-served basis and will be available until the earlier of: 1) the date on which the COVID-19 Relief Advances are fully utilized or 2) June 30, 2020. Institutions designated as large financial institutions (LFIs), as defined in the MPCP, will be limited to a maximum of $500 million per institution. This limit applies to only short-term advances (six months or less) at 0.25%
    • Members prepaying a long-term advance under this offering may be subject to a prepayment fee
  • What types of activities qualify for the COVID-19 Relief Advances?
    • Proceeds of these advances may be utilized for, but are not limited to:
      • Funding small business administration (SBA) loans as prescribed under the 2020 CARES Act
      • Funding other activities associated with the COVID-19 pandemic, which may include but are not limited to:
        • Servicing advances associated with payment deferrals
        • Supplementing other delays in payments associated with the ordinary course of business
        • Facilitating other activities to supplement cash flow disruption of members and their customers
      • For insurance companies, activities such as deferring premium payments for customers or taking other measures to enhance the cash flow of customers will qualify.
  • What paperwork is needed?
    • The COVID-19 Relief Advances Certification Form must be completed prior to accessing advances. The form can also be found on the SecureConnect home page.
  • Where can I find more information?
    • View the Fact Sheet and FAQs or contact Member Services at 844.FHL.BANK (844.345.2265). The Bank will be having a member webinar at 4:00 p.m. CT on Monday, April 13, 2020 to discuss the program. Click here to register.

Economic Development Program (EDP)

Members may also receive reduced rates using the Bank's EDP advances for all terms beyond the five-year Fixed-Rate, Fixed-Term advance offered under the COVID-19 Relief Advances program. EDP provides favorably priced advances to assist qualified members in funding economic development projects, small businesses, as well as community revitalization in targeted communities. Please see the EDP product sheet for more details and contact the Community Investment department with questions.

Small Business Boost (SBB)

The Bank is moving the second funding round for SBB from July to May 1, 2020. SBB is a recoverable assistance program that provides a secondary, unsecured loan that fills the gap between what the member can fund and the small business loan request. The Bank will make available through its members up to $1.5 million in SBB funding that can be used to support small businesses, including those impacted by COVID-19, in members' communities.

  • What are the key changes?
    • The SBB's second funding round for 2020 was moved from July to May 1, 2020. Under the program, $1.5 million will be made available until funds are exhausted or December 4, 2020, whichever occurs first. A member cap has been established at $225,000 for this round.
  • How does SBB work?
    • Enrolled members can register small businesses for recoverable assistance during open funding rounds. SBB funds are awarded on a first-come, first-served basis.
  • What can SBB loans be used for?
    • SBB funds can be used for the start up or expansion of a small business, including building purchase, land acquisition, construction and other related uses. Funds may also be used for permanent working capital to pay fixed costs, payroll, accounts payable and other bills that cannot be paid because of impacts from the COVID-19 pandemic.
  • How does a business qualify?
    • The borrower must qualify as a small business based on Small Business Administration guidelines and provide documentation evidencing the existence of the small business such as the Articles of Incorporation.
  • What are the member financing requirements?
    • The member must provide at least 40 percent of total financing to the small business. Extending or modifying existing member debt may be used to meet this requirement. The member is not required to advance additional loan funds to the small business.
  • Are there any job creation or retention requirements?
    • At least one full-time job must be created or retained for every $50,000 in SBB funding. Alternatively, other economic impact can be demonstrated, such as maintaining the ongoing viability of the business.
  • What paperwork is needed?
    • Members may request that applications for SBB funding be sent via DocuSign by submitting a request using the contact form at fhlb.com/sbb or by emailing SBB@fhlb.com. In addition to the application, members will be asked to supply a copy of their credit write-up for the transaction and the organizational documents for the small business.
  • Where can I find more information?
    • View the Fact Sheet and FAQs or contact Community Investment at 800.362.2944.

Partnership Grant Program (PGP)

The Bank is expanding the current PGP to provide $2.3 million in funds and a 5:1 match on member contributions to offer grants up to $30,000 to support community-based organization (CBOs) involved in supplying affordable housing, stimulating small business development or providing small business technical assistance. In addition, the maximum annual revenue of qualified organizations has been increased to $1 million. The CBOs must be located within the Bank's five-state District. Applications will be available from April 20, 2020 through May 8, 2020. All applications must be received no later than May 8, 2020.

  • Which institutions are eligible for grants?
    • Members and housing associates that are eligible for advances may apply for grant funds under this program on behalf of CBOs located in the Bank's five-state District.
  • What is the maximum PGP amount available per FHLB Dallas member/CBO?
    • The maximum Bank grant permitted is $30,000 per member grant to a CBO.
  • How can the funds be used?
    • Organizational capacity-building
    • Assistance with applying for grants and other funding sources
    • Research and studies
    • Contractual services
    • COVID-19 response, including:
      • Nonprofits providing emergency rental assistance
      • Emergency relief funds/social service providers related to housing
      • Homeless shelters
      • Job training
  • What are the criteria to be eligible?
    • CBO must be involved in affordable housing, stimulating small business development or providing small business technical assistance.
    • CBO must have 501(c)(3) IRS designation. For federally recognized tribes, the tribe must have a copy of the IRS determination letter indicating that their organization is a tribal government entity.
    • CBO must have an annual revenue of $1 million or less and be located in Arkansas, Louisiana, Mississippi, New Mexico or Texas.
    • Participating member institution's contribution must be a cash contribution.
  • Is there a grant limit per CBO?
    • The maximum Bank grant is $60,000 per CBO when multiple members support one CBO in 2020.
  • How will the funds be allocated?
    • A lottery system will be used to select the recipients.
  • What paperwork is needed?
    • A member must complete a written application to apply for a grant. The application and additional required documentation are available at fhlb.com/pgp.
  • Where can I find more information?
    • View the Fact Sheet and FAQs or contact Community Investment at 800.362.2944. The Bank will be having a member webinar at 10:30 a.m. CT on Thursday, April 16, 2020 to discuss the program. Click here to register.

In these challenging and unprecedented times, the Bank remains dedicated to meeting our members' needs. These programs were designed with you in mind. Please contact Member Services or Community Investment with questions.

 

Sincerely,

Sanjay K. Bhasin
President and Chief Executive Officer