Bulletin No.: 2020-17
July 1, 2020
SUBJECT: Economic Development Program Expanded to Support Funding for Paycheck Protection Program-Eligible Entities
As part of an ongoing commitment to meet the liquidity needs of our members and their communities during the COVID-19 pandemic, the Federal Home Loan Bank of Dallas (Bank) has temporarily expanded funding for Paycheck Protection Program (PPP)-eligible entities.
Beginning July 1, 2020, loans made by members to PPP-eligible customers regardless of whether the customer received PPP funds, are eligible for reduced advance pricing under the Bank's Economic Development Program (EDP).
The program's parameters are based on the underlying qualifications of the PPP. Unlike the PPP, which expires on June 30, 2020, the EDP advance funds for PPP-eligible entities will be available until December 31, 2020 or if authorization for the PPP is renewed, six months after the latest expiration of the PPP authority.
Favorably Priced Funding and Flexible Terms
The EDP provides fixed-rate, fixed-term amortizing and non-amortizing advances – typically priced below standard advance rates for comparable maturities – to assist qualified members in funding economic development projects, small businesses and community revitalization in targeted communities. EDP advances are available for terms of three months to three years.
- Member's borrower must be PPP eligible (an underlying PPP loan to the borrower is not required)
- All EDP advance commitments for loans to PPP-eligible entities must be funded within three months of the commitment and no later than December 31, 2020, or if authorization for the PPP is renewed, six months after the latest expiration of the PPP authority
A member limit for total community development advances (EDP, Community Investment Program and Disaster Relief Program advances) equal to the lesser of 15 percent of the member institution's total assets, or $200 million, applies.
How to Participate
Members interested in participating must complete an EDP advance application to participate. Members may submit a portfolio of loans to PPP-eligible entities to be funded under a single EDP advance. A copy of the original note(s) must be submitted to the Bank prior to funding. Members may view current EDP advance rates in SecureConnect. However, the advances must be booked through a Member Services representative. Please see the EDP product sheet for more details and contact Member Services at Member.Services@fhlb.com or 844.FHL.BANK (844.345.2265) with any questions you may have.
Sanjay K. Bhasin
President and Chief Executive Officer