The Federal Home Loan Bank of Indianapolis has released its 2025 Affordable Housing Program awards, directing $34.1 million to housing developments across Indiana and Michigan. Detroit projects will receive more than $4.6 million, positioning the city among the largest beneficiaries in this year’s round as local developers continue to navigate rising construction costs, aging housing stock, and limited affordable units.
The program has operated for more than three decades and remains one of the few federal tools that consistently fills financing gaps for nonprofit developers and community-based housing organizations. Since 1990, FHLBank Indianapolis has issued annual Affordable Housing Program grants to help cover acquisition, construction, or rehabilitation costs for projects serving households at very low-, low-, and moderate-income levels. The funding is awarded through a single competitive application cycle each year, with grants capped at $1 million per project.
The Bank recorded one of its largest rounds to date. Last year’s record funding totaled $34.6 million. This year’s $34.1 million awards support 43 projects and are expected to create or rehabilitate 1,578 affordable units across the region. Only three of the awarded projects support homeownership, underscoring the continued financial pressure on for-sale development as interest rates and insurance costs have climbed.
Detroit’s allocation arrives as the city continues to confront persistent gaps in affordable housing. According to the city’s 2024 housing needs assessment, Detroit requires thousands more deeply affordable units for residents earning below 50 percent of the area median income. Much of the city’s existing rental stock was built before 1960, and the cost of rehabilitation often outpaces what low-income renters can afford without subsidy. Developers have increasingly leaned on layered financing — including Low-Income Housing Tax Credits, local gap funding, and federal competitive grants — to move projects to completion.
FHLBank Indianapolis describes its role as providing a stable source of funding for community development partners. In its announcement, President and CEO Brendan McGrath said the Bank’s commitment remains tied to navigating the challenges shaping regional housing markets.
“In order to help navigate challenges facing the housing industry, in 2025 our Affordable Housing Program will help fund the creation or rehabilitation of an additional 1,578 units of affordable housing,” McGrath said.
For Detroit, the more than $4.6 million allocation supports ongoing efforts to stabilize neighborhoods through new construction and the preservation of existing rental housing. Developers working in the city’s affordable housing space, including nonprofit community development corporations, frequently rely on AHP grants to close financing gaps that otherwise delay or stall projects.
Housing advocates note that Detroit’s supply challenges remain acute. Limited federal funding, long construction timelines, and competition for tax credits have slowed the pace of new development. Programs like the AHP serve as a critical bridge — particularly for rehabilitation projects in long-disinvested neighborhoods where rents cannot support the full cost of construction.
This year’s awards continue the trend of steady investment. Over the past decade, FHLBank Indianapolis has increased both its annual allocation and the number of projects funded, reflecting growing demand across the region.
The 2025 round keeps the Bank near its highest level of annual support, trailing the 2024 record by less than half a million dollars.
Detroit’s share will help advance multiple projects already in the development pipeline. As construction costs remain high and financing environments tight, the ability for local developers to tap into competitive federal dollars is expected to influence which projects break ground over the next year.
For now, Detroit’s allocation signals continued federal support for the city’s efforts to expand and preserve affordable housing at a time when stability remains out of reach for many residents.
