A $100 rise in Federal Home Loan Bank advances relative to assets goes with a $22 rise in mortgage origination volume over assets. That is the headline figure from a new Urban Institute study, and it covers the whole period from 2002 to 2024.
The Council of Federal Home Loan Banks, which commissioned the work, publicized the findings on 14 January 2026. This is the second paper in a three-part Urban Institute series, and the Council says it is the first independent study to examine the direct link between advances and members’ lending. The researchers drew on quarterly Call Report data, Home Mortgage Disclosure Act records and Community Reinvestment Act data, and used several econometric approaches.
The numbers behind the claim
Over those two decades, the study found, increases in advances contributed to more than $1.8 trillion in additional total lending by bank and credit union members. About $850 billion of that went to residential real estate.
Smaller commercial and savings banks lifted their lending by even more than their larger peers. Advances were also positively associated with lending to small businesses, small farms, and low- and moderate-income households. The relationship grew stronger after the post-crisis regulatory reforms, a period when other funding sources were harder to come by and members leaned more on FHLBank money. The analysis also looked at behavior before and after the 2008 financial crisis.
Ryan Donovan, the Council’s president and CEO, said the takeaway is that “the FHLBanks turn liquidity into action”. He pointed to roughly 6,500 financial institutions that depend on the system and said advances matter most to small community lenders.
Who is behind it
Readers should note the funding. The Council describes itself as the public voice of the FHLBank System, and it paid for the research series to measure how advances shape the lending of bank and credit union members. The Urban Institute is a nonpartisan think tank based in Washington.
The system itself consists of 11 regional, member-owned cooperatives that supply lendable funds to community banks, credit unions, commercial and savings banks, insurance companies and community development financial institutions in all 50 states and the U.S. territories.
