other costs. The Finance Board's budget and expenditures, however, are included in the budget of the United States. The Act, as amended in 1989, requires each FHLBank to operate an Affordable Housing Program (AHP). Each FHLBank provides subsidies in the form of direct grants or below-market rate advances for members that use the funds for qualifying affordable housing projects. The FHLBank System sets aside for its AHPs the greater of $100 million annually or 10 percent of the preceding year's net income. The Act, as amended in 1999, also requires that the FHLBanks contribute 20 percent of net earnings annually to assist in the payment of interest on bonds issued by the Resolution Funding Corporation.

The forecast data for 2001 and 2002 contained in this material represents estimates and should not be construed as an official forecast of the FHLBanks System's future position.

Statement of Operations (in millions of dollars)

36,461

36,461

0102 Expense (excludes REFCORP)

payments to

26,932 30,579 32,801 35,023 26,932 30,579 32,801 35,023 633,966

636,188

638,410