The U.S. Department of the Treasury, together with the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA), has announced the completion of all transactions under the recently introduced state and local Housing Finance Agency (HFA) Initiative.
Through more than 90 participating HFAs, the HFA Initiative will make affordable financing available to hundreds of thousands of new home buyers and existing homeowners, as well as support the development and rehabilitation of multifamily rental properties, the Obama administration says. Participating state and local agencies have already begun providing mortgages financed through the HFA Initiative.
‘The assistance provided under the HFA Initiative will help maintain the viability of state and local HFAs which play key roles in HUD's efforts to promote expanded access to affordable rental housing," says HUD Secretary Shaun Donovan.
In October 2009, the Treasury announced the two-part initiative, which includes a New Issue Bond Program (NIBP) and a Temporary Credit and Liquidity Program (TCLP).
The NIBP provided temporary financing for HFAs to issue new housing bonds. The Treasury purchased securities of Fannie Mae and Freddie Mac backed by these new housing bonds. The program may support up to several hundred thousand new mortgages to first-time home buyers this coming year, the administration says, as well as refinancing opportunities to put at-risk, but responsible and performing, borrowers into more sustainable mortgages. The NIBP will also support development of tens of thousands of new rental housing units for working families.
Fannie Mae and Freddie Mac are administering a TCLP for HFAs, which is designed to help relieve current financial strains and enable the HFAs to continue providing housing resources to working families. The Treasury has agreed to purchase a participation interest in the Temporary Credit and Liquidity Facilities (TCLFs) provided to HFAs under the program, providing a credit and liquidity backstop.
Over 90 state and local HFAs representing 49 states participated in the NIBP for an aggregate total new issuance of $15.3 billion. Twelve HFAs participated in the TCLP for an aggregate total usage of $8.2 billion. The administration says the HFA Initiative is expected to come at no cost to the taxpayers and to the government-sponsored enterprises.
"By creating $23 billion in much-needed, new housing capital for the housing finance system, this initiative will enable the HFAs to return to the level of market liquidity they have provided historically," says Fannie Mae President and CEO Michael J. Williams.
SOURCE: Treasury Department