BEDFORD, N.H. – December 28, 2009 – (RealEstateRama) — New Hampshire Housing Finance Authority has elected to participate in the U.S. Treasury’s New Issue Bond Program (NIBP). Announced in October 2009, the initiative is intended to provide housing finance agencies (HFAs) throughout the United States with the necessary support to allow these agencies to continue their work and provide very low-interest mortgage funds to strengthen the nation’s housing markets.
New Hampshire Housing recently sold bonds to Fannie Mae and Freddie Mac through the New Issue Bond Program to finance the development of eligible multi-family projects and mortgages for first-time home buyers. The bonds will be securitized by Fannie and Freddie and then sold to the United States Treasury. When combined with the proceeds of bonds sold publicly to other investors, the Treasury program will provide New Hampshire Housing with up to $300 million in funds during 2010. This amount will support up to 2,000 mortgages for first-time home buyers and up to 200 units of multi-family rental housing.
The majority of funds obtained under NIBP will be used to finance loans through New Hampshire Housing’s Single Family Mortgage Program. This program provides low-interest fixed-rate mortgage funds to assist eligible first-time home buyers. The Treasury program allows New Hampshire Housing to provide the lowest rates in the mortgage program’s 30 year history. As of December 28 rates are at 4.375% with 1 point and 4.625% with 0 points. Although the interest rates may change over time, the NIBP is expected to permit New Hampshire Housing to offer historically low rates throughout 2010. These low interest rates, combined with down payment and closing cost assistance through New Hampshire Housing as well as the $8,000 federal home buyer tax credit, will make it possible for many first-time buyers to realize their dreams of home ownership.
The New Issue Bond Program is part of the federal government’s Homeowner Affordability and Stability Plan, announced on Feb. 18, 2009, that was designed to improve the housing market and help responsible home owners restructure their mortgages to avoid foreclosure. The initiative is expected to provide vital financial backing to HFAs that are instrumental in helping first-time buyers overcome barriers to ownership, providing much needed assistance to home owners struggling with their mortgages and creating affordable housing opportunities within their states.
The NIBP will help HFAs across the country transition back into their normal role after experiencing severe disruptions in program activity due to the adverse effect of the financial crisis on the housing bond and tax credit markets. Each state HFA had the opportunity to choose to participate in the New Issue Bond Program and resource allocations followed a formula established by the Housing and Economic Recovery Act (HERA) of 2008. HFAs pay fees to access the program to cover costs to the Treasury Department and taxpayers. This program will expire at the end of 2010.
New Hampshire Housing Finance Authority is a tax exempt, public benefit corporation established by the state legislature. The Authority operates a number of programs designed to assist low- and moderate-income persons to obtain housing. Since its inception, New Hampshire Housing has helped more than 37,000 families purchase their own homes and has been instrumental in financing the creation of more than 14,000 multi-family housing units. More information about its programs can be found on the agency’s Web site at www.nhhfa.org.