As part of its comprehensive plan to stabilize the U.S. housing market, the Obama Administrative announced a new initiative for state and local housing finance agencies (HFAs) that will help support low mortgage rates and expand resources to develop affordable rental properties.
The key parts of the initiative, developed by the Department of the Treasury, HUD, the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac, are:
HFAs will have to pay fees—which cover costs to the Treasury and taxpayers—so they can access both programs. The fee for the TCLP will increase over time to encourage HFAs to find private alternatives as quickly as possible.
To date, state and local officials are applauding the initiative. “The current lack of liquidity in Florida jeopardizes the financial integrity of that state’s housing Guarantee Fund, putting at risk 94 multifamily rental developments with 24,000 affordable units that have $740 million of bonds outstanding,” said Steve Auger of the Florida Housing Finance Corporation. “Over the last 19 months, the lack of liquidity has cost the FHFC Guarantee Fund $16 million in increased bond interest expense. The Administration’s plan will provide significant help by offering a lower cost alternative.”