Virginia Housing Development Authority

Transcription

1 Virginia Housing Development Authority CFED s Asset & Opportunity Institute Workshop September 23, 2009 Michele Watson, Director of Homeownership Programs

2 About VHDA The General Assembly established VHDA in 1972 as a self-supporting State Authority No state appropriations. Our capital is primarily raised from private investors through the sale of tax-exempt and taxable notes and bonds. Due to the recent difficulty in accessing capital, VHDA successfully acquired alternative home purchase capital via Ginnie Mae. 2

3 About VHDA, continued VHDA provides sound, sustainable, home purchase lending. Our Homeownership Programs focus primarily on first-time home buyers. We complement and support the activities of Virginia s housing industry. 3

4 Organizational Structure VHDA s Board is appointed by the Governor, subject to confirmation by the General Assembly, and is responsible for fiduciary and public purpose oversight VHDA operates two lines of business Homeownership and Multifamily Rental. Targeted housing People With Disabilities, Mixed Use/Mixed Income cuts across both areas. VHDA also administers the Housing Choice Voucher Program and the Low Income Housing Tax Credit Program. VHDA s staff consists of approximately 300 associates with Susan Dewey serving as Executive Director. 4

5 VHDA s key homeownership role is to assist first-time home buyers by creating affordable opportunities to purchase homes in partnership with the private sector. 5

6 Program Funding In the past, VHDA loan programs depended heavily on bond cap reallocations. VHDA s share of State Private Activity Bond Cap is 43%. Also, VHDA is able to receive unused bond cap from other issuing entities as well as issuance authority from the Governor s discretionary share of the cap. The IRS permits VHDA to recycle some of the prepayments on its tax-exempt bond loans into new mortgages. 6

7 Funding Challenges The serious disruption in the financial markets poses challenges to VHDA s ability to access capital at reasonable costs to maintain the viability of its lending programs. Currently, this is difficult due to the higher interest rates demanded by investors for debt (taxable and taxexempt) not effectively guaranteed by the U.S. government. 7

8 Alternative Home Purchase Capital In March, VHDA was approved to participate in Ginnie Mae s pass-through securities program. This will help sustain a high level of home purchase lending at a time when affordable credit for first-time buyers is critically needed. Ginnie Mae funding will enable the continuation of VHDA s FHA Plus program which is now the main source of down payment assistance in Virginia. 8

9 Sound, Sustainable Lending Practices VHDA offers only long-term, fixed-rate loans in contrast to the riskier adjustable-rate loans. VHDA quickly adapts its programs to alternative funding sources and rapidly changing market conditions. VHDA loans are made to creditworthy borrowers capable of repaying them based on verifiable income and credit reports. Homebuyer education is required for all potential VHDA borrowers. 9

10 Homeownership Purchase Programs VHDA is the leading provider of low down payment loans through the Rural Housing loan guarantee program. The FHA Plus program offers an FHA-insured first mortgage loan coupled with a VHDA second mortgage to cover down payment and closing costs. The Homebuyer Tax Credit plus program uses the First-time Homebuyer Tax Credit for a downpayment on a VHDA mortgage. SPARC (Sponsoring Partnerships and Revitalizing Communities) is below market rate first mortgage financing available through special allocations made to local housing organizations. 10

11 Strengthening Partnerships VHDA partners with the Governor s Foreclosure Prevention Task Force The REACH Team was created to address targeted housing markets and needs. VHDA established Advisory Boards to obtain feedback on programs, policies, and procedures. 11

12 In conclusion, VHDA is well positioned to weather current market conditions while continuing to address Virginia s diverse homeownership needs. 12