NEW INITIATIVE SEEKS STABLE HOUSING MARKET

WASHINGTON (U.S. Department of Housing and Urban Development) – The Obama Administration yesterday announced a new initiative for state and local housing finance agencies (HFAs). It will help support low mortgage rates and expand resources for low- and middle-income borrowers to purchase or rent homes that are affordable over the long term.

The initiative has two parts: a new bond purchase program to support new lending by HFAs and a temporary credit and liquidity program to improve the access of HFAs to liquidity for outstanding HFA bonds.

The HFA Initiative will provide hundreds of thousands of affordable mortgages for working families and enable the development and rehabilitation of tens of thousands of affordable rental properties.

According to HUD, it will do this at little or no cost to taxpayers because it is paid for by the HFAs themselves and, as a temporary program, it incentivizes HFAs to transition back to market sources of capital as quickly as possible.

"Through this initiative, the administration aims to help HFAs jumpstart new lending to borrowers who might not otherwise be served and to better support the financing costs of their current programs — key components in stabilizing the housing market overall," said Treasury Secretary Tim Geithner.

HFAs will pay a fee to have access to both programs under the HFA Initiative. These fees have been designed to cover expected costs to the Treasury Department and the taxpayer.

More information is available on HUD's website.