Incentives to provide affordable mortgages for working families

The initiative announced on October 19, is expected to support low mortgage rates and expand resources for low and middle income borrowers to purchase or rent homes. This initiative was first outlined in February under the Homeowner Affordability and Stability Plan.

Affordable Mortgages for working families

The plan is to provide hundreds of thousands of affordable mortgages for working families and enable the development and rehabilitation of tens of thousands of affordable rental properties.

Treasury Secretary Tim Geithner said,  “Through this initiative, the Administration aims to help HFAs jump start new lending to borrowers who might not otherwise be served.”

The initiative has two parts.

Financing for Housing Finance Agencies to issue new mortgages

One part is a bond program that will provide financing for HFAs to issue new mortgage revenue bonds. This program has the capacity to support several hundred thousand new mortgages to first time home buyers this coming year. It also has the capacity to help at-risk borrowers refinance into more sustainable mortgages.

The second part of the program is expected to provide replacement credit to HFAs which will help reduce the costs of HFAs existing financing.

California Housing Finance Agency

"This plan will help revive CalHFA lending programs and give California first time home buyers a chance to take advantage of the highest affordability levels that have been seen in almost two decades," said Steve Spears, Acting Executive Director of California Housing Finance Agency.

Ohio Housing Finance Agency

"The Administration's Plan will restore the economic advantage of tax-exempt financing, which will be passed on to our first time home buyers. We will have the ability to help more borrowers and impact the lives of thousands of Ohio families," said Doug Garver, Executive Director of Ohio Housing Finance Agency.