Housing finance agencies have played a critical role in financing affordable housing for more than 20 years. As we emerge from the worst housing crisis in our history, HFAs are as strong as ever and have shown their resiliency and adaptability during this time. It is this same resiliency and flexibility that will carry through as the role of HFAs continues to evolve.
HFAs have always played a role in providing access to low-cost mortgage financing to help families buy their first homes, as well as working with developers of affordable rental housing to allocate tax credits and mortgage financing. According to the National Council of State Housing Agencies, HFAs have helped provide mortgages to more than 2.6 million first-time homebuyers and have financed more than 2.9 million low and moderate-income apartments. The HFAsí local presence and contacts have uniquely positioned them as the knowledge experts for the markets they serve, providing a basis for assessing needs and risks.
An additional role brought to light by the housing crisis was the need to prevent foreclosure and administer the Hardest Hit Fund. This evolution required innovation and speed, two skills the HFAs readily deployed toward the goal maintaining affordable housing.
The role of HFAs continues to evolve and important work remains in order to maintain the quality of affordable housing and to address the shortfall in housing units. The goals of HFAs remain the same: provide access to long-term, fixed rate mortgages and affordable housing to the growing renter population, however, the way those goals are achieved may change. With less access to government funding and the likelihood that tax-exemptions will be scaled back, new business models will need to evolve.
Many HFAs will choose to build an infrastructure to support the seller/servicer model, while others will need to look to outsourcing. The demands are high in the new environment, which significantly drives up costs, and outsourcing is a viable strategy to reduce costs and enable HFAs to focus on the business of affordable housing, maintaining quality and addressing the shortfalls in housing units.
In an outsourced model, multiple HFAs can gain access to a shared infrastructure, spreading the cost among many agencies. HFAs are not competing for the same business so they can collaborate toward the common good. Outsourcing, whether it is technology people, or processes, provides access to a platform supported by the best practices of all the entities participating, creating the added-value of an overall higher quality solution. In a shared environment, state-of-the-art technology becomes a much more affordable option when compared to the cost of operating as a standalone entity.
Regardless of the route each HFA chooses as they continue to evolve, one thing remains certain: HFAs will continue to play a vital role in this nationís affordable housing initiatives and their resiliency, flexibility and collaboration will define their continued success.