There’s Still a Need for State HFAs

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With the low interest rate environment that still applies (for now), some people have questioned the need for housing finance agencies. Since HFAs traditionally use bond proceeds to buy down mortgage rates to benefit first-time and low- to moderate-income borrowers, and rates are so low, the question is, what’s the point?

This kind of thinking is totally bogus. For one, offering a 1% rate versus, say, a 3.5% fixed, is still a substantial discount. And second, what happens a few years from now, when rates make their inevitable rise? We’d have to invent the HFAs all over again.

A visit to New Mexico’s recent biennial housing summit sponsored by its state housing finance agency (though with the word “mortgage” in its moniker the New Mexico Mortgage Finance Agency technically is an MFA) shows the amazing energy and wonderful spirit that gathers around the kinds of affordable housing HFAs, and MFAs, are in business to provide.

You wouldn’t think that affordable housing, which necessarily has to hold down costs to be more affordable, would be the leader in green housing, which costs more. But the evidence from the New Mexico Housing Summit is that affordable housing developers are making it a priority, to the great benefit of the environment and the owners and renters who will benefit from reduced utility costs.

“Supportive” housing is a big concept in New Mexico as well. What does supportive housing do? It targets the homeless by both housing them and providing an array of supportive services onsite. It is tough lending, yet to find an example of one in Albuquerque would require only a modest walk from the convention site.

NMMFA excels in helping tribal housing communities with their urgent housing needs. Relations over the centuries between tribes and the states they are located in have been terrible. But the MFA, a state agency, has rolled up its sleeves to fund and put together deals like the one at the San Felipe pueblo which saw a ribbon cutting on its first 28 units just last month. MFA-tribal relations are a model of joint resources and ambitions.

Making houses bloom in the deserts, on the sides of mountains, in the wretched “colonias” that dot the state and Mexican border, and in the urban areas of what is growing into a moderate-sized city seems to be the work of miracle makers.

Actually, though, these developments are the result of creativity, passion and much hard work by a dedicated group of affordable housing providers, lenders and a committed state housing finance agency.