HUD announced last week that it will extend the multifamily risk-sharing initiative with the Federal Financing Bank for VHFA and other eligible U.S. housing finance agencies (HFAs). Created in 2015, this initiative has provided much-needed access for HFAs to the U.S. Treasury’s Federal Financing Bank.
In Vermont, this initiative has helped fund the development of 665 safe, affordable apartments for low income households in 6 communities: Colchester, Rutland, Bennington, Burlington, South Burlington and Bristol. Financing via this initiative is pending for another 230 apartments in Vermont.
Thanks to the extension, VHFA can continue to work with affordable rental housing developers to make greater use of this low, fixed-rate, long-term permanent financing. Due to the importance of this source of financing for affordable apartments, the National Council of State Housing Agencies advocated for its extension.
The initiative was originally scheduled to cease accepting new applications for commitments on September 30, 2018, but will now accept new applications for commitments through the end of the year.
The Federal Housing Agency (FHA) at HUD intends to review the program’s effectiveness, and whether market conditions justify its continued operation. According to HUD, the results of this review will determine whether and in what form FHA would continue the program beyond December 31, 2018. If the program is extended for a limited time period beyond 2018, HUD would identify the parameters under which it would be phased out.
Pictured: McAuley Square in Burlington, Vermont is home to 74 seniors and young families thanks to the HFA-HUD Federal Financing Bank risk share program.