Providence, RI – January 25, 2010 – (RealEstateRama) — As Rhode Island and the rest of the nation continue to battle a troubled economy, the federal government is recognizing the important role that Rhode Island Housing and other Housing Finance Agencies (HFAs) throughout the nation are playing in the nation’s recovery efforts.
The U.S. Department of the Treasury announced the purchase of $13.9 billion in housing bonds from 50 of its HFA members under the Obama Administration’s HFA Initiative, which was unveiled in October.
To get the bond proceeds, state HFAs are required to sell a total of $7.7 billion in retail housing bonds to private investors. The end result will allow eligible HFAs to finance more than 200,000 affordable homes across the country, while generating jobs and tax revenue for the economy, providing first-time homebuyer mortgages and financing safe rental housing.
“Rhode Island Housing has already begun to issue the required percentage of retail bonds to private investors, making us one of the first HFAs in the nation to qualify for the federal money,” says Richard Godfrey, Executive Director of Rhode Island Housing. “These much-needed funds will help breathe new life into our job market and housing market while continuing to keep our mortgage rates low for the whole year.”
By leveraging the Treasury purchase program, Rhode Island Housing will be able to raise a total of $306 million to help provide almost 1,000 low-interest, locally serviced mortgages for first-time homebuyers. The funds will also help Rhode Island Housing finance over 1,800 new and refurbished, safe rental homes, which will remain affordable for tenants for years.
“One in 10 jobs in Rhode Island are related to construction or real estate. So it is even more critical here that we invest in those industries. At the same time, Rhode Islanders are in need of homes that they can afford to keep, which are also safe and healthy,” adds Godfrey. “By investing in good homes that are affordable for the long term, and providing low-interest, safe loans, we help Rhode Islanders and stimulate the economy at the same time.”
The Initiative, part of the Administration’s Making Home Affordable program, was developed through an unprecedented collaboration among the White House, Treasury, the Department of Housing and Urban Development, and the Federal Housing Finance Agency, in consultation with HFAs and housing Government Sponsored Enterprises Fannie Mae and Freddie Mac. In other states it has provided HFAs $8.2 billion in liquidity to support outstanding bond issues, strengthening their financial footing and freeing more of their resources for housing investment.
“This economy has meant fewer resources are available to help more people, therefore our belts continue to tighten and the need is greater than ever before. It is encouraging that this initiative will help us keep our rates low throughout all of 2010, and that is a major triumph for Rhode Island,” says Godfrey. “Because we are an HFA, we can also offer extra assistance like 100 percent financing, down payment assistance and local servicing. Coupled with this new ability to retain low rates throughout the year, this is definitely great news for Rhode Islanders about to look for a home.”
For more information on Rhode Island Housing, visit www.rhodeislandhousing.org or call 401 457-1234.
