New Tools Expand Opportunities for Mortgage Lenders in State Housing Finance Agency Programs

WASHINGTON, DC — The National Council of State Housing Agencies (NCSHA) today announced the HFA1 Affordable Homeownership Lender Toolkit, a new online resource that enables lenders to partner more easily with state housing finance agencies (HFAs) in providing affordable home mortgage loans and down payment assistance to lower-income home buyers.

The tools identify the key features of HFA homeownership programs that are most important for lenders in determining how and where to partner with the agencies and reflect substantial progress by a growing number of agencies to align elements of their programs to support more efficient participation in them by regional and national lenders.

“As a longtime lending partner of state housing finance agencies around the country, Guild Mortgage sees significant potential to expand affordable mortgage financing opportunities for more lower-income borrowers through these tools,” said David Battany, executive vice president for Guild Mortgage and 2022 co-chair of the Mortgage Bankers Association’s Affordable Homeownership Advisory Council.

Programs from HFAs in the following states are featured in the toolkit: Alabama, Arizona, Idaho, California, Colorado, Illinois, Iowa, Massachusetts, New Mexico, South Dakota, Tennessee, Utah, and Washington. HFAs in other states are expected to join later this year.

Through a multi-year process with leading members of the Mortgage Bankers Association and other industry stakeholders, the agencies reduced or eliminated loan overlays, created a common loan delivery checklist to reduce operational differences, and aligned their affordable mortgage and down payment assistance requirements in numerous areas.

“These tools represent the most significant effort ever by state housing finance agencies to collectively assess opportunities to make their homeownership programs easier for mortgage lenders to participate in for the purpose of expanding affordable homeownership opportunities for lower-income Americans,” said Gerald Hunter, president of the Idaho Housing and Finance Association and co-chair of NCSHA’s Homeownership Task Force.

“State HFA homeownership programs are a proven vehicle for delivering affordable mortgage and down payment assistance to lower-income borrowers, including home buyers of color,” said Kristin Faust, executive director of the Illinois Housing Development Authority and co-chair of NCSHA’s Homeownership Task Force. “Now, more lenders will be able to participate in them more efficiently.”

“I commend the MBA members and state housing finance agencies that have worked hard for the past two years to establish greater efficiencies and new tools to expand affordable mortgages and down payment assistance to people and places that need it,” said MBA President and CEO Bob Broeksmit.

The HFA1 Affordable Homeownership Lender Toolkit complements recent efforts by Fannie Mae and Freddie Mac to encourage efficiencies and cost savings in mortgage offerings serving lower-income borrowers and actions by Lakeview Loan Servicing, LLC, and US Bank to augment HFA homeownership programs in a higher interest rate environment. Initial funding for the toolkit’s development was provided by Wells Fargo. Specialty Mortgage Product Solutions provided technical support.

“The HFA1 Affordable Homeownership Lender Toolkit reflects the recognition by leaders throughout the housing finance system of the essential role and established value proposition of state HFA homeownership programs,” said NCSHA Executive Director Stockton Williams. “We are grateful to all the HFAs and their partners that developed these resources.”

Other mortgage finance leaders commended the announcement:

• “NCSHA and state housing agencies play a critical role in making rent and homeownership more affordable for millions of people around the country,” said Otis Rolley, president of the Wells Fargo Foundation and head of Philanthropy and Community Impact. “These new tools will enable state agencies to work together more effectively and create more access to quality, affordable homes for historically marginalized communities.”
• “It’s remarkable that a group of 30+ mortgage industry stakeholders, many of them direct competitors, came together for a collaborative effort to find commonalities among HFA programs and to create efficiencies for maximum lender access. Lakeview is honored to have been a part of the process,“ said Lakeview Senior Vice President for Community Lending Jed Guenther.
• “US Bank was pleased to have participated in this effort so that we can help our state HFA clients work more efficiently with their regional and national lender partners,” said Jim Coreno, senior vice president at US Bank Home Mortgage. “Everyone who participated agreed that coming to an agreement of terms and restrictions was critical for the HFAs, lenders, and first-time home buyers across the country.”
• “The HFA1 Affordable Homeownership Lender Toolkit is a major step forward in the efforts of state housing finance agencies and their mortgage lending partners to align program criteria and product terms for the benefit of lower-income families and individuals. We believe it will strengthen opportunities for secondary mortgage market investment in affordable mortgage financing,” said PJ McCarthy, vice president of single-family affordable lending for Fannie Mae.
• “The HFA1 Affordable Homeownership Lender Toolkit complements Freddie Mac’s efforts to encourage commonalities in state HFA down payment assistance programs and encourage mortgage lenders to utilize HFA homeownership programs to reach underserved borrowers and communities,” said Mike Dawson, single-family vice president of mission and community engagement at Freddie Mac.

Learn more about the toolkit on NCSHA’s website.

About the National Council of State Housing Agencies

For more than 50 years, state housing finance agencies (HFAs) have played a central role in the nation’s affordable housing system, delivering financing to make possible the purchase, development, and rehabilitation of affordable homes and rental apartments for low- and middle-income households.

The National Council of State Housing Agencies (NCSHA) is a nonprofit, nonpartisan organization created to advance, through advocacy and education, the efforts of the nation’s state HFAs and their partners to provide affordable housing to those who need it. NCSHA’s vision: An affordably housed nation. Learn more at www.ncsha.org.