Document

Report
NCSHA Conference
Multifamily Financing Techniques
Jim Carey - FHA
October 20, 2014
FHA Risk Share Program Update
• 33 Housing Finance Agencies in the program
• $5.5B financed over the life of program in 762
developments
• Approximately 71% financed under Level I
• MassHousing program leader with a risk share
portfolio of over $2.2 B
• Risk Share Performance compares favorably
with FHA MAP Programs
I 2 I
FHA Risk Share Performance Compares
Favorably with Basic FHA Program Modestly Lower FY10-12 and match in FY 13
Fiscal
Year
Active Loans
Beginning of Year
Count
2010
2011
2012
2013
9,586
9,966
10,221
10,556
2010
2011
2012
2013
920
962
1012
1038
UPB
(millions)
Claims
Counts
Count
Rate
Average
(millions)
All Multifamily Programs
$38,506
51
0.53 %
$493
$45,489
23
0.23 %
$159
$51,498
19
0.19 %
$189
$60,113
11
0.10%
$94
Section 542(c) HFA Risk Share Program
1.28 %
0.35 %
0.37 %
0.16%
$10
$7
$10
9
$4,660
$4,979
$5,249
$5,410
1.53%
0.02%
0.00%
0.01%
$24
$1
$0
$1
3
1
0
1
Rate
Dollars
0.33%
0.10%
0.00%
0.10%
I 3 I
Total
(millions)
$71
$1
$0.00
$0.55
Trends in the FHA/HFA Risk Share
Program
• Due to the financing collapse in 2008 HFA tax
exempt rates and Ginnie Mae rates inverted.
• Risk Share business volume dropped precipitously
• Risk Share business volume recovered briefly with
the New Issue Bond Program
• Business volume continues its decline in 2014
• In the same period FHA MAP Lending LIHTC
volume has increased dramatically
I 4 I
HFA Tax Exempt Rates vs. Ginnie Mae Security
Rates
In late 2008 multifamily tax exempt rates and Ginnie
Mae multifamily security rates inverted with HFA tax
exempt rates higher than comparable Ginnies. The
greatest disparity was in late 2012 when HFA rates
were 130bps above Ginnies. In December 2013 a
typical multifamily Ginnie Security was 76bps below a
typical multifamily tax exempt bond offering.
I 5 I
Tax Exempt vs. Ginnie Mae Security Rates
6.50
6.00
5.50
5.00
4.18
4.50
MF tax exempt rates /
Indicative Aa 30-year
multifamily housing rates
4.00
3.50
3.71
3.00
2.50
I 6 I
7/1/2014
3/1/2014
11/1/2013
7/1/2013
3/1/2013
11/1/2012
7/1/2012
3/1/2012
11/1/2011
7/1/2011
3/1/2011
11/1/2010
7/1/2010
3/1/2010
11/1/2009
7/1/2009
3/1/2009
11/1/2008
7/1/2008
3/1/2008
11/1/2007
7/1/2007
2.00
GNMA Multifamily
Securities Rate
HFA Risk Share Initial Endorsements FY 2007
to FY 2014
HFA Risk Share Initial Endorsements
(Volume in $MM)
(FY14 Annualized)
500
450
400
350
300
250
200
150
100
50
0
FY07
FY08
FY09
FY10
I 7 I
FY11
FY12
FY13
FY14
FHA Apartment Loan Firm Commitments 2010-2014
Overall mortgage volume, LIHTC volume and % of LIHTC
18%
All mortgages
17%
$16,000.0
LIHTC mortgages
16%
$14,000.0
Percentage of LIHTC
14%
$12,000.0
12%
$10,000.0
$10,735.5
$8,000.0
10%
8%
7%
$6,000.0
$4,000.0
6%
4%
5%
4%
4%
$1,835.4
$2,000.0
2%
$-
0%
2010
2011
2012
Fiscal Year of Commitment
I 8 I
2013
2014
% of LIHTC
Volume ($ MM)
$18,000.0
Drivers in Growth In FHA LIHTC
Volume
• Increased compatibility of MAP Underwriting
with LIHTC syndication pay-ins and other LIHTC
program elements
• Faster Hub turn times on LIHTC applications –
turn times reduced from 101 days in FY 11 to 55
days in FY 14 while volume quadrupled.
• Growth of FHA LIHTC Pilot in the 223(f) Program Closed 27 projects with 20 different lenders
participating.
• Favorable pricing associated with Ginnie Mae
Execution
I 9 I
Future Initiatives
• Federal Financing Bank Execution for Level I HFAs
• Possible Legislative Change to allow a Ginnie Mae
Execution in the Risk Share Program
• Revisions to Existing 20 year old HFA Risk Share
regulation
– Provide increased flexibility for Level I Participants
– Better align Level II underwriting with FHA programs
• Consideration of regulatory waivers such as the Cal
HFA non-fully amortizing loan
• Small Buildings Risk Share Initiative
I 10 I

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