The affordable housing industry can breathe a little easier: The New Issue Bond Program (NIBP) is being extended through 2012, the Treasury Department recently announced.

Throughout 2011, there were rumblings that the program would be extended. Many housing finance agencies (HFAs) found themselves with a surplus of unused single-family NIBP money, and the multifamily industry had been pining to put those funds to work. The recent announcement allows HFAs to do just that.

“This will enable worthy affordable projects to be financed that may otherwise have stalled because of sourcing gaps," said Steven Fayne, managing director of Citi Community Capital. “We are delighted that the NIBP will be revitalized by the carryover of the unused single-family allocation to multifamily and the extension of the program to 2012.”

The program provided a huge shot in the arm for the industry, offering rates as low as 1.8 percent and breathing new life into the bond market. With those kinds of rates, NIBP allowed many deals in high-cost areas such as California and New York to pencil out over the last two years.

In announcing the extension, Treasury made some other changes to the program. For instance, the Treasury is establishing a new rate-setting system for NIBP bonds based on the weighted average life of the bonds being issued. There will also be an additional credit premium of 80 basis points (bps) on new NIBP bonds, and a 30-bp per-year redemption fee on NIBP funds redeemed after April 1, 2012.

  Since its creation in 2009, the program has helped HFAs finance more than 100,000 single-family homes and more than 24,000 rental homes, according to the Treasury. The program is now set to sunset Dec. 31, 2012.

For more info, including term sheets, visit http://www.ncsha.org/blog/treasury-announces-nibp-tclp-extensions.

NEW RULES PROPOSED FOR HOME

The Department of Housing and Urban Development (HUD) is proposing new rules for the embattled HOME program.

  • HUD’s proposal would:
  • Require state and local governments to adopt policies and procedures to improve their oversight of projects, develop a system for assessing the relative risk of projects, and more closely monitor their HOME-funded sub-recipients;
  • Require state and local governments to assess a developer’s capacity and the long-term viability of the project, before they commit HOME funds to a project; Require more frequent reporting by state and local “participating jurisdictions” to enable HUD to more closely track projects once they’re
  • under way; and
  • Set a higher “performance bar” by establishing specific timeframes for taking appropriate corrective actions against participating jurisdictions who fail to complete what they started.

“There’s more we can do to boost the program’s performance and accountability. Through these new steps, we want to expand HOME’s impact and ensure that every dollar is used smartly to help families afford their homes,” said HUD Secretary Shaun Donovan in a statement.