New York, NY – December 18, 2009 – (RealEstateRama) — Governor David A. Paterson today announced that New York State has approved the sale of $665.2 million in housing bonds to the federal government that will lower the cost of borrowing for first-time homebuyers and developers of affordable multifamily rental apartments. The bond sale will be conducted under the Obama Administration’s New Issue Bond Purchase (NIBP) Program. The program was created to provide below market financing to State housing finance agencies across the country.
“This new bond program enables the State of New York Mortgage Agency to offer lower interest rates on its mortgages to encourage homeownership throughout New York,” Governor Paterson said. “Additionally, this program permits the State Housing Finance Agency to offer lower rate mortgages to developers to promote more construction and renovation of affordable rental housing — a crucial need for so many low- and moderate-income New Yorkers. I thank President Obama for making this program available to promote affordable housing in New York’s communities while stimulating our economy.”In November, the United States Department of Treasury agreed to purchase $665.2 in bonds from the New York State Housing Finance Agency (HFA) and the State of New York Mortgage Agency (SONYMA). Under the Treasury’s authorization, $389 million of the bonds will be sold by SONYMA for single-family mortgages and $276 million of the bonds will be sold by HFA for multifamily rental mortgages.
The NIBP Program was authorized by the Housing and Economic Recovery Act of 2008 (HERA). It enables HFA and SONYMA to sell bonds to Fannie Mae and Freddie Mac at below market rates. The funds raised through these bond sales will be placed in escrow and used by the agencies through 2010 and into 2011 to provide low-rate single-family and multifamily mortgages.
Earlier this week, Governor Paterson announced that on January 1, 2010, SONYMA will begin offering cash advances of up to $8,000 on the Federal homebuyer tax credit for borrowers using a SONYMA mortgage to purchase a home. Homebuyers may use the Tax Credit Advance Loan toward their down payment or closing costs. The advance can be repaid without interest when homeowners receive their Federal homebuyer tax credit after filing their annual tax return.
The following statements were provided in support of the State’s participation in the NIBP Program:
Senator Charles E. Schumer said: “This plan to offer lower interest rates on mortgages to enable homeownership across the State is just what we need during these challenging economic times. These funds will go a long way in stimulating the economy and creating jobs by facilitating the creation of affordable rental properties, as well as helping homeowners purchase their first home.”
Senator Kirsten Gillibrand said: “This is a great investment for New York. These investments will help continue stabilizing our housing market, rebuilding our economy and help more New York families afford a good home. I will continue working with Governor Paterson, Senator Schumer and our entire Congressional Delegation to make sure New York gets its fair share from the federal government.”
Congressman Eliot Engel said: “This program will not only help New Yorkers achieve homeownership, it will help to revitalize our economy. Governor Paterson is to be congratulated for taking part in this program which will help his constituents buy their homes, and help the state to come back from the worst recession in our lifetime.”
Congresswoman Carolyn McCarthy said: “I applaud Governor Paterson for the $665 million sale in housing bonds to the federal government. This will provide an opportunity for more individuals and families to own homes. On Long Island we have a high cost of living and this will help to assist low and moderate income people are able to live on Long Island.”
Congressman Gregory Meeks said: “I commend Governor Paterson and President Obama for providing this vital assistance for affordable housing in New York. Particularly in this economic environment, it is encouraging to see such innovative proposals at the local and federal levels to ensure that there is adequate housing available for millions of New Yorkers.”
Congresswoman Louise Slaughter said: “I’m pleased to see that New York is helping to provide affordable mortgages for working families giving them much-needed access to low-interest rate loans. Across the state, housing finance agencies have already helped over 3 million working families obtain financing for new homes bringing them one step closer to the American dream. We need to do what we can to help that trend continue.”
Congressman Paul Tonko said: “This program will help working families and the middle class in these difficult economic times by giving them access to affordable rental housing and homeownership. This program is more evidence that the Obama Administration, Congress and Governor Paterson are committed to providing affordable housing, stabilizing the real estate market — which is at the epicenter of the current recession, and getting our economy back on track.”
Congressman Ed Towns said: “I applaud Governor Paterson’s efforts to provide more affordable housing opportunities for New Yorkers during these difficult economic times. With this new bond program, New York State residents seeking homeownership can take advantage of reduced interest rates on mortgages, and developers can begin construction at lower costs. This win-win program for New York businesses and residents creates a clear and promising path toward economic recovery.”