Fannie Mae Offers Capital Fund Finance at Tax-Exempt Rates

摘要

Small and mid-sized housing authorities seeking to use public housing capital fund financing for housing improvements or new construction can find an alternative to a pooled bond issue in Fannie Mae's Modernization Express program, which provides loans of up to 20 years secured solely by future annual capital fund payments. The loans are priced daily based on tax-exempt rates, and rates in mid-November were about 4.60 percent for a 20-year loan and 4.25 percent for 10 years. Fannie Mae also offers a rate lock option for these fixed-rate loans. The Fannie Mae loans are underwritten to tax-exempt bond standards, which typically have resulted in double-A or double-A-minus ratings for bond financings. Fannie Mae holds the loans in its portfolio. The new loan product is part of Fannie Mae's goal of increasing investments to $1.5 billion for PHAs as part of its larger commitment toward its affordable housing goals.