COLUMBUS, Ohio — The financial meltdown has come down hard on the nation’s housing-finance agencies, which provide tens of thousands of mortgages to first-time poor and moderate-income homebuyers.
West Virginia has stopped going to market with bond sales, as has Illinois’ housing-development authority. Ohio canceled a long-planned $150 million bond sale.
Wisconsin suspended its entire loan program.
California temporarily suspended two of its long- term loan programs and removed two other down-payment-assistance programs.
“The banks are getting all this money, and we don’t have access to anything,” said Ken Giebel, spokesman for the California Housing Finance Agency. “The people who were part of the problem, which we weren’t, are getting support, and . . . we can’t do our programs.”
At issue is the ability of the housing agencies to borrow the money they need to process mortgages by selling bonds at affordable interest rates.
As the financial crisis exploded, it was virtually impossible to sell bonds at all, especially those associated with mortgages. As the markets have opened up, some sales are possible but at higher interest rates, which mean higher costs to taxpayers.
“Now, many of those borrowers don’t have capital to purchase those homes,” said Rachel Basye, spokeswoman for the Colorado Housing Finance Authority, where one in three of the agency’s loans this year went to homeowners purchasing foreclosures.
