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Every state in the U.S., as well as in Puerto Rico and the U.S. Virgin Islands, has a Housing Finance Agency (HFA) that provides low- and moderate-income individuals and families with the opportunity to find a home or apartment that meets their budget and quality-of-life needs.
According to Stockton Williams, executive director of the National Council of State Housing Agencies (NCSHA), in 2017 alone, state HFAs provided $28 billion to finance affordable homeownership for more than 152,000 households, 26 percent of which were minority-headed households.
The NCSHA was created by the state agencies more than 40 years ago, Williams said, to help share best practices. “HFAs are constantly learning from each other,” Williams adds, “not only sharing best practices, but solving emerging challenges on a collaborative basis. NCSHA facilitates these exchanges and augments them with additional analysis and support.”
Some of the state HFA practices that NCSHA helps to promote are careful underwriting of borrowers, close oversight of lenders, proactive loan servicing and counseling assistance to borrowers who need it, Williams noted.
“A 2018 study,” according to Williams, “found that state HFA loans were much less likely to experience defaults or foreclosures than loans from other sources to similar borrowers.
“According to the study,” he continued, “not only are HFAs more likely to require full documentation and careful underwriting, they also serve as a third-party monitor on lenders originating loans through a state program, creating an additional incentive for careful screening by the lender.”
Like other state housing finance agencies, the North Carolina HFA (NCFHA), which began operating in 1973, serves the broad mandate of providing affordable housing opportunities for state residents whose needs are not being met by the market, explains Connie Helmlinger, manager of public relations and marketing for the NCHFA.
The work of her agency, Helmlinger notes, is divided into two main areas: providing assistance with home ownership and with rental housing.
“We have helped more than 115,000 individuals and families purchase homes,” she said. “We do that by offering mortgages with competitive rates and down payment assistance for buyers.”
The NCHFA offers a variety of assistance programs that seek to help low- and moderate-income homebuyers in such categories as first-time buyers, military veterans, senior citizens and people with disabilities. Detailed information about such programs as NC Home Advantage Mortgage, NC Home Advantage Tax Credit and NC IST Home Advantage, and how potential buyers can qualify for them, can be found at www.ncfha.com
Most of NCFHA’s work is done in association with partners, including local governments, nonprofit organizations and private developers. “One of our self-help programs,” Helmlinger says, “is working with Habitat for Humanity. They take the money we provide and roll that into their own money to provide better mortgages for people who buy their homes.”
Helmlinger notes that the NCHFA does not work directly with buyers — except for being involved in final approvals and underwriting — but works directly with lenders after buyers have contacted a loan officer about applying for one of their assistance programs.
“The money is coming from us,” says Helmlinger, “but it’s the lender that is managing the whole process.”