The Connecticut Housing Finance Authority intends to sell $161 million in tax-exempt bonds in three series Wednesday to finance single-family mortgages.
Proceeds will finance mortgages for about 900 first-time homebuyers, said Norbert Deslauriers, CHFA's interim executive vice president. CHFA's mortgage programs target low- and moderate-income borrowers purchasing their first homes.
Two subseries totaling $115.8 million will be for fixed-rate mortgages. A third tranche of $45 million is for variable-rate mortgages.
Citi and RBC Capital Markets are the senior managers for the fixed rate and variable rate offerings, respectively.
"First-time buyers drive the housing market, so creating opportunities to bring them into the market is vital to strengthen the housing market," Deslauriers said.
The current below-market interest rates on CHFA mortgages for first-time homebuyers ranges from 3.25% to 3.625% .According to a survey released Thursday by the Federal Home Loan Mortgage Corp., known commonly as Freddie Mac, the average national interest rate is 4.09%.
Through June, Rocky Hill, Conn..-based CHFA has financed 1,150 mortgages totaling $194 million, up 22% over the same period in 2014. Since its founding in 1969, CHFA has financed more than 130,000 mortgages for first-time homebuyers.
In addition to single-family mortgages, CHFA uses bond proceeds to finance affordable multifamily rental housing developments. Standard & Poor's and Moody's Investors Service each assign triple-A ratings.
"The rating is based on the very high overcollateralization of assets to liabilities, very strong program cash flows, a high percentage of government-insured loans and support from the state through the housing mortgage capital reserve fund," Moody's said in its report.
Kutak Rock LLP, Hawkins Delafield & Wood LLP and Lewis & Munday PC are co-bond counsel. Tobin, Carberry, O'Malley, Riley & Selinger PC are representing the underwriters.
