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HOUSING FINANCE COMMISSION’S
HOUSING FINANCE PLAN
WASHINGTON STATE HOUSING FINANCE COMMISSION
1000 SECOND AVENUE, SUITE 2700, SEATTLE, WASHINGTON 98104-1046
(206) 464-7139 (SEATTLE)
1-800 767-4663 (WITHIN WASHINGTON STATE)
WE ARE A PUBLICLY ACCOUNTABLE, SELF-SUPPORTING TEAM
DEDICATED TO INCREASING HOUSING ACCESS AND AFFORDABILITY
AND TO EXPANDING THE AVAILABILITY OF QUALITY COMMUNITY
SERVICES FOR THE PEOPLE OF WASHINGTON.
OUR OPERATING VISION
WE ARE A CATALYST TO JOIN RESOURCES AND PARTNERSHIPS
CREATING GREATER ACCESS TO HOUSING AND COMMUNITY
SERVICES. EVERY COMMISSION CONTACT IS POSITIVE ANDINFORMATIVE.
OUR SHARED VALUES
• TEAMWORK •
• EVERY EMPLOYEE’S CONTRIBUTION •
• A TRUSTING, RESPECTFUL DIALOGUE WITH ONE ANOTHER •
• A SAFE ENVIRONMENT TO EXPRESS OPINIONS •
• PERSONAL RESPONSIBILITY •
• FLEXIBLE AND INNOVATIVE LEADERSHIP •
• WILLINGNESS TO ACCEPT CONSTRUCTIVE FEEDBACK AND CHANGE •
• SHARING INFORMATION •
• A HELPFUL ATTITUDE TOWARD CLIENTS •
TABLE OF CONTENTSINTRODUCTION
OVERVIEW OF THE HOUSING FINANCE COMMISSION
POTENTIAL RESOURCES AVAILABLE TO THE COMMISSION IN2016 AND 2017:
UNIFIED VOLUME CAP AUTHORITY FOR TAX-EXEMPT BONDS
THE IMPACT OF STATE LEGISLATION
THE IMPACT OF FEDERAL LEGISLATION
CURRENT STATE LAW FOR THE ALLOCATION OF BOND CAP
ALLOCATING PRIVATE ACTIVITY BOND CAP BETWEEN PROGRAMS................ 10 ACTING AS THE STATE’S BOND BANK
PRESERVATION OF PREVIOUSLY ISSUED BOND CAP UNDER THE “TEN-YEARRULE”
BOND CAP AVAILABLE DURING THE PLAN
LOW INCOME HOUSING TAX CREDIT
FARMER / RANCHER BONDS
PUBLIC PURPOSE BONDS
PROGRAM INVESTMENT FUND
SUMMARY OF PROGRAM INVESTMENT FUND INVESTMENTS
RAPID RESPONSE PROGRAM
HOUSING COUNSELING GRANTS
PROPOSED USES OF AVAILABLE RESOURCES:
USE OF SINGLE-FAMILY AUTHORITY
USE OF MULTIFAMILY AUTHORITY
USE OF TAX CREDIT AUTHORITY
USE OF FARMER / RANCHER BONDS
USE OF ENERGY BONDS
POTENTIAL REFUNDING AUTHORITY
TAXABLE BOND AUTHORITY
501(C)3 BOND AUTHORITY
GENERAL RESERVES AND THE PROGRAM INVESTMENT FUND
APPENDIX A: GENERAL POLICIES OF THE HOUSING FINANCE COMMISSION.... 25APPENDIX B: HOMEOWNERSHIP DIVISION
APPENDIX C: MULTIFAMILY HOUSING AND COMMUNITYFACILITIES DIVISION
APPENDIX D: FINANCE DIVISION
APPENDIX E: ASSET MANAGEMENT & COMPLIANCE DIVISION
APPENDIX F: RECENT ACCOMPLISHMENTS OF THE COMMISSION
APPENDIX G: MAJOR ACCOMPLISHMENTS OF THE COMMISSION SINCE 1983.. 57 INDEX
INTRODUCTION TO THE
WASHINGTON STATE HOUSING FINANCE COMMISSION’S2016-2017 HOUSING FINANCE PLAN The Commission uses its Housing Finance Plan as our strategic planning document rather than undertaking the development of a different five-year strategic plan. Annually, we adjust our long-term strategic directions at the commissioner planning sessions, but we believe that the two-year period of the Housing Finance Plan allows us to better reflect and respond to the rapid rate of change and the practicalities of operating in the current market and housing environments. The annual work program and budget for the Commission provide business objectives for each division and our allocation of resources to meet those objectives for each fiscal year.
The basic format of this plan remains consistent with the plans of previous years. Following these introductory remarks, you will find an overview of the Commission, our plan for financing affordable housing, nonprofit facilities, beginning farmers and ranchers and energy projects through 2017 and a detailed description of Commission policies for each of our current programs. In the back of the document, you will find a presentation of the results achieved by the Commission.
What the plan does not contain is a summary or forecast of the economic situation of the State.
For those that are interested in such economic forecasting, we refer you to the Office of Financial Management (www.ofm.wa.gov) and the Economic and Revenue Forecast Council (www.erfc.wa.gov) for updated information regarding the State’s financial situation.
LOOKING AHEADAlthough the Housing Finance Plan focuses mainly on the next two years, the long-term nature of housing requires us to think about contingencies that could arise over the next two decades. In previous plans, we talked about the challenges posed by the aging of the baby boom generation. Between 2008 and 2020, Washington’s population of persons 65 and older will increase by more than 75 percent, going from 686,000 to more than 1,200,000 persons.
This requires us to keep focusing on preparations to meet the future housing needs of our senior citizens.
CERTAIN THINGS WE NEED TO CONSIDER 1Our enabling legislation (RCW 43.180) specifies a number of issues related to the housing market and affordable housing needs that we should consider in the development of the Housing Finance Plan. As requested by legislators, we have added some additional items in
our plan. These policy issues include:
(1) The use of funds for single-family and multifamily housing;
1 The Commission adopts policies and program guidelines that address these issues. However, not every issue is addressed in every program. We have included an index at the end of the 2016-2017 Housing Finance Plan that cross-references these priorities and the Commission programs that addresses them.
(2) The use of funds for new construction, rehabilitation, including refinancing of existing debt, and home purchases;
(3) The housing needs of low-income and moderate-income persons and families, and of elderly or mentally or physically handicapped persons;
(4) The use of funds in coordination with federal, state, and local housing programs for low-income persons;
(5) The use of funds in urban, rural, suburban, and special areas of the state;
(6) The use of financing assistance to stabilize and upgrade declining urban neighborhoods;
(7) The use of financing assistance for economically depressed areas, areas of minority concentration, reservations, and in mortgage-deficient areas;
(8) The geographical distribution of bond proceeds so that the benefits of the housing programs provided under this chapter will be available to address demand on a fair basis throughout the state;
(9) The use of financing assistance for implementation of cost-effective energy efficiency measures in dwellings;
(10) The use of funds to increase the supply of affordable and decent housing throughout the state;
(11) The use of funds to promote the provision of affordable housing for the longest period of time possible;
(12) The use of funds to promote increased housing density; and (13) To give priority for the allocation of multifamily bond cap to eligible applications submitted by non-profit organizations.
We take all of these issues into consideration during the development of this plan and the Commission’s programs. Of course, we cannot always set specific objectives in each plan for every issue, we cannot always implement specific programs to focus on each issue at any given time; nor can we address each issue in every program that we operate. And while we do not provide a summary of our considerations regarding each item mentioned in this plan, we use our evaluation criteria and program policies to give weight and priority to activities within programs to address specific issues outlined above.
We direct available resources to different programs to address various issues to meet our annual objectives. The plan’s explanation of the program policies and allocation criteria used to select projects and allocate resources, demonstrates how we give consideration to these policy issues in our programs and financings. The cumulative impact of achieving our annual objectives contributes to our record of success at addressing these important issues over the Commission’s history.
ACKNOWLEDGEMENTSWe thank our partners, including state agencies, local housing authorities, nonprofit organizations and our business partners in the banking, finance, investment, and construction industries for helping us reach our financing goals and our program objectives. Without that 2016–2017 WSHFC HOUSING FINANCE PLAN assistance and cooperation, we could not be successful. We also thank the Commission’s hardworking staff, for maximizing our resources through their professional expertise, dedication and creativity.
Also, we would also like to acknowledge the citizens of Washington who participate in our programs. The need for decent, affordable housing is constant, yet at different points in their lives, people may need help. Our programs are designed to assist young families, people who need affordable rental homes and the elderly to maintain a secure living situation. Helping the people of Washington by opening doors to a better life is the reason we exist.
We also express our appreciation to the national and international investment community and out-of-state developers who provide funding and their development expertise to increase the quality of life in this State.
Finally, we specifically want to acknowledge that Governor Inslee and our State Legislature share our belief that housing matters, as evidenced by their strong support of affordable housing programs. We thank them for that support and urge them to continue their investment in housing that is affordable for all Washington residents.
Karen Miller, Chair, Washington State Housing Finance Commission December 2015
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OVERVIEW OF THE
HOUSING FINANCE COMMISSION
THE WASHINGTON STATE HOUSING FINANCE COMMISSION IS A SELFSUPPORTING AGENCY THAT ACHIEVES ITS SOCIAL AND ECONOMIC
OBJECTIVES AT NO COST TO THE TAXPAYERS OF OUR STATE. 2The Commission was created in 1983 to act as a financial conduit which, without lending the credit of the state, can issue non-recourse revenue bonds; participate in federal, state, or local housing programs; make additional funds available at affordable rates to help provide housing throughout the state; and encourage the use of Washington forest products in residential construction.
The Commission is authorized to provide construction and permanent financing for low- and moderate-income housing, nonprofit facilities, capital equipment, beginning farmers and ranchers, energy efficiency and energy production within the state.
The Commission has 11 voting members. Two commissioners, the State Treasurer and the Director of the Department of Commerce, serve ex officio and eight commissioners are appointed by the Governor to four year terms. The Chair of the Commission is appointed by and serves at the pleasure of the Governor. The Commissioners represent various geographic, business, and public interests.
In 1987, the Commission was designated as the state’s allocating agency for the federal LowIncome Housing Tax Credit program. In 1990, the Commission’s authority was expanded by the Legislature to finance nursing homes, as well as capital facilities and equipment owned by nonprofit 501(c)(3) organizations. In 2005, the Legislature gave the Commission the authority to issue bonds for beginning farmers and ranchers. Finally, in 2009, the Legislature empowered the Commission to create a Sustainable Energy Trust, if feasible, and to participate in energy efficiency and renewable energy projects for housing and non-housing facilities.
The Department of Commerce and the Department of Financial Institutions (DFI) have contracted with the Commission to administer programs such as the Land Acquisition Program, the Rapid Response Program, the Equity Fund, the Washington Works program, and housing counseling, which are financed in whole or in part with state funds. These programs may or may not continue to be administered by the Commission in the future.
The Commission’s enabling legislation requires a State Housing Finance Plan to be updated from time to time and requires the Commission to report to the Legislature at least every two years on the implementation of the plan. The plan outlines the policies of the Commission and provides a brief overview of the housing finance and other programs the Commission intends to offer during the plan period. The Commission reports to the Legislature on the financing completed in compliance with the Plan through its annual report. The plan will remain in effect until it is replaced or revised by a subsequent plan that is adopted by the Commission.
2The Commission receives no direct state appropriations. It does, however, administer contracts for other state agencies using state funds when the Commission’s involvement can add value or is required by law.
More detailed information regarding individual programs that the Commission operates is available by request.