Treasury Ends A Successful Aid Program

The Treasury Department recently announced it was ending a little known program that has successfully stoked states and cities with $23 billion in credit to boost their housing finance efforts. The program, called the Housing Finance Agency (HFA) initiative, has been a bright spot, accomplishing what it set out to do. So why are we winding it down?

The initiative has two parts: the New Issue Bond Program (NIBP), which supported new lending to homeowners by state and local HFAs, and the Temporary Credit and Liquidity Program (TCLP), which backed bonds and shored up existing debt for 90 state and local FHAs. All told, the program has helped over 200,000 homeowners, according to The treasury Dept.

Fitch Ratings late last year upgraded Utah's housing agency, thanks to the HFA initiative, and saluted Idaho's use of the credit. New Hampshire used the Federal backing to build multifamily properties and offer 30-year mortgages at historically low rates -- as cheap as 4.375% with one point in late December.

It might be worth extending a program that had such demonstrable results. Surely we're not out of the woods yet.