First-Time Purchase of California Housing Finance Agency Bonds by Federal Home Loan Bank of San Francisco to Boost Homeownership in California

Business Wire, Sept 12, 2000

Business Editors/Real Estate Writers

SAN FRANCISCO--(BUSINESS WIRE)--Sept. 12, 2000

The Federal Home Loan Bank of San Francisco has agreed to purchase $102 million in California Housing Finance Agency mortgage revenue bonds backed by home loans to low- and moderate-income first-time homebuyers in California. "This investment represents a perfect match between the respective housing missions of the Federal Home Loan Bank of San Francisco and the California Housing Finance Agency," said Dean Schultz, president and chief executive officer of the Bank.

The taxable, variable rate bonds will be used to support the California Housing Finance Agency's home purchase program. According to Theresa A. Parker, CHFA's Executive Director, "We are delighted to be doing our first transaction with the Federal Home Loan Bank of San Francisco. The Bank's support will greatly assist our agency in meeting Governor Davis' challenge that we provide $1 billion each year for home loans for low- and moderate-income first-time homebuyers. Because of restrictions on the amount of tax-exempt bonds we are authorized to sell, we need to issue approximately 60 percent of our bonds in taxable form. This kind of transaction makes sense both for CHFA and for the Bank, given our similar missions."

"This investment will directly benefit low- and moderate-income first-time homebuyers in our district, while providing us with a safe and attractive return," said Dean Schultz. "This transaction represents our first direct investment in a state housing finance agency's bonds, and highlights the effectiveness of public-private partnerships in promoting housing accessibility and affordability."

The California Housing Finance Agency is a housing associate of the Federal Home Loan Bank of San Francisco. Under a recently approved regulation on core mission activities, the bonds being purchased today qualify as core mission assets for the Bank.

The California Housing Finance Agency was established under state law in 1975 to act as the state's housing bank. Its mission is to finance below-market-rate loans to create safe, decent, and affordable rental housing and to assist first-time homebuyers in achieving the dream of homeownership. Over its 25-year history, CHFA has issued over $15 billion in revenue bonds, financing more than 25,000 units of affordable rental housing and providing over 100,000 home loans to first-time homebuyers. CHFA's operations are entirely self-supporting, and its debt obligations are separate from those of the State of California.

The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services that help member financial institutions provide home mortgages to consumers of all income levels and make loans that build neighborhoods and communities. The Bank also funds community investment programs that help members create affordable housing and that foster partnerships among lenders, housing developers, community organizations, and government agencies. With over $129 billion in assets, the Bank is the largest of the 12 banks in the nation's Federal Home Loan Bank System. It serves and is owned by commercial banks, savings institutions, credit unions, and thrift & loan companies headquartered in Arizona, California, and Nevada. For more information about the Bank, visit www.fhlbsf.com.