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- Referred to housing
- Referred to housing
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Sponsor's memo
BILL NUMBER:A8786
Title of bill
An act to amend the private housing finance law, in relation to the powers of the New York state housing finance agency to finance certain multi-family housing projects
Purpose Or General Idea Of Bill: This bill would grant the New York State Housing Finance Agency (HFA) authority to issue unrated bonds for private placement to finance affordable housing programs.
Summary Of Specific Provisions: Section 1 of the bill amends Subdivi- sion 29-a of Section 44 of the Private Housing Finance Law to grant HFA additional authority to issue bonds for private placement to an accred- ited investor as defined by section 051 (a) (1), (2), (3) or (7) of part 230 of title 17 of the Code of Federal Regulations that have not received an investment grade rating from a recognized rating agency, as well as extend their authority until June 16, 2011. Obligations issued in this fashion shall not exceed $10 million per project, and shall not annually exceed ten percent of total bonds issued by HFA in the previous year. HFA shall include any private placement bonds issued in its annual report pursuant to Section 2600 of the Public Authorities Law,
Section 2 of the bill provides for an immediate effective date.
Effects Of Present Law Which This Bill Would Alter: Currently, SONYMA must receive a rating for any bonds they issue and loans financed with such obligations must be fully secured as to principal and interest.
Justification: Private placement of bonds to finance affordable housing is a proven method of financing for certain local banks in New York. However, HFA does not currently have statutory authority to issue unrated bonds for private placement beyond HFA financing of Article 2 Mitchell-Lama projects.
Loans financed with proceeds of unrated HFA bonds issued for private placement offer gains in efficiencies to HFA borrowers. Without the involvement of rating agencies, outside underwriters, credit enhancers and their respective legal counsels, private placement transactions can be completed at a substantially lower cost to the borrower. These savings are particularly important to smaller 100% affordable projects, for which the cost of issuance of a public offering are often prohibi- tive. HFA would set limitations on the end users of bonds issued for private placement and would only place bonds with an accredited investor as such term is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D, as adopted by the United States Securities and Exchange Commission under the United States Securities Act of 1933.
Prior Legislative History: This is new legislation.
Fiscal Implications For State And Local Governments: None to the State
Effective Date: This bill takes effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.