Standby Bond Purchase Agreements Provide Liquidity Support for HFAs

 
Our new Standby Bond Purchase Agreement (SBPA) program, introduced in December 2007, provides district housing finance agencies with contingent liquidity support for bond issuances. “This mission-based program allows FHLB Des Moines to expand its support for affordable housing through the housing finance agencies in our district,” said FHLB Des Moines Chief Business Officer Mike Wilson. “We are looking forward to building relationships with our housing finance agencies through the SBPA program.”

The Iowa Finance Authority will be the first housing finance agency to use the new liquidity support product. “The Standby Bond Purchase Agreement with FHLB Des Moines provides liquidity support for our variable rate single-family bonds,” Iowa Finance Authority Executive Director Bret Mills stated. “As a liquidity vehicle, the Standby Bond Purchase Agreement allows the Finance Authority to issue bonds at more attractive rates, reducing our cost of funds and leading directly to lower interest rates to first-time home buyers under our FirstHome and FirstHome Plus programs.”

A housing finance agency must have a minimum long-term rating of A- or equivalent and a stable outlook at the time the Standby Bond Purchase Agreement is executed. The bonds to be supported by the Standby Bond Purchase Agreement for variable rate demand obligations issuances will need to meet specific guidelines. For more information about the Standby Bond Purchase Agreement program, please contact Steve Schuchmann at 800.544.3452, ext. 1007.