Funds Available Now (“FAN”) Pilot Program

Program Description:

With the approval by Congress in 1998 of the Quality Housing and Work Responsibility Act, the U.S. Department of Housing and Urban Development (“HUD”) allows public housing agencies (“PHAs”) to issue bonds or obtain direct loans using their capital fund grants (“Capital Funds”) for debt service/collateral. No real estate assets are pledged. The Capital Funds awarded to PHAs by HUD are appropriated annually by Congress. This financing alternative allows PHAs to securitize Capital Funds and accelerate correcting deferred maintenance and funding modernization/rehabilitation costs, health & safety improvements and the development of new units. To pledge Capital Funds as collateral for financings, PHAs must apply and obtain written approval from HUD.

Subject to HUD’s approval for PHAs to pledge Capital Funds, CHFA’s Funds Available Now (“FAN”) Pilot Program enables a PHA to pledge up to 33% of its current and future years’ Capital Fund allocations as security for borrowing in a pooled bond financing to be organized by CHFA. PHA loan amounts will be based on current Capital Fund appropriations by HUD. Securitization costs will be shared by participating PHAs based on their proportionate share of bond issuance proceeds. This program is available only for federal housing developments that receive annual HUD Capital Fund grants and for PHAs that are in good standing with HUD. CHFA will act as an intermediary between participating PHAs and HUD in a pooled bond financing to accelerate the funding of capital projects. CHFA’s FAN Pilot Program remains contingent upon satisfaction of all HUD requirements to finance Capital Funds and a sufficient level of PHAs’ participation, as determined by CHFA, to realize economies of scale with respect to securitization costs. CHFA will issue bonds on behalf of participating PHAs to finance those PHAs’ capital projects.

Click here for more information (PowerPoint)