Federal Home Loan Bank of San Francisco Developing New Foreclosure Prevention Program
San Francisco – The Federal Home Loan Bank of San Francisco announced today that it is developing a new affordable housing set-aside program, the Homeownership Preservation Subsidy (HPS) program, to help provide a long-term solution for low- to moderate-income homeowners who are at risk of losing their homes because of increases in their monthly mortgage payments. The Bank’s HPS program will enable its member financial institutions to offer relief to their customers in situations where an existing loan held by the member can be restructured to remain affordable for the homeowner.
The program was approved yesterday by the Federal Housing Finance Board, the Bank’s regulator, which agreed to development of the program under the Affordable Housing Program (AHP) regulations.
“We’re very pleased that the Finance Board is allowing us to move forward with development and implementation of our HPS program,” said Dean Schultz, President and Chief Executive Officer of the Federal Home Loan Bank of San Francisco. “This initiative will enable our members to use Affordable Housing Program funds to help low- and moderate-income homeowners avoid foreclosure and keep their homes.”
Bank member financial institutions can use HPS funds to restructure eligible adjustable rate mortgages into affordable fixed rate 30-year loans. The Bank will provide $1 in HPS funds for every $2 provided by the member, up to a maximum amount of $25,000 in HPS funds per restructuring. In approving the program, the Federal Housing Finance Board stipulated that any mortgage loan to be refinanced or restructured may not have an outstanding balance beyond the conforming loan limit of $417,000.
The Bank plans to make $10 million in AHP funds available for the HPS program in 2008, assistance the Bank estimates could reach up to 1000 homeowners. The Bank expects to start offering the program to its members in March 2008.
About the Federal Home Loan Bank of San Francisco
The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services that help member financial institutions make home mortgage loans to people of all income levels and provide credit that supports neighborhoods and communities. The Bank also funds community investment programs that help members create affordable housing and promote community economic development. The Bank’s members—its shareholders and customers—are commercial banks, credit unions, savings institutions, thrift and loans, and insurance companies headquartered in Arizona, California, and Nevada.
