Last week, the U.S. Department of Treasury announced the extension of the New Issue Bond Program (NIBP) and Temporary Credit & Liquidity Program (TCLP). The NIBP extension notice states that Housing Finance Agencies (HFAs) may extend the deadline for release of Escrowed Proceeds and use the remainder of NIBP allocations through December 31, 2012. According to the NIBP and TLCP term sheets released by Treasury, the agency has made the following changes:

  • HFAs opting to extend will be allowed a total of nine release dates for each single-family and multifamily program;
  • New formula and mechanisms for determining the NIBP Permanent Rate;
  • HFAs are no longer required to issue market bonds in conjunction with single family issues;
  • HFAs are now subject to a new Escrow Redemption fee;
  • HFAs will now be able to use single-family NIBP allocations for multifamily activities;
  • New pricing mechanisms for Temporary Credit and Liquidity Facilities (TLCFs);
  • Bank bond modifications for the TLCP program including new bank bond Maturity Rates, new Base Rates and new
    Default Rates; and
  • New rules applicable to participants of both the NIBP and TCLP programs including a limit on refunding, the required use of NIBP proceeds to refund TCLP-supported bonds, an increased flexibility in using single-family NIBP Escrow Proceeds, and a freeze on certain NIBP bond proceed releases.

Treasury plans to hold a webinar to discuss the NIBP extension on November 29, 2011. HFAs must submit an election letter by 5:00 pm EST December 9, 2011 if they wish to continue using the NIBP. The letter should be sent via first class mail to the following addresses:

Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attention: Jessica Wright, Project Analyst, Customer Engagement, HFA Team

Freddie Mac
1551 Park Run Drive
McLean, Virginia 22102-3110
Attention: Mark Spates, Director, Affordable Lending

To view the NIBP Extension Term Sheet,click here.
To view the TLCP Extension Term Sheet, click here.
To view the election letter, click here.