House panel advances pilot to use state-held bonds for affordable for‑sale housing; Treasury raises revenue concerns

The House Finance Committee voted 7-6 to send Senate Bill 6, a pilot program to let the state treasurer invest in bonds issued by quasi‑governmental entities to finance affordable for‑sale housing, to the committee of the whole with a favorable recommendation.

Sponsors said the program — branded in testimony as the Driving at Home pilot — would provide below‑market construction financing to developers with long‑term resale restrictions and then convert loans into 30‑year mortgages at reduced interest rates to increase purchasing power for low‑ and moderate‑income buyers. The initial pilot would use $50 million in state-held capital, including a proposed $40 million nonprofit bond issuance, to support roughly 175–200 homes, supporters said.

“Senate Bill 25 0 0 6 is a pilot program,” Representative Bradfield told the committee, framing the bill as a targeted investment to expand affordable homeownership and preserve long‑term affordability through tools such as community land trusts and deed restrictions.

Thomas Bridal, chief executive officer of the Colorado Housing and Finance Authority (CHFA), described CHFA’s role and economic estimates: “CHFA has raised and invested over $37,000,000,000 into Colorado… CHFA estimates that the initial investment authorized by Senate Bill 6 would support the creation of roughly 200 homes for low and moderate income Coloradans, generating about $155,000,000 in economic impact to the state and supporting nearly a thousand jobs.”

The Treasury Department, which would implement the program if enacted, raised concerns about the fiscal tradeoffs. Leah Marvin Riley, policy director for the Department of the Treasury, said the bonds in the bill were expected to yield roughly 3 percent while comparable market investments currently yield about 6 percent, and she estimated the foregone interest income at about $1.5 million. “Due to the guidelines and treasury statutes and the investment policy statement of the department, this statute change is necessary in order to revise the standards and allow us to make this kind of investment,” Marvin Riley told the committee.

Committee members pressed sponsors on liquidity, fiduciary duty and scale. Representative Marshall questioned why a treasurer would accept below‑market, illiquid investments; supporters said the pilot is intended as a revolving program and that repayments could be reinvested to fund future projects. Sponsors offered an amendment (L005) to require that reinvestment authority triggers only after at least $25 million has returned to the treasurer, and the committee adopted the amendment without objection.

Opponents and some public witnesses cautioned that the measure would lock $50 million in principal outside the state’s general investment pool for a long term and could limit future flexibility; Natalie Menton testified online against the bill, calling the commitment “a long term commitment with limited flexibility for the state treasurer.”

After debate and the L005 amendment, Vice Chair Totten moved SB6 as amended to the committee of the whole with a favorable recommendation; the committee approved the motion 7-6.

Supporters said the pilot is intended to be catalytic, leveraging CHFA and nonprofit capacity to expand affordable homeownership. Treasury staff and some members warned of an immediate revenue impact and urged caution as to precedent and liquidity; sponsors said the program’s revolving structure would allow repayments to renew the fund for future projects.