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CalHFA board adopts final year of strategic plan, approves $50.5M operating budget; staff outlines revenue challenges and capital‑markets moves
Summary
The CalHFA board approved the agency’s fiscal 2025–26 business plan and operating budget and heard staff updates on unit production goals, market pressures, and recent capital markets activity including new indentures, bond transactions and hedge terminations that produced one‑time revenue.
The California Housing Finance Agency board on June 23 approved the agency’s business plan for fiscal 2025–26 and adopted an operating budget for the coming year while hearing a capital‑markets briefing that staff said both steadies access to funding and shows the agency is adapting to market volatility.
By formal action the board approved Resolution 25‑19 to authorize the updated one‑year business plan that closes out the agency’s current three‑year strategic cycle and Resolution 25‑20 to adopt the fiscal 2025–26 operating budget. Acting director Rebecca Franklin and finance staff told the board the plan focuses CalHFA on expanding multifamily lending, preserving financial sustainability and investing in operational capabilities and technology to support growth.
Staff reported production and revenue targets that reflect current market conditions: a single‑family production goal of 4,000 units for the coming year and a multifamily production target of just over 4,700 units. Kelly Mattson, who presented strategic measure updates, said the Turner Center first‑time homebuyer market study is near completion but delayed and expected in July; she noted one planned initiative — a mortgage‑professionals newsletter — was canceled after stakeholder feedback indicated it would not add value.
On the budget, staff proposed $50.5 million in operating expenses for fiscal 2025–26, an increase of about 9.2% year over year driven largely by salaries and benefits and by one‑time investments in technology and program capacity. Staff projected overall revenues of roughly $57 million; single‑family revenues were expected to fall about 26% year over year while multifamily revenues were projected up about 7%.
Finance director Erwin Tam briefed the board on capital‑markets activity, the agency’s two new bond indentures and recent transactions intended to expand CalHFA’s access to capital. Tam said the agency has priced multiple bond series this year and launched a taxable program to support single‑family lending alternatives. He also described how earlier hedging and related actions produced one‑time proceeds: "Because we acted in 2021 and 2022 to hedge the agency's risks, this agency received $24,000,000 in revenue from our termination of hedges," he said, and staff used some of those funds to manage bond liabilities and reduce short‑term execution risk.
Tam described the My Access program and noted CalHFA’s recent steps to establish repeatable bond execution platforms for multifamily and single‑family financing. Acting director Franklin framed the upcoming year as one of targeted investment: "We cannot continue to do the same things we're just doing. We need to branch out," she said, describing pilots and proof‑of‑concepts to increase multifamily production and revenues.
Board members asked about downside risks — including tax credit investor retrenchment, construction timing and interest‑rate volatility — and staff described the agency’s operating reserves and financial‑risk policies that allow management to adjust contracting and staffing before drawing reserves. Board members also recommended deeper benchmarking against other state housing finance agencies and asked staff to bring more detailed pipeline and portfolio reports to future meetings. The board approved both resolutions by roll call.
