Senate committee hears bill to let New Hampshire Housing guarantee multifamily loans to spur affordable housing

Sen. Rebecca Perkins Quoca introduced Senate Bill 86 on Feb. 11, proposing a loan-guarantee program administered by the New Hampshire Housing Finance Authority to help refinance or originate multifamily and other eligible affordable housing loans. Perkins Quoca said the program could leverage private capital and that guaranties historically impose low fiscal risk to the state while helping projects close.

"This bill asks the state to do an economic development function that other states provide," Perkins Quoca said, adding the program would give the state another tool to address housing shortages in a tight budget year.

Witnesses representing banks, nonprofit lenders and housing advocates testified in favor. Ryan Hill of the New Hampshire Bankers Association said guarantees that cover up to 80% of principal would reduce lender risk and encourage investment in projects that may not otherwise secure financing. "We respectfully urge the committee to support, advance this important piece of legislation," Hill said.

Abby Bronson, director of policy and advocacy at the New Hampshire Community Loan Fund, described how guarantee capacity would help resident-owned manufactured-home park purchases and said guarantees would make impact investors more likely to provide capital for increasingly costly park buyouts.

Rob Dapis, executive director of New Hampshire Housing, said the agency already administers federal loan-guarantee work and would create rules and eligibility criteria to limit state risk. "Our goal would be to have zero defaults," Dapis said, noting the agency's long record in federal risk-sharing programs.

Committee members asked about moral hazard and whether guarantees would prompt lenders to take excessive risk. Hill said rulemaking could address underwriting standards; Dapis said loans seeking guarantees should be ineligible for federal risk-sharing programs so the state is not duplicating federal coverage.

The chair said SB 86 will be referred to the committee's subcommittee on housing for further consideration.

Why it matters: Advocates say loan guarantees can unlock private capital and preserve or expand affordable housing — including resident-owned manufactured-home parks — by de-risking lenders. The state would hold contingent liabilities on its balance sheet while hoping to use little or no general-fund dollars if defaults remain rare.

The committee took testimony and referred the bill to the subcommittee on housing for rulemaking details and risk safeguards.