House committee hears proposal to raise GHFA bond cap from $3 billion to $12 billion

The state House Budget and Fiscal Affairs Oversight committee held a hearing on a bill to increase the Georgia Housing Finance Authority(GHFA) bond issuance cap from $3,000,000,000 to $12,000,000,000, a change presenters described as minor in text but large in impact.

Wesley Brooks, deputy commissioner for homeownership at the Georgia Department of Community Affairs (DCA) and the Georgia Housing Finance Agency, told the committee the agency issues private activity bonds that it uses to buy mortgages for first-time and moderate-income buyers and then services those loans in-house. "We actually just got a notification today, again, rated triple A," Brooks said, describing the GHFA bond rating and attributing it to conservative servicing and low delinquency rates.

Brooks and an unidentified bill presenter said the loans GHFA buys are largely insured by federal programs (FHA, VA or USDA) and that mortgage payments, plus insurance where applicable, repay bondholders. The sponsor framed the change as affecting lines of statutory text that would remove the $3 billion aggregate cap and replace it with $12 billion; presenters said the larger cap is intended to allow the authority to "stack" bond series over roughly a 10-year planning horizon rather than provide $12 billion in cash immediately.

Why it matters: supporters said the change would preserve the state's ability to continue providing below-market or down-payment assistance products to teachers, first responders and other buyers who qualify for Georgia Dream and similar programs. Betsy Bradfield of the Georgia Association of Realtors said the state is in an "absolute housing crisis" and that these loan products are "quite vital" to widening access for first-time buyers. Austin Hackney of the Home Builders Association of Georgia also voiced support.

Scope and safeguards: DCA officials said about 98% of their loans are government-backed (approximately 91% FHA, about 3% VA and the remainder USDA or conventional). Brooks said the GHFA currently services about 14,000 mortgages representing roughly $1.8 billion in outstanding assets and reported a foreclosure rate of about 0.06% last year, substantially below national FHA foreclosure averages. Christopher Nunn, commissioner at DCA, clarified that GHFA is the issuer and that the state is not pledging its full faith and credit to the bond portfolio; he said oversight is twofold, by the GHFA board and the Georgia State Financing and Investment Commission (GSFIC).

Concerns raised: Representative Ridley asked who would make bondholders whole if asset values fell; presenters responded that, because the majority of loans are federally insured, an insurer (FHA, VA or USDA) would cover insured shortfalls and that GHFA is self-funded. Committee members also pressed on whether the program is limited to single-family housing (presenters said yes for this bond type) and whether federal Treasury pauses or federal funding changes could disrupt the program (presenters said private-market buyers primarily fund the bonds, though some counseling services are federally funded and could be affected).

Next steps: the committee conducted the hearing only and did not take a vote. Committee staff said they will follow up with presenters and notify members about scheduling a possible future vote.