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CalHFA committee moves to test statewide partnership to finance new affordable housing
Summary
At a CalHFA New Opportunities Committee meeting, staff outlined a Local Housing Investment Partnership to finance new construction affordable units (targeting 50%–120% AMI with 10% at 50% AMI). The committee approved an RFI process and signaled intent to refer the concept to the full board.
The California Housing Finance Agency's New Opportunities Committee reviewed a proposal to design a Local Housing Investment Partnership that would finance new construction of affordable housing and asked staff to run a statewide RFI to gauge local public‑agency interest.
Erwin Tam, CalHFA's director of finance, said the concept would target rentals for households in a roughly 50%–120% area median income (AMI) range and that "we do units, 10% of the units at 50% AMI." He described two ownership models: Option A would have a local public agency own improvements and lease land for development; Option B would have CalHFA own improvements and potentially provide additional capital. Tam said the structure aims "to achieve a tax exempt cost of capital, which would lower the financing cost of debt on the project."
The program is designed for new construction rather than acquisitions, Tam said, so it would be "additive to the number of units in the state of California." He recommended using an RFI or questionnaire as a market test — run for several months — to identify suitable local partners, potential parcels and the assumptions necessary for underwriting.
Committee members pressed staff on how the model would avoid pitfalls seen in prior joint powers authority (JPA) workforce housing deals. Director Cervantes warned that "many of them have actually run into real trouble" including covenant defaults; Tam replied that CalHFA differs from those JPAs because it is a direct lender with experienced staff and an asset management division and because it can access lower cost capital via its AA‑rated indenture.
Members also asked where the model would work geographically and whether entities that can issue their own debt — for example, housing authorities, school districts and public universities — would still partner with CalHFA. Tam said preliminary modeling suggests feasibility in multiple regions but emphasized that the RFI will help identify which localities and agency types are the best partners. He said the agency is "casting a very wide net" to determine interest and the contours of a potential program.
Tam flagged the revenue context that prompted the exercise: the existing Multiborrower Infusion Program (MIP) depends on three elements — CDLAC volume cap authorization, tax credits from TCAC, and SB 2 recording‑fee monies — and two of those revenue sources are volatile or uncertain. He said the proposed program would operate outside the existing CDLAC/TCAC/general‑fund financing system to reduce dependence on those constrained resources.
Committee members supported the RFI approach as a low‑cost way to test market appetite and the program's feasibility; Director Grant and others urged staff to "tell our story" in the RFI materials to attract partners. The committee confirmed the intent to forward the concept to the full board for consideration at the next board meeting, and staff said they would present findings and any funding request only after synthesizing RFI responses.
Action items recorded during the meeting included formal approval of the prior meeting minutes and the committee's referral intent to the full board. No public comments were made during the meeting's public‑comment period, and the committee adjourned.
