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CHFA reports stronger investment income, steady delinquencies; Series E sale described as "a very good sale"
Summary
At its Sept. 26 meeting the CHFA Finance/Audit Committee heard August financial results showing investment and mortgage interest revenue ahead of budget while bond interest expense rose; loan production remained strong, delinquencies were stable, and JP Morgan called the 2024 Series E sale "a very good sale." The committee also recommended broker-dealer lists to the Board.
The Connecticut Housing Finance Authority’s Finance/Audit Committee on Sept. 26 reviewed August financial and portfolio reports that showed higher-than-budgeted investment and mortgage interest income alongside increased bond interest expense, and received a brief market summary of CHFA’s 2024 Series E bond sale.
Allison Murphy, CHFA director of financial reporting and control, reported that mortgage loan and investment interest revenue was $18,000,000 above budget through August and $24,400,000 higher than the same period last year. Bond interest expense was $8,700,000 above budget through August and $19,400,000 higher than last year. Murphy said outstanding bonds as of Aug. 31 were $357,000,000 higher than the same date a year earlier, and servicer fees were $7,200,000 above budget through August. Administrative expenses were $4,700,000 below budget and $122,000 higher than the prior year; excluding salaries and benefits of $20,000,000, current-year expenses were $413,000 lower than last year. The change in net position was above target by $12,300,000.
John Chilson, senior director of portfolio management, said loan production in August remained strong. He reported the mortgage-backed security portfolio balance ended the month at $3,200,000,000 (a $65,000,000 increase from July). The whole-loan portfolio declined by 61 loans totaling $8,000,000 and ended with a portfolio balance of $1,100,000,000. Chilson said the whole-loan delinquency rate was a little over 5%, in line with the national average and 18 basis points lower than Connecticut’s average. The carrying balance for loans in foreclosure declined roughly $3,000,000 to $11,000,000 with 20 fewer foreclosures than a year ago. For August, CHFA funded 58 Downpayment Assistance loans totaling $660,000 (average loan about $11,000) and 320 Time To Own forgivable loans totaling $9,800,000 (average loan just under $31,000).
For the multifamily portfolio, Chilson reported there were no new loan closings in August; the portfolio declined by five loans to 591 loans totaling $1,400,000,000. There were seven permanent loan delinquencies (unchanged from the prior month) and the overall multifamily delinquency rate was just under one-half of 1%.
Brent Chandaria of JP Morgan summarized the 2024 Series E bond sale and told the committee it was "a very good sale," outlining the market conditions that benefited the transaction.
Hazim Taib presented a separate resolution authorizing lists of broker-dealer firms after CHFA’s financial advisor, Caine Mitter, issued an RFI and received 25 responses (16 for To-Be-Announced mortgage-backed security sales and nine for the selling group). Staff recommended an 11-firm list (plus CHFA bond underwriters) for TBA sales and a 24-firm selling group; the committee voted unanimously to recommend the resolution to the Board.
Mr. Jerry Abrahams moved and Mr. Timothy Hodges seconded the motion to recommend the broker-dealer resolution; the committee voted unanimously to recommend it to the Board.
