SmartMove Second Mortgage Pool Expands To $26.5 Million

A number of local banks with headquarters or offices in Newtown joined with the Housing Development Fund (HDF) to announce the SmartMove second mortgage loan pool recently expanded to a new total of $26.5 million, after the initial pool of $9 million was deployed before its three-year schedule. The HDF is a unique nonprofit bank providing funding for affordable housing and an array of homebuyer education and assistance programs.

Based on the success of this program targeted to first-time homebuyers, the loan pool’s seven member banks committed an additional $15.5 million to be deployed over two years. HDF expects to complete deployment of the pool by June of 2009.

The banks that contribute to the SmartMove loan pool include Newtown Savings Bank, Savings Bank of Danbury, Citibank, People’s United Bank, First County Bank, Hudson City Savings Bank, and Bank of New York Mellon Corporation.

SmartMove helps bridge the affordability gap for first-time homebuyers by lending up to 20 percent of the down payment on a home at a low three-percent interest rate for 20 years. In addition to cost-effectively supplementing buyers’ down payments, SmartMove allows them to avoid paying private mortgage insurance (PMI), making homeownership even more affordable.

“The SmartMove program is successful because it is meeting a real and growing need in our high-priced housing market,” said HDF President & CEO Joan Carty, who explained that the number of SmartMove loans has increased steadily since the program launched in 2004. “In addition, HDF’s banking partners have enthusiastically stepped up to the plate to help us innovate programs like SmartMove that allow them to reinvest in their communities and result in greater homeownership for Connecticut.”

HDF assisted 35 homebuyers with SmartMove loans by the end of its first fiscal year, 2005. Each successive year has increased exponentially, and the organization is on target to close 165 new SmartMove loans in fiscal year 2007-2008.

HDF received a special recognition from the Connecticut Mortgage Bankers Association (CMBA) when it launched SmartMove and recently received a second recognition for the ongoing success of the program. The CMBA Committee for Affordable Housing selected HDF for this latest honor. HDF financially assisted its 500th Homebuyer in December 2006 and has at the present time helped 650 households to homeownership.

“In developing pools of funds for its programs that finance the development of affordable units and, in the case of SmartMove, close the affordability gap for first-time homebuyers, HDF has worked closely and effectively with the Connecticut banking community,” said Rose Holbrook, a member of the CMBA Affordable Housing Committee and marketing and customer service coordinator for the Connecticut Housing Finance Authority (CHFA).

“The type of assistance SmartMove provides, tied to traditional, fixed-rate mortgage financing, as required by HDF, is promoting successful homeownership.”

To date, SmartMove loans totaling $13.9 million have leveraged $53 million in first mortgage loans, according to HDF data.

The Housing Development Fund was founded in 1989. It has expanded to serve all of southwestern Connecticut from its Stamford headquarters and a Danbury office opened in 2004. HDF’s homebuyer assistance programs include its First Time Homebuyers Program, SmartMove low interest second mortgage program, CHFA (Connecticut Housing Finance Authority) approved Homebuyer Education Classes Program and Below Market Rate Program (BMR). HDF is a HUD-certified lender and Housing Counseling agency. The organization provides homebuyers with homebuyer finance, counseling, and assistance programs.

HDF offers low-interest, flexible financing to developers through its Multi-Family Lending Program. HDF also offers technical assistance to municipalities, and works with the private sector, other nonprofits, and government entities to facilitate the development of more affordable housing. Through its Advocacy Initiative, HDF convenes symposia for business leaders and community decisionmakers featuring national, regional, and local experts on important topics related to affordable housing and homeownership.

The organization manages public/private partnerships to lend funds for these affordable housing initiatives. It has the largest public/private pool of mortgage financing for affordable housing in Connecticut — both homeownership and multifamily development — $60 million.

The Housing Development Fund, Inc is headquartered at 100 Prospect Street, South Tower Plaza, Stamford and maintains an office at 8 West Street in Danbury.

For additional information call Tami Strauss at 203-969-1830, extension 19, or visit www.hdf-ct.org