Housing Finance Agency

The New York State Housing Finance Agency (HFA) was created by the State Legislature in 1960 (Chapter 671; Article III of the Private Housing Finance Law) as a public benefit corporation charged with "providing of safe and sanitary dwelling accommodations at rental rates which families and persons of low income can afford, and which the ordinary operations of private enterprise can not provide." The agency was to issue bonds and notes to encourage investment in projects that would achieve this goal. The original financing mechanism was the "moral obligation bond." Since its inception, the Housing Finance Agency's role has expanded to include financing facilities for education, health, and community projects.

When the State University Construction Fund was created in 1962 (Chapter 251), the HFA was empowered to raise funds for the construction of new facilities within the State University of New York system. In 1963 (Chapter 932), the HFA was authorized to finance state-operated projects for psychiatric centers, medical and surgical centers, and schools for the developmentally disabled. In 1968 (Chapter 359), the agency was additionally empowered to finance health facilities in social service districts.

New corporations have been created that share a chairperson, executive director, and staff with the HFA, but have different corporate powers and bond authorization. In 1972 (chapter 901), the Municipal Bond Bank Agency (MBBA) was created. The MBBA uses the HFA's financing capabilities to allow the state's municipalities to borrow at lower rates than they normally could (for this purpose a municipality includes district corporations such as school and sewer districts). The MBBA began to share staff with the HFA in 1983. In 1973 (chapter 392), the Medical Care Facilities Finance Agency (MCFFA) was created. On September 1, 1995, pursuant to the Health Care Financing Consolidation Act, the MCFFA was merged with the Dormitory Authority of the State of New York and was no longer staffed by the HFA.

In 1975 (chapter 7), the Project Finance Agency (PFA) was created. The PFA came about as part of the "Build-Out and Bond-Out" master plan to deal with the state and New York City fiscal crises of 1975, set off by the Urban Development Corporation (UDC) defaulting on payments. The PFA issued bonds to help pay off UDC projects that were indebted. In 1985 the Affordable Housing Corporation was created by the Legislature and was staffed by the HFA. The HFA also provided funding for other programs run by other state agencies. Specifically, it raised funds for the Community Mental Health Services and Mental Retardation Services Program (Article 75 of the Mental Hygiene Law); the Youth Facilities (day care) Program (Title 5-A, Article 6 of the Social Services Law); and the Community Senior Citizens Services Program (Article VII-A of the Private Housing Finance Law).

The Community Development Corporations Act (Article VI-A of the Private Housing Finance Law) empowered the Agency to grant mortgage loans to local, non-profit community development corporations for projects that are "in furtherance of an urban renewal plan" and included "civic, cultural, and recreational structures and facilities and other capital development projects." Since 1976 the HFA has had to submit a plan to the Public Authorities Control Board before incurring any indebtedness (Laws of 1976, chapters 38 and 39). In 1979 (chapter 715) the HFA was empowered to make federally aided mortgage loans to any firm, company, partnership, or corporation. Prior to that act, the HFA could only make loans to companies founded under Article II of the Public Housing Finance Law.

When the HFA was created, its membership consisted of the commissioner of Housing and Community Renewal, who served as chairman and chief executive officer, the director of the budget, the commissioner of Taxation and Finance, and two members appointed by the governor. Since 1969 (chapter 528), membership has consisted of the commissioner of the Division of Housing and Community Renewal, the commissioner of Taxation and Finance, the director of the budget, and four additional members appointed by the governor. The chairman of the HFA, selected from among the members by the governor, serves in this capacity for the duration of his membership. Until 1993, the HFA appointed an executive director to manage the daily operations of the agency. From that time forward, it has appointed a president who serves as chief executive officer for both the Housing Finance Agency and the State of New York Mortgage Agency. The HFA also staffs and acts as the administrative arm of the New York State Affordable Housing Corporation, the New York State Project Finance Agency, and the State of New York Municipal Bond Bank Agency.