Housing Development Fund Receives $500,000 in Conn. Housing Finance Tax Credits from CL&P For Second Year

STAMFORD, Conn., January 29, 2008- The Housing Development Fund, Inc. (HDF), a nonprofit bank providing funding for affordable housing and an array of homebuyer assistance programs, today announced that it has received a second $500,000 grant from The Connecticut Light & Power Company (CL&P) under the Connecticut Housing Finance Authority (CHFA) Housing Tax Credit Contribution Program. The program allows businesses to contribute state tax dollars directly to approved affordable housing initiatives. The funding will continue to support HDF’s Workforce Housing Downpayment Fund, a program that helps first time homebuyers to purchase houses in the communities where they work.

Of the 49 homebuyers assisted to date by the Workforce Housing Development Fund, seven purchased in and moved to the towns where they work. Forty-two were already renting in the towns where they worked but were able to purchase homes there. The towns that benefited from the additional homeownership and local workforce included Stamford, Danbury, Norwalk, Bridgeport, Fairfield, New Milford, West Haven, New Haven and Sharon.

Initially HDF expected that the original $500,000 grant would enable it to assist between 30 and 60 income-eligible homebuyers in southwestern Connecticut over a 36-month period. Instead, from the time the grant was received in October 1, 2006, through November 30, 2007, HDF deployed $419,000 or 84 percent of the grant, assisting 49 households. These households received zero-interest loans for downpayment and closing costs averaging $8,600. HDF expects to assist an additional ten households in the next 2 months, using the remaining funds in the first round and putting full deployment way ahead of schedule -- 14 months instead of 36.

The Workforce Housing Downpayment Program closes the affordability gap between first mortgage funding and the price of the property. In the first year, the Fund paid for downpayment and closing cost assistance of up to $15,000 per household. With the new $500,000 grant, HDF will be able to increase the maximum assistance to $20,000 and help another 25-45 households to homeownership.

“The need and the demand for HDF’s Workforce Housing Downpayment Fund are undeniable and growing,” said HDF President and CEO Joan Carty. “CL&P represents the best kind of partner in developing and funding this type of program. They understand not only the need to create affordability, but also the benefits to communities when teachers, police, firefighters, and other key workers live where they work. We are grateful for their ongoing commitment.”

The CHFA tax credit funds are also leveraged by HDF’s SmartMove second mortgage fund, which can provide an additional amount up to 20 percent of the purchase price toward bridging the affordability gap. Savings in personal transportation costs due to reduced commuting can also contribute to the homebuyers’ ability to pay for housing and other monthly expenses.

“Affordable housing and transportation are both critical issues in southwestern Connecticut,” said Ray Necci, president of The Connecticut Light & Power Company, a subsidiary of Northeast Utilities. “Thanks to the CHFA Housing Tax Credit Contribution Program we can put our tax dollars directly to use helping an organization like HDF come up with practical and innovative solutions to these challenges. We’re gratified that the program has been so successful.”

Among the homebuyers assisted by the Workforce Housing Development Fund to date are a firefighter in Stamford, a police officer in Bridgeport, a custodian for the Redding Board of Education, an assistant branch manager for First County Bank, an inspector for the City of Norwalk, a respiratory therapist at St. Vincent’s Medical Center, and a pharmacy technician for Costco.

“These individuals and their families contribute their time, energy, talent and in some cases risk their lives for their communities,” said Joan Carty. “They more than deserve to have an ownership stake and we’re thrilled to be able to help them reach that objective.”

As part of administering the Workforce Housing Downpayment Fund, HDF evaluates potential homebuyers for income and other eligibility requirements of the program. The average household income of the first 49 households was 69 percent of the Area Median Income for the area in which they purchased. HDF also provides both pre- and post-purchase counseling to help assure successful homeownership. The downpayment and closing cost assistance provided by the Fund is layered with other available financing tools on a case by case basis.

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 decision makers 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 multi-family development- $60 million.

The Housing Development Fund, Inc. is headquartered at 100 Prospect Street, South Tower Plaza, Stamford, Connecticut, and maintains an office at 8 West Street, in Danbury. For additional information call Tami Strauss at 203-969-1830 x19 or visit www.hdf-ct.org