The Puerto Rico Housing Finance Corporation was created in 1977 after the Government Development Bank launched an initiative to help stimulate the local housing sector. The Puerto Rico Housing Bank and Finance Agency was created in 1961 to provide financing to low-income families to become homeowners.
In 2001, the Commonwealth established as a priority the need to restructure all public agencies in charge of offering financing for housing. In addition, the Commonwealth prioritized the need to merge under a single operation the financing services for low-income housing. Effective February 8, 2002, the Housing Finance Corporation became the Housing Finance Authority (PRHFA) and the Housing Bank and Finance Agency was dissolved and its powers were transferred to the Housing Finance Authority.
The PRHFA, a GDB subsidiary, provides mortgage loans to public and private housing developers for the construction, improvement, operation and/or maintenance of rental and for-sale housing for low to moderate income families. Moreover, it offers mortgage loans to citizens of low and moderate income. It also administers the Mortgage Loan Insurance Program (Act No. 87). In addition, the Real Estate Division handles repossessed properties that are received either from defaulting loans granted by the PRHFA itself or through claims filed by other banking institutions with the Mortgage Loan Insurance Program (in which case, PRHFA has responded as insurer of said banking institution and paid the institution its claim for the property because a mortgage loan debtor has defaulted).
Furthermore, the PRHFA administers housing subsidy programs aimed at boosting home purchases, such as, the Economic Stimulus Program (by granting second mortgages to be used as down payment in the purchase of first and second homes) and My New Home (by providing down payment and closing cost assistance bonuses). As of October 2011, the PRHFA has also launched a loss mitigation program known as Protecting your Home intended to reduce the amount of home foreclosures among low and moderate income families with recent financial struggles (by providing a mortgage payment subsidy for up to 18 months).
The PRHFA is certified by the U.S. Department of Housing and Urban Development (HUD) to administer the U.S. Housing Act Section 8 voucher program in Puerto Rico and to act as an approved lender for both multi-family rental projects and single-family homes. Likewise, the PRHFA serves as Performance-Based Contract Administrator for HUD’s subsidy contracts for 160 Section 8 projects in Puerto Rico. In 2010, the PRHFA was designated to administer HUD’s HOME Investment Partnerships Program as well.
The PRHFA also issues bonds and notes, the proceeds of which are deposited in separate trusts and generally invested in federally insured mortgage loans on properties located in Puerto Rico and purchased by low and moderate-income families. In addition, it is an authorized issuer of the Government National Mortgage Association (GNMA) mortgage-backed securities. The PRHFA is also Puerto Rico's State Credit Agency for the Low-Income Housing Tax Credit program under Section 42 of the U.S. Internal Revenue Code (IRC), as amended. And it is the controlling entity of the Puerto Rico Community Development Fund, a Community Development Entity through which, in 2009, the PRHFA received $45 million as part of the New Markets Tax Credits Program under Section 45D of IRC that will foster the for-sale housing market in the island. In 2011, the PRHFA applied for a $125 million allocation under this program.
The merger of financial operations helped strengthen the entity, placing it in a better position to negotiate financial agreements with both the federal government and the private sector. At present, the PRHFA is a financial institution that abides by the Housing Department's public policy and an entity that designs financial structures for low-income housing projects. It is also a "One Stop Center" for housing developers and mortgage bankers.
PRHFA has streamlined and brought new efficiencies to the process of administering the development of housing at all levels. This GDB subsidiary's new organization and thrust has allowed it to effectively direct the housing programs championed by the government in recent years.
For more information on PRHFA as a tax-exempt securities issuer click HERE.
PO Box 71361
San Juan PR 00936-8461
Ave. Barbosa 606
Edif. Juan C. Cordero
Río Piedras PR 00919-0345
Tel (787) 765-7577
Fax (787) 620-3521
José A. Sierra-Morales
Tel. (787) 765-7577 x-4574
Fax (787) 620-3521
Assistant Executive Director for Legal Services,
Accounting and Compliance
Tel. (787) 765-7577 x-1300
Fax (787) 620-3564