Fall is typically when I have the pleasure of sharing with you a few of VHDA’s significant accomplishments over the past fiscal year. As you know, FY09 was a tough environment for issuing bonds, due to market instability caused by the housing downturn. However, during the most difficult market climate in 50 years, VHDA was able to shift quickly to a GNMA loan program and managed to close 4,300 single family loans and fund 3,577 multifamily units.
We expect net revenues to be approximately $81 million for the year. This amount is significantly less than FY08 and reflects the extremely difficult market conditions in which we currently operate; however, it is nonetheless a healthy bottom line.
In December, Moody’s rated VHDA as one of three state Housing Finance Agencies (HFAs) best positioned to weather the current housing crisis. In May, a special S&P report on state Housing Finance Agencies HFAs also recognized VHDA as one of the strongest HFAs and expressed confidence in our financial and lending practices. VHDA's record of strong financial performance places us first among our AA+ rated peers, and therefore better positioned to weather financial challenges.
VHDA continued to provide substantial support to the Virginia Foreclosure Prevention Task Force. This included training more than 300 certified foreclosure prevention counselors, and distributing nearly $500,000 in VHDA grant assistance to support counseling agencies. We also continue to maintain the Task Force website and provide analytic support to the Task Force, and the administration, in understanding the nature and scope of Virginia’s foreclosure problem.
Regardless of the best efforts of all involved, not everyone may be assisted to stay in their home by modifying the terms of their loan. The first wave of foreclosures was primarily due to high cost, subprime mortgages. However, over the past year, the home price declines triggered by subprime foreclosures have put increasing numbers of Virginians “under water” with few financial options in the event of unemployment or other life circumstances beyond their control. Consequently, the number of traditional prime, fixed-rate mortgages going into foreclosure has more than doubled since this time last year. In many instances, continued homeownership may not be possible or in the best interest of the individual or family. This will present other housing challenges.
Although the market outlook surrounding all HFAs remains challenging, VHDA demonstrated in FY09 that we can achieve exceptional results in the face of adverse conditions. But we couldn’t do it without the help of our strong partners—thank you for your help. We are optimistic about meeting whatever challenges the year ahead may bring. As always, it is the continued strength of our partnerships with you that will allow us to successfully meet future challenges.
- Susan Dewey