2012 PHFA Annual Report - Pennsylvania Housing Finance Agency

looking back,
moving forward
A message from the executive director
The year 2012 marks our 40th year of service to Pennsylvanians,
With an initial staff of eight, from its early office at 3211 North Front
providing an opportune time to reflect on our origin and our ongoing
Street in Harrisburg, PHFA was charged with ensuring that affordable
mission. Many state residents don’t know the story about how PHFA
housing options would be available to the state’s residents, filling a void
came to be. But knowing how the agency was created really is vital to
not being fully addressed by the marketplace.
understanding the programs we lead and the way we work.
There was no model elsewhere for how this work was to be done. So
An historical timeline covering the first four decades of PHFA’s
the staff learned by doing. In some instances, HFAs in other states
existence winds through the pages of this annual report, touching on
tried new approaches, and we learned from their accomplishments. In
key agency milestones. I’d like to share more with you about PHFA’s
other cases, PHFA initiated novel programs, gaining experience from its
formative years.
successes and from projects that fell short.
Top: Former PHFA Executive Director Karl Smith in the early
1990s at a construction site for an agency-funded apartment
building. Bottom: Groundbreaking in 2003 for PHFA’s current
Harrisburg office. Shown in the middle are former PHFA
Executive Director William Bostic (left) and current Executive
Director Brian Hudson.
Back in the early 1970s, various pioneering states had begun to
experiment with the creation of housing finance agencies, or HFAs
as they came to be known. These were to be a special sort of public
service organization, established using public tax dollars but then
expected to fund themselves by drawing on their operational fees and,
most importantly, on their market investments through their offering of
mortgage-backed securities and other financial instruments.
A mission defined by
the state legislature
In 1972, a forward-looking Pennsylvania legislature passed a law to
create an HFA in our state — the Pennsylvania Housing Finance Agency.
The General Assembly provided PHFA with start-up capital. But from
then on, it would be expected to pay its own way.
PHFA would not be a traditional state agency funded annually
with state tax dollars. But it wouldn’t fully be a private sector
company either, since it was established with public funding,
led by a board of state-appointed directors, and charged with a
public service mission. This hybrid state agency is described in
its bylaws as “a body corporate and politic constituting a public
corporation and government instrumentality of the Commonwealth
of Pennsylvania.”
Exploring ways to expand
affordable housing options
So the agency grew. First, it focused on the funding of apartment
buildings that would offer rents to people with low and moderate
incomes, seniors, and people with disabilities. Later, it launched into
the provision of affordable mortgages for people who were ready for
the responsibilities of homeownership.
Foreclosure prevention, too, became part of the agency’s mission
with the start, in the 1980s, of the Homeowners’ Emergency Mortgage
Assistance Program (HEMAP) that grew to become a national model
due to its success. Still later, the agency added the enhancement of nocost
counseling to educate people interested in buying their first home.
Fourteen years into its existence, the young agency faced an
extremely difficult financial market. Its ability to sustain itself was
in jeopardy. The legislature stepped up at that time with a loan of
$61 million to help PHFA through those challenging years. That loan
was later repaid — with $1 million in interest.
Since that time, the agency has been able to survive and thrive on its
own investments, and through partnerships with other state agencies
on financing for special housing programs. It has continued to evolve
to meet the needs of a changing housing environment and dynamic
financial markets.
Understanding the vision that led to our creation helps us stay true to
our mission. That’s why, in this 40th anniversary year, we pause to look
back at how we started and where we’ve been. But our main focus,
as always, remains toward the future — moving forward — so that we
can continue to meet the challenge we were given four decades ago:
To expand affordable housing options for Pennsylvanians. It’s that task
that motivates us in our ongoing service to the state’s residents.
We’re PHFA. Welcome home!
Brian A. Hudson Sr.
Executive Director and CEO
ExECutive DIRECTor’s message
annual report 2012
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