1. New York State Housing Finance Agency
Multifamily Volume Cap (“MVP”) Preservation Facility
September 27, 2016
Marian Zucker
President
Finance & Development

2. New York State’s Volume Cap Constraints
New York State receives approximately $1.97 billion of volume cap per year
Demand typically exceeds supply
HFA and SONYMA’s combined volume cap needs ranges from $1.3 billion to $1.5 billion, representing 65%-76% of the State’s total cap

3. HERA Amendment to the IRC
Internal Revenue Code, Section 146 (i) (6): Allows repayments of loans financed by housing bonds to be recycled into new loans additional volume cap.
As long as:
Refunding bonds are issued within 4 years of the original bonds
New loan is made within 6 months of the prior loan’s repayment
Refunding bonds are TEFRA’d prior to issuance for 2x par
The last maturity date of the refunding bonds ≤ 34 years
Impact: Allowed the Agency to recycle Volume Cap

4. Initial Recycling Process
Unpredictable prepayments and project/bond issue Timeline Uncertainty +
Nowhere to hold prepayments
(despite HERA’s 6 month allowance)
Cost associated with keeping bonds outstanding until prepayments could be used =
Cumbersome & Expensive to Recycle

5. “Necessity is the Mother of Innovation” – How the Facility Helped Solved the Dilemma
Prepayments can stay in facility for up to 6 months
Prepayments available to refund into a project within one day’s notice
The Facility is fully cash collateralized by the project payment – the Agency only owes interest on outstanding amounts

6. $ $ $ $ $$ $$ $$ $$ $$ Process Overview MVP Construction HFA
Credit Enhancement
HFA
Redeem “A”’s Bonds
Draw on Credit Enhancement
Project A Bondholders $$
Bonds $$
Bond Proceeds
Project B Bondholders $$
Refunding Facility $$
Loan partially funding Project B $$
Draw on Facility
Project A Prepays
Project B
MVP
Project A
June 16, 2016
Prepayment
Prepayment
*Preliminary; subject to change in price and availability; when, as, and if issued

7. Activity Under the Recycling Facility
Since 2011, NYSHFA has issued over $1 billion* in recycled bonds to fund its multifamily pipeline
Approximately $165 million* was recycled using the Facility
In 2016, MVP was used to issue approximately 45% of the Agency’s total recycling bonds
*Includes projects expected to close through September 30, 2016

8. Basic Features Facility Structure
Executed as private placement with Citibank
$300 million drawdown facility
Structured with a stated term of 36 months
Repayment held for a six month term maximum
Interest reserve account for additional protection to facility provider
Benefits
Capture and recycle tax exempt bond authority more efficiently
Avoid logistical challenges : Aligning repaying project with new bond issue
Provide more predictability of our recycling resources
Accept project prepayments at any time
Capture recycling bonding authority until a new project is ready to be funded