ࡱ> MOL} bjbj55 8.__|IIIII]]]8<]rBBBBBBBB\DFBI444BII,B4vIIB4Bn>-Alq~n]? BBB0rB9?GG@-AGI-A,nBBFrB4444G :  TESTIMONY TO THE senate commerce COMMITTEE PRESENTED BY kdfa & khrc PRESIDENT STEPHEN r. WEATHERFORD REGARDING sENATE BILL NO. 488 february 13, 2008 KANSAS STATEWIDE HOMEOWNERSHIP PROGRAM Chairpersons Brownlee & Jordan and Honorable Members of the Committee, thank you for the opportunity to present testimony concerning Senate Bill No 488: Last years tornados and floods elevated Kansas existing housing problems into a crisis, revealing a desperate statewide need for affordable and decent housing. As President of Kansas Development Finance Authority (KDFA) and Kansas Housing Resources Corporation (KHRC), I appreciate this opportunity to discuss Senate Bill No. 488 (Bill), which provides a sorely needed tool to address some of these needs. As you know, several legislative measures are currently under consideration at this time. A good deal of debate over those measures has been related to the availability of continued General Fund appropriations and the impact of those expenditures upon other State programs and services. Senate Bill No 488 creates a means for financing of statewide housing initiatives without a commitment of taxpayer funds. A state sponsored mortgage revenue bond program similar to that offered by Sedgwick and Shawnee Counties will provide sorely needed resources for statewide housing programs as offered in other states. Kansas remains the only state in the nation without a true statewide homeownership program. Although we may not agree on every aspect of the Sedgwick and Shawnee County program operations, we do generally support the program goals and its continued success. Our primary concerns with the County program are first; the geographic clustering of their loans and second; the manner in which earnings of the program are utilized. As you can see from the provided charts and graphs, utilization of the program is clustered primarily around Sedgwick and Shawnee counties. While Sedgwick and Shawnee counties together enjoy 23.2% of the states population, 61% of all loans are from those two counties. In comparison, Johnson and Wyandotte counties with a nearly identical population (22.7%) have received less than 5% of the loans. Our second concern is how the earnings generated by the program are utilitized. When the Federal Government created the Mortgage Revenue Bond (MRB) program, it was with the intention that States use the program to earn profits to be used to support other statewide housing initiatives. While neither the State nor the Legislature has been provided with earnings information from the County program, other states generate substantial earnings from operation of their MRB programs. Earnings in the County program remain under the control of the county commissioners. This Bill would give KDFA the authority to issue MRBs creating a Statewide Homeownership Program (Program) that would be administered by KHRC. An MRB program generates funds from private sector bond investments. The funds are then used to purchase loans made by hometown banks and mortgage companies. Utilization of this process provides first time homebuyers with access to lower mortgage rates and down payment assistance while generating earnings to support statewide affordable housing programs. Implementation of this Program need not disrupt Sedgwick and Shawnee Counties authority to issue their own MRBs through the Local Residential Housing Act. Instead, KHRC would complement the county program to ensure a true statewide focus. No longer would two counties with 25% of the States population enjoy over 60% of the MRB loan activity, as well as the majority of the fees generated from that activity. Indeed, while the State has earned some issuance fees under the county MRB programs, SB No. 488 represents a real opportunity for the State to generate revenues to address both disasters and the widespread and ongoing housing problem while reducing costs to the State general fund. This Bill represents a win for homebuyers and a win for taxpayers. A final key point is that the Program would in no way compete with private lenders. The Bill prohibits KDFA and KHRC from directly originating mortgage loans. Instead, KHRC will utilize and expand its established network of hometown lenders across Kansas to initiate a truly statewide MRB program. Hometown lenders will benefit not only on earnings from originating the loans, but also from an expanded base of homeowners in their communities. Again, thank you for this opportunity to address this Bill. I respectfully urge you to support a true statewide MRB program, which is a win for homebuyers, taxpayers, hometown lenders, and all Kansas communities. I welcome any questions you may have.     KDFA/KHRC Testimony to Senate Commerce Committee v3 February 13, 2008  !>Ed  X [ { 9 i ɸttttct!hPnh#G5;OJQJ]^J!hPnh5;OJQJ]^J!hPnh;Ro5;OJQJ]^J!hPnhIf5;OJQJ]^J!hPnh75;OJQJ]^J!hPnh435;OJQJ]^JhPnh6OJQJ]^JhPnhOJQJ^JhPnh43OJQJ^Jh43hOJQJ^J!,Z [ pq $dha$gdPn $dha$gdPn$a$   ! 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