Treasury Department Announces NIBP 2012 Extension to Handle Various IssuesApril 3, 2012 — 1,166 views
The U.S. Department of the Treasury extended the New Issue Bond Program (NIBP) until December 31, 2012, and this change could impact home finance agencies (HFAs) nationwide.
The NIBP was created to establish new home buying opportunities for Americans by offering additional financing options. The Treasury Department purchased $15.3 billion in tax-exempt housing bonds from HFAs to assist people looking to purchase foreclosed homes. This strategy was designed not only to help consumers, but also to stimulate the U.S. real estate market.
Homeowners have benefited substantially from the program since its creation in 2009. The Treasury Department reports HFAs have helped finance more than 100,000 single-family homes and over 24,000 rental homes as of September 30, 2011. The 2012 extension allows people to continue pursuing affordable housing options as the real estate market begins to recover.
The Treasury Department announced the extension on November 23, 2011, and the change gives buyers more time to pursue single-family or multi-family properties. The government made several changes with the extension, including imposing a 30 basis points-per-year redemption fee on NIBP funds claimed after April 1, 2012, and creating a rate-setting system for these bonds based on their weighted average life upon issuance. These changes allow the department to manage the legal, operational and policy challenges the program presents while allowing home buyers to maximize their investment.