Castle Rock Town Council voted to assign the Town’s 2008 private activity bond allocation to the Colorado Housing and Finance Authority (CHFA). CHFA will issue the nearly $1.74 million in bonds to finance new single-family mortgage loans for low and moderate income households within Castle Rock over the next two-years.

This is the third consecutive year that Castle Rock has transferred its private activity bond allocation to CHFA for the purposes of mortgage finance. Last year, the Town transferred nearly $1.57 million in bond authority to CHFA. CHFA leveraged the Town’s investment with its own resources to finance mortgages for 25 Castle Rock households totaling over $4.5 million. The average income of Castle Rock households served by CHFA in 2007 was $52,726.

Castle Rock’s partnership with CHFA helps the Town meet several of its 2020 Comprehensive Master Plan objectives including: providing a balance between jobs and housing; providing a broad range of housing choices suitable for different ages and incomes; and providing affordable and attainable housing that allows locally employed individuals and families to reside in Castle Rock.

“Our vision is for Castle Rock to be a world-class community with small-town character,” said Castle Rock Mayor Randy Reed. “Providing a diversity of housing is important to supporting that vision. We want everyone who works in Castle Rock to have the opportunity to live in this great Town as well.”

Private activity bonds (PAB) are tax-exempt bonds that can be issued for specific purposes including: affordable housing, small business finance, manufacturing, higher education, and environmental projects. Castle Rock’s 2008 private activity bond allocation was nearly $1.74 million. Municipalities must issue or transfer authority for issuing the bonds by Sept. 15, 2008, or the allocation is automatically recaptured by the state and distributed to other entities.

CHFA estimates that Castle Rock’s 2008 bond transfer to CHFA will generate $3.4 million in economic activity and create 23 new jobs in the Town and throughout the state.

CHFA Executive Director and CEO, Milroy A. Alexander said “Although this year has been difficult for many bond issuers, CHFA has been fortunate in that our ability to sell bonds in the market has not been impacted.” Alexander continued, “We are pleased that CHFA’s strength and stability will help Castle Rock continue to make progress in meeting their community’s diverse housing needs.”

Statewide, CHFA closed $651 million in loans in 2007. This figure includes $484 million in single-family loans to 3,314 households. CHFA home mortgage products are all 30- or 40-year fixed interest rate loans. CHFA does not offer sub-prime or adjustable rate mortgages. CHFA requires and pays for its home finance customers to complete an in-person or online homebuyer’s education course as a condition of loan approval, which CHFA believes, along with its in-state loan servicing program, has contributed to its relatively low 4.77 percent home mortgage default rate and 1.1 percent home mortgage foreclosure rate.